Marine Insurance in Indo-Portuguese Trade

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Juiy-September 1977

Vo!. XIV No 3

The Indian

Economicand

SocialHistoryReview


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The Indian Economic and

Social History Review, V ol.XIV,No. 3

Marine Insurance and Indo-Portuguese Trade History:An Aid to Maritime Historiography*

T.R. DESOUZA -ICHR Research Fellow, University of Poona, Poona

Maritime history is just a recent, but much-awaited and welcome arrival inthe arena of Indian historiography. Since this new branch is still in its infantstage and there is still discussion going on regarding its sources and metho-dology,' the present paper seeks to suggest utilization of marine insurancerecords for more fruitful research in the field. The history of marine insurancein India is a subject yet to be tackled by Indian historians.

Chiefly the texts oftwo Portuguese documents which are largely self-explaining, are presented in this paper and a sketchy history of marine

insurance in Portugal placed before them by way of an introduction.. *

The Portuguese claim to be the earliest modern nation to have had an orga-nized marine insurance is still to be challenged.' The earliest record of marineinsurance in Europe is a royal decree of King Deus of

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Portugal (1279-1325),dated May 10, 1293, establishing a Society of Portuguese Merchants (Sock-

wish to express my gratitude to the authorities of the two archives of Lisbon fromwhere / have drawn the documents presented in this article. I wish to acknowledge also thekindness shown to me by Miss Otilia Gnimaraes da Silva, who provided me with readingand photocopying facilities al the Documentation Centre of the National Institute of Insu-rance. Lisbon.

1-The recent studies of Susi! Chauduri (Trade and Commercial Organization in Bengal,1650-1720, Calcutta. 1975) and Surendra Gopal ( Commerce and Crafts in Gujarat, 16th and17th Centuries: A Study in the Impact of European Expansion on Pre-Capitalist Economy, NewDelhi, I975) have provided a :r.00dstart with their "structural' and "non-Eurccentric.'approach. Cf. Indieo (Journal of the lieras Institute, Bombay). Vol. XIV, No.1, p. 66, where-in it presents only a brief review of titr proceedings of the sym posium promoted by the Ins-

titute in October 1976. Professor Asbirt. Das Gupta had some valuable insights to impartregarding maritime history in his paper entitled "The Future of Historical Research in India:The International Context."

2Jose da PierdatieJr.and Narciso Arie, "A Contribuicao ponuguesa no campo dosseguros,"ICongress," Nati...," mai de ,Sspdsos, Lisboa, 1971, pp. 14S-57, tracethe evolution ofinsurance in Europe. The earliest contract of marine insurance outside Portugal is tracedback to fourteenth century Florence.


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dade de Mereadores Portuguese?) with statutes to safeguard their externaltrade against all vicissitudes,3Thereafter, King Ferdinand (1345-83) set upa Shipping Company (Companhia de Naus) having an Insurance Fund (Bolsa

de Seguros) towards which the member-merchants had to contribute 2 percent of their freight revenue by way of a fixed premiuin.4

It was during the reign of King Emmanuel I (1495-1521) that Portugalentered the phase of its greatest maritime adventure and economic prospe-rity with the discovery of the Cape route to India. As could In expected, this

period saw the appearance of an outstanding Portuguese juridical brain inthe person of Pedro de Santarem, who was a Portuguese agent in Florence,Pisa and Leorne. His Tractatus de Asset-oration-thus et Sponsionibus Mercato-rum, which was first presented to the public in 1553, is regarded as the earliest

systematic treatise on marine insurance in existenceDuring the reign of Cardinal Henry (1578-80) a tribunal, known as

Consulado, was instituted for decidin gcases related to marine insurance. Thisinstitution was apparently suppressed in 1580, following the annexation ofPortugal to Spain, but it was revived in 1593 along the lines of its counter-parts in Burgos and Sevilha. It may be noted that the Statutes of Philip II(1570) had formalized government control over insurance business by appoin-ting an official (com issario de segu ros) , whose signature was indispensable for

the validity of any insurance contract in the courts of law.The later developments until the end of the eighteenth century were res-tricted to minor changes in the organization: In 1668 King Pedro (1667-1706)established an Insurance House (Casa de Seguros) as an organ of the Board of

General Trade (Junta do Comereio Gera!), which after 1720 came to be repla-ced by a Board of Common Trade Welfare (Mesa do Bern Comum do Comer-

eta). The reforming zeal of the great Marquis of Pombal created a new Royal

Board of Trade (Real Junta do Comereio) in 1750 incorporating the older

Insurance House.'

3Jornal de Seguros, No. 274 (Lisboa: 30 Junho 1917): Text of the royal order found byProfessor Bensabat Amzalak in the National Archives of Lisbon.

1Companhia de &gurus BONANCA: Cento e einquenta anos de historla, Lisboa, 1958,pp. 30-31 (Text of the order of King Ferdinand).

6

Amzalair Os Seguros s

egundoPedro de Santarem, Santerna, Juriconsuito Port ugues, ,

M. B.,

do seetdoXVI. Lisboa, 1917. The Portuguese Association of Insurers published the originaitext in Latin along with translations in Portuguztse.. English and French in 1961. Wide

demand caused it to be reprinted in 1971.6

1have depended for this sketch of historical development on Alberto Sento, EPOlUe170

historicado Seguro. Coimbra, 1919.


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M arine Insurance and M do-Portugu ese T rade H is tory 379

DOCUMENT I

ROYAL LIBRARY OFAJLIDA, MS 51-VI-21, FLS, 147v-149v

(R epor t o f an inquiry ordered by the Princess in to the insurance sought by som eb u s i n e s s m en ex p ec t in g t h e i r g o o d s t o arri v e i n th e s h i p s o f t h e Carreira daIndia .' and in to the ne w s they had rece ive df rom India in an ext raordinary m ail .)

On the 9th of this month Princess Margaret issued an order addressed to thisCouncil informing the Councillors that some extraordinary mail had 'arrivedfrom India, following which some businessmen from Madrid, awaiting goodsfrom India, had ordered these goods to be insured. The decree ordered thesaid Council to conduct a secret inquiry into the matter: to find out the

nature and conditions of the insurance as well as the parties involved; to esta-blish if the news was more recent than and different from the letter of theViceroy of India dated November 8th; and to report back to the Princess thefindings of the inquiry. This was to be regarded as urgent matter.

In obedience to the above decree the mission of the Crown was entrustedto Rodrigo Botelho de Moraes, a Judge of the High Court, who reported backto this Council that in execution of the said decree, he had conducted the in-

quiry with utmost secrecy to determine what insurances were recorded in theInsurance Register belonging to the ships that came from India, the clauses

and conditions, and the persons involved. He had also tried to verify withpossible certainty what news had arrived from India, who the businessmenwere, who got it (in the mail of 5th) with instructions to secure insurance,whether this news was more recent than that of the letter sent by the Viceroyof India on November 8th and whether it differed from that in the letter.

As regards the risks insured, Rodrigo Botelho de Moraes has found outthat on July 12th of this year Manuel Dias da Sylva, a businessman, residingin this city, insured goods for 1030 c ru z ad o s

8in the flagship Our Lady ofOliveira with another businessman Nicola Velozo for 18 per cent premium.Diogo Duarte de Souza, also a resident in this city, sought insurance onAugust 17th for goods worth 15000 cruzados in the two ships awaited fromIndia. The contract was initiated in the Register, hut it was not pursued as18 per cent was for him too high a premiumrate. Antonio Ribeiro deCarvalho insured for himself, his household and for his brother-in-law andcousin Francisco Tinoco (who lived at the court of Madrid), 7000 cruzadosequally distributed in the two ships, namely S . Jo a o d e De u s and N os sa S en-k ora de O liveira, on the 5th of the month on the day the news was received),

and he did so for a premium of 18 per cent. The businessmen who reside in

'Round voyage between Lisbon and boa.sPortuguese gold currency equivalent to about 4 shillings (English) in the seventeenth

century in the eighteenth century it was equated to about half a crown.


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merchants ofDiv with the Civil and ('riminal tilagistrate of the region, JozeAgostinho da Silva e Menezes, against the fort-captain Caeiano de Souza

Pereira.)

In the monsoon of 1792 a vessel belonging to Calanjy Taley was shipwrecked,while on its way back from Mossambique. The businessmen who had under-written the risk came to an agreement with the parties that had suffered loss.A compensation of 93 per cent was settled upon, but this news reached theears of the Governor, who forbade the payment and ordered that the book ofthe Captain or the banianes containing the registration of the insurance obli-gations and of the insurance-brokers be shown to him. The Governor triedto verify also whether all the obligations were registered or not, and comman-

ded each one to produce his premium receipts. He then forced out from thechief businessmen their trade secrets. After a year had elapsed, the Governorcollected 4 per cent from the .underwriters who had their obligations recorded

in the said register, and 25 per cent from those who had not. He did notexempt them from paying the full agreed 93 per cent compensation, which hecollected in full and retained its half before passing on the rest to the partiesconcerned. He thus pocketed nearly 8000xerafins.'To add insult to injury,he imprisoned Darsy Madougy, the chief businessman and underwriter ofrisks. The victim died of hanging for refusing to yield to the pressures.

Chotorbozo Curgyiagajivan das MulgyTarachande Sauchande Ana n-dagy GivaneRupachancle VadaSamoey Casidas represented by NattuSamogyTrachande Deuchande--Calachande and EmechandeVanarnalyGovordaneMotichande PremogyFatuchande Muichande represented byhis brother BovinidasBovinidas GettaVirgy SantidasGovordane Vana-garvPatambor Deuchandc Cangy CarvaDarsy MadougyDamodarVirgyRanchor GettaHirgy DaugyCarva CaneadasRauchande Porso-torn oLaca much andeTricarric SacalehandeNatta CalattavPitanaborCala ngy 1-lo do u ,gy M a ngalVaj a G iva ne Pi ta m b or VelgyAdecarane

Giuthande represented by Cangy Govongyiivandas SamochandePitainborPorsotornoRupachande Premogy--Gopalgy .ArySaca.chande Varianialy-Sancor PitamborNadramo Bovanidas.

The documents presented above are not marine insurance records properly socalled, but they suggest the possibility of tracing such records in the State andprivate collections and of turning them to good account for reconstructing

"Silver currency of Goa. For its equivalence in terms of its buying capacity during theseventeenth century, see my article in The Indian Economic and Social ifistory Review, Vol,Xli, No. 4, pp. 433-42.


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Marine Insurance and Indo-Portuguese Trade History 383

economic history, and for our purpose, maritime history. The names of theGujarati merchants in Document 2 could lead to the identification of someof their families and to their surviving family papers. Incidentally, similar

records for the seventeenth and eighteenth centuries Goa-based Indo-Portu-guese trade are likely to be found among the survivin gpapers or the MhamaiKamat family of Panaji (Goa). This was the leading business house control-ling the lion's share of Goa-based Indo , Portuguese trade until it went bank-rupt at the close of the ei ghteenth century owing to internal family feuds-

It is apropos to mention two studies based on insurance contract-deedsfrom the French coastal towns and from Barcelona (Spain) that were presen-ted on the occasion oftheIV International Colloquium on Maritime History(Paris, 20-23 May 1959) by M.L.A. Boitea.ux and E.G. Raventos respectively.Both these studies can serve as good models along which research of this sortcould begin in this country as well."'

It is obvious in a general way that a thorough-going study of documenta-tion relating to marine insurance can lead us to more knowledge about thedirection and volume of seaborne trade, trade organization, and perhaps,even about incidents of natural hazards, piracy, and forms of contraband.More particularly, if the records are insurance contract-deeds of the type uti-lized in the two studies quoted above, the researcher is likely to find in them

abundant information regarding:(i) Type, name, and tonnage of the vessels(ii) Nationality of the vessel-owner or the captain

(iii) Ports of origin and destination(iv) Names of the insured and insuring parties(v) Quantity, value and nature of goods(vi) Premium paid for a particular route and durin ga particular season(vii) Compensation paid in case of an accident or damage

(viii) Some curious details about such accidents, and several other minutiae

which historians know too well to appreciate.To conclude, we have two general conclusions, which the two document-

texts lead to: Firstly, the business network of Lisbon in 1638 suggests that theLuso-Dutch conflict even at its high pitch was not a bar to traders of bothnations continuing their trade connections. 15 Secondly, there is apparently a

'Overseas Historical Archives (Lisbon): India,Maco 1,Doe. 46 (3 March 1170),Mato15, Doc. 38(28 March 1786). Cf. F.N. Xavier,Additainento no Co-4ga d o s U s o s e C o s tu m e s .Nova Goa. 1861, p. 21, n. 5.

1 .4. 1 .es Sources de r1-11510ireMaritime en Europe, du Mayen Age au %V ille Siecle (Pro-ceedings of IV International Colloquium on Maritime History of Europe), SEVPEN, Paris,

1962. pp. 447iT., 210ff.15This conclusion is corroborated by W. Foster, T h e E nglish Factories in India, 1642-4g,

Oxford, 1913, p. 22; and A VSeMOS do Conselho do Fazeada VI, II. 11v-112 (in the HistoricalArchives of Goa).


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difference in the insurance systems at work in Lisbon and Div. While the for-mer suggests a degree of specialization with individuals underwriting therisks, the latter presents a more rudimentary picture wherein insurance is

based on mutual trust among the merchants themselves, insuring and gettinginsured each other's goods in accordance with the principle of division andmultiplication of risks.le

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Moreiand, W.H., From Akbarto Aurangzeb, New Delhi, 1972, p. 158. He writes: -It ispossible that the business of marine insurance was specialized, but I have found no definiteinformation on this subject. The practice of insurance was quite common, and we read ofwar risks being dealt in, and also of an 'overdue market', but the names and positions of theinsurers are not stated, and it is perhaps more probable that the risks were underwritten byordinary merchants." We find that Moreland was near the truth.

Documents

Marine Insurance in Indo-Portuguese Trade