Incorporating a Guild or Corporation in Ancient India - Sandeep Balakrishna

Features and Functions of Corporations in Ancient India

NEXT, WE CAN EXAMINE just the barest contours of the main features and functions of guilds and corporations in ancient India.

• Guilds and corporations could own land and property in the corporate’s name.

• They could formulate rules and regulations and draw up charters like memorandum and articles of association in modern parlance. Any member who violated it invited penal action.

• Corporate representatives transacted business with the court of law where they commanded respect.

• The office named Kārya-cintaka resembled today’s board of directors. It consisted of people who were, above all, “pure and virtuous” over and beyond their professional qualifications and competence. The Yajnavalkya Samhita has a beautiful line describing such men: Kartavyam vacanaṁ tēṣāṁ samūhahitavādinām. The compound word, samūhahitavādinām is truly poignant. What it really means is that the corporate heads had to be advocates not only of their own guild but also advocates of public welfare in the most expansive sense of the word. The Sanskrit word hita has a range of meanings which can’t be easily translated into English. Does this remind us of what is today known as corporate social responsibility?

• Although each guild or corporation had a chief or Śrēṣṭhi, real power was vested in the board of directors or executive council.

• A mandatory clause included in the charter of each guild or corporation was a list of measures to prevent corruption. At the outset, it was compulsory for any member engaged in the business of the guild who received anything of monetary value—clothes, money, gifts, etc. – to deposit it in the guild’s treasury. If he did not, he had to pay eleven times that amount as fine.

• Any member who violated his agreement with the guild or corporation immediately invited various punishments including but not limited to penalties and expulsion. An expelled member would no longer be able to conduct business with anyone, almost for life.

• No member could enter into contracts with third parties using a clause that did not exist in his guild’s charter.

• Rules and regulations of a corporation had to be consistent with the sacred texts and the laws laid down by the King.

And now, we can briefly examine a rather interesting element. This is the ubiquitous commercial term Nigama, which even today means what it originally meant in ancient India: Corporation.

Interestingly, Nigama also means the following: Veda, city, marketplace, street, merchant, caravan, oath, an act of logical reasoning or deduction, a kind of tax… In fact, a study of the morphology of just this term undams a vast river of India’s commercial and cultural history.

We’ll look at just one example here. A number of clay seals discovered in the ancient Buddhist city of Vaishali between 1902-15 mentions the following terms:

1. Shreshti-Sarthavaha-Kulika-Nigama

2. Shreshti-Kulika-Nigama

3. Shreshti-Nigama

4. Kulika-Nigama

Illustrious scholars like Sri D.R. Bhandarkar, R.C. Majumdar etc., have deciphered it with great effort. Purely going by what these seals contain, they deduce that Nigamas were cities administered either jointly or severally by Shreshtis, Kulikas and Sarthavahas.

Kulikas were generally artisans such as sculptors, heads of specific guilds, and so on. In early medieval India, a Kulika also meant the member of a Panchayat Board. It might be interesting to learn that an inscription mentions Kulikas as warriors who protected the Kullu valley in Himachal Pradesh.

Sarthavahas ­were the heads of merchant caravans.

Evidence for the unbroken commercial and cultural continuity as well as the societal preeminence of these guilds is also available in a Gwalior inscription dated 877 CE. In that period, the city of Gwalior was administered by a board of Shreshtis and Sarthavahas. The inscription explicitly mentions their names as follows: “the merchant Vayyuka, the trader Ichchhuvaka, and the other members of the board of the Savviyakas were administering the city.”

Much later, in south India, these mercantile corporations played a substantial role as we’ve already seen in the earlier episodes. In other words, the unbroken continuity of these institutions was retained, pan India.

But the golden age of our guilds and corporations was truly the Gupta Era, like in all other realms of Indian history. But that is a story for another day.

Incorporation of a New Guild

And now, we can consider a few highlights regarding the incorporation of a new guild or corporation. To begin with, here’s a beautiful verse from the Brihaspati Sutra:

Koṣēṇa lēkhakriyayā madhyasthairvā parasparaṁ |
viśvāsaṁ prathamaṁ kr̥tvā kuryaḥ kāryāṇi anantaraṁ ||

We can break this verse down for the sake of convenience and to understand its practical aspects.

1. Here, the first step before incorporation was to perform an ordeal named Koṣa. Accordingly, each prospective guild member had to drink three mouthfuls of water in which the Vigraha of his Ishta Devata or Kula Devata was washed. If he met with disease or calamity within a fortnight, he was considered untrustworthy and therefore denied admission into the guild. In Hindu jurisprudence, this is known as Kosha-Divya, part of the famous nine or ten Divyas or ordeals meant to prove the guilt or innocence of an accused. In this case, the term “guilt” is synonymous with “unfitness for membership.”

2. After passing this test of trustworthiness, a convention or agreement was drawn up detailing the rules and regulations binding on all members.

3. This agreement was then attested by the Madhyastha, or guarantor. He was a man of high standing vouching for the pure and faithful conduct of the guild itself.

4. The completion of this threefold step was what inspired both mutual trust among guild members as well as in the public eye. Indeed, the phrase viśvāsaṁ prathamaṁ kr̥tvā, is actually quite profound and is a representative reflection of the defining trait of the people, society and culture of ancient India.

The procedure was rather elaborate covering minute details in both writing and practical action and a tad time-consuming. But once the guild was duly incorporated, it set to work. An elaborate memorandum and/or articles of association was drawn up which included the various items of the guild’s business. Various annexures listed out non-business activities that the guild would carry out: these chiefly included community projects, charitable works, donations to temples, participation in festivals, etc.

A soulful verse in the Brihaspati Sutra says that a corporation should also perform works of public utility such as: (1) building a house of public assembly like a town hall (2) a rest house providing free accommodation and meals for travelers and pilgrims (3) pools for supplying water to animals such as cows, bulls, buffaloes, horses and elephants (3) constructing temples and gardens (4) funding the poor people (Daridrāṇām) for performing sacred Samskaras such as Chaula, Namakarana, Upanayana, Antyeshti, or various Yajnas.

To reiterate, all these were formally written down in the corporation’s charter and was legally binding. The profounder element in all this is the fact that guild members were liable for judicial punishment if they transgressed or failed to perform these Dharmic duties!

And so, wherever any guild was located in Bharatavarsha and wherever a guild travelled to, it invariably carried out one or more or all of the aforementioned acts of Dharma. We literally have hundreds of inscriptions spread over at least two millennia to prove this but I will cite just three here:

1. A third century CE inscription at Nasik tells us that in the regime of King Isvarasena, (i) the guilds of potters and makers of water-clocks were given an endowment of 1000 Karshapanas (ii) the guild of oil-millers was endowed with 500 Karshapanas. From the interest on this money, both guilds had to provide medicines for the Sangha of monks dwelling in the caves atop the mount of Trirasmi.

2. Several inscriptions found at the Junnar caves dating back to the Indo-Greek period mention the following endowments: (i) donation of the the income of two fields with the Konachika guild for planting Karanja trees and banyan trees (ii) endowment of money with the guild of bamboo workers and the guild of braziers for pious activities (iii) the gift of a cave and a cistern to monks by the guild of corn-dealers.

3. The aforementioned Gwalior inscription dated 877 CE records the endowment given by the guild of oil-millers and the guild of gardeners to the Vishnu and Nava Durga Temples. This is how it reads: “ a perpetual endowment to provide oil for the lamps, the chiefs of the guilds of oil-millers should give one palika of oil per oil-mill on the ninth day of the Shukla-Paksha of every month. The chiefs of the guilds of gardeners should daily give for the requirements of worship, fifty garlands of the flowers available in the given season.”

The Government machinery which accorded a special status to guilds and corporations also responded in kind by enabling them to perform these Dharmic activities in a flawless manner. The department in charge of guilds and corporations comprised the following officials:

1. A President or chief

2. Two – Five executive officers

Here’s a sample of their qualifications as decreed by Brihaspati: deep learning in the Vedas and Dharmasastras, professional competence, impeccable honesty, firm control over the Self, non-temptable, and skilled in the secret of every business operating in the kingdom.

Courtesy: https://www.dharmadispatch.in/history/incorporating-a-guild-or-corporation-in-ancient-india-their-profoundly-dharmic-charter

Ancient Indian Guilds as Banks and Trusts - Sandeep Balakrishna

 

Banking Activities

GUILDS AND CORPORATIONS IN ANCIENT and medieval India also functioned as local banks that accepted public money and paid interest in the range of nine – twelve percent. Like any bank, they also lent money.

Larger guilds extended their banking services throughout India. Enough evidence exists to show that there was an impressive network of such banking guilds dotting the entire geography of Bharatavarsha. Their organization was coherent, well-linked and above all, they operated on the basis of strict honesty, integrity, fair dealing, and had a fear of incurring paapa. Measured on the parameters of professional competence, organizational efficiency, customer service, and delivery, these banking guilds can hold their own against contemporary banking systems. This was in an era where plain, simple trust and not fraud-detection software was the norm. Like their compatriot commercial guilds, these banking guilds discharged their share of charity and piety as we shall see.

All of these traits are precisely what inspired trust among the public who deposited large sums of money. Likewise, another significant feature of these corporations was the fact that they had a system similar to travelers’ cheques. Then there was another side to it as well. For example, if a traveler ran out of money in a faraway land, he could take a loan from a local guild and repay it to a guild back in his native town or village. That local guild was in turn connected with the guild from which the traveler had taken out the loan.

Village and town administrative bodies—similar to municipal councils—also provided banking services and worked closely with all denominations of commercial guilds. Banking guilds were recognised as an important constituent in the municipal government of ancient cities such as Pataliputra, Mathura, Ujjaini, Vidisha, etc. The town corporation or municipality recognized their duties as trustees of public money. These banking guilds received not only cash deposits but also endowments of property.

Epigraphic Evidence

We will examine how some of these features played out in the real life of the Hindu society throughout our history using hard inscriptional evidence.

A large cache of seals dating to the Gupta Era – roughly the fourth or fifth century CE – was recovered at Basarh (Bihar). A majority of these seals deal with corporations (nigama) of bankers. Others talk about guilds of traders (Sarthavaha) and merchants (Kulika). Interestingly, one seal mentions the name of Dodda, the head of a guild of bankers and traders. Together, they had formed a body resembling the modern Chamber of Commerce.

From here, when we travel down to Lakshmeshwara (Karnataka) two centuries later, we find an inscription dated 725 CE. This talks about the Constitution drawn up for the town of Porigere. Here is what it says: “the taxes of all classes of people shall be paid to the guild of braziers in this town in the month of Kartika.” Clearly, this guild also served as the local bank or treasury.

The Chola period supplies us with a truly spectacular portrait of how village corporations also doubled up as banks and treasuries. The hoard of fourteen inscriptions found in 1893 at the crumbling Vishnu temple makes us go awestruck. Together, they give us a comprehensive picture of the economic facet of village administration in South India. Every activity that generated money was given a dedicated fund. Thus, you had a tank fund, a rice fund, an oil fund, a flower-garden fund, a gold fund and various donor funds. These funds were managed by their respective guilds, which had to make regular deposits with the village assembly at stipulated periods. It is this feature that gave a corporate character to the village assembly (Sabha or Mahasabha). The treasury of the village assembly used the interest from these deposits to fulfill the duties laid down in the village constitution, including performing works of charity.

Guilds as Trusts

GUILDS AND CORPORATIONS were also executors of endowments and wills. Given the high degree of trust that these guilds inspired, people fearlessly made perpetual endowments and entrusted these corporate bodies to execute them. In turn, these bodies did this job flawlessly over five, six, and even ten generations. And they did this not merely as a job entrusted to them but out of a spirit of Dharma—that is, by executing the endowments, some part of that Dharma would also accrue to them. This automatically reveals the fact that these guilds were generational and had preserved institutional memory in a manner that can only be described as genius-level.

We need to remember that both the donor and the guild discharging the endowment regarded it as an act of piety and reverence. This is perhaps the most elevating feature of the corporate and business history of ancient India.

On the macro canvas, the intrinsic and inseparable elements of Hindu business history include spirituality, godliness, devotion and Dharma. We have a wealth of records that show how corporations themselves made generous endowments of an astonishing variety: for lighting lamps in temples in perpetuity, for upkeep of temples, for Annadaanam, for celebrating festivals, for providing food and other services to Sanyasins, Buddhist monks, for facilitating Tirthayatras…

I will cite just one hoary example.

A Shaka Prince ruling somewhere in the Sindh region in 120 CE made a perpetual endowment of 3000 Karshapanas for the benefit of Buddhist monks engaged in penance in the caves of Nasik. He entrusted the execution of this endowment to some guilds based in Govardhana! As they say in Hindi, Kahan Sindh? Kahan Govardhan, aur Kahan Nasik? Where is Sindh? Where is Govardhan, and where is Nasik? Remember, we’re talking of the India of 120 CE, or 1900 years ago.

Closing Notes

And now we’ve arrived at the final stage of this series. We will close with where we began. With Sri Dharampal’s passionate and sustained appeals for decolonising the Hindu psyche and thereby the Hindu society and civilisation.

A tragic, fatal and ongoing consequence of British or European colonialism was the creation of a deliberate myth that European discoveries and inventions and innovations in science and technology alone had all the power and all the secret keys to unlock the mysteries of the universe. Its companion-myth was that European political systems, social organization, institutional frameworks, and intellectual traditions were the sole repositories of all wisdom in the realm of human civilization.

Quite obviously, these myths could only be sustained on the brute strength of their military dominance and superiority. It was precisely this that made them confidently declare that everything in India’s past was primitive and fit only to be discarded. We must admit that they have phenomenally succeeded in instilling this myth among our own people from the lineage that began in the latter half of the nineteenth century. The 1857 war of independence was the last resistance whose foundational inspiration was wholly organic and homegrown.

One major, if not central component of this myth is directly if not entirely related to the Indian corporate and business life till then. It must be remembered that the British first arrived in India only to trade, i.e., in their essential position, they were supplicants before a vastly superior economic power spread across one of the largest geographies of the world. But absolute political dominance made them spin exactly the opposite story. Thus, inveterate racists like James Mill deliberately invented the fiction that our guilds and corporations were closed entities working in isolation, were fossilized and resisted change, progress and innovation.

The opposite is actually true and we can consider just one tiny bit of evidence that proves this reality. As we have seen throughout this series, our guilds and corporations enjoyed an extraordinary degree of autonomy and received royal protection as well. It was precisely this factor that made India the economic powerhouse of the world for several centuries irrespective of the rise and fall of empires and dynasties.

The fact that Indian products commanded extraordinary premium in international markets for such a prolonged duration is one common sense proof of our innovation, progress and other terms whose definitions are not yet settled.

We have the example of Sri Krishnadevaraya who had set up an entire Ministry of Perfumes, and the Shreshtis in his domain prolifically imported aromatic raw materials and copious barrels of exquisite perfumes from Persia, Portugal, etc.

Finally, on the basis of my limited studies in this subject, I can say with some confidence that a study of corporate and business life in ancient India is also an invitation to an ennobling penance. The names and accomplishments of some eminent businessmen have been preserved in royal edicts, epigraphs and grant records. These are the stories we must unearth, popularise and prescribe them as reading material for our children. If they reveal anything, it is this: that our business class was distinguished not just for their financial acumen; they made tons of money, yes, but they went far beyond this ken. In peacetime, they contributed to society and nurtured culture. In times of crisis, they stood with their chest thrust forward. When they were profoundly moved, they donated all they had and renounced the world in quest of higher callings.

The history of corporate and business life of Bharatavarsha is no less exalted than its spiritual history, which is but natural.

Think about it.

Courtesy: https://www.dharmadispatch.in/history/ancient-indian-guilds-as-banks-and-trusts-the-final-episode