Jacob Diamond
Nizam of Hyderabad · Alexander Jacob · Calcutta High Court · The "Unlucky Diamond"
The "Diamond Case" or "Imperial Diamond Case" was a significant scandal involving the 6th Nizam of Hyderabad, Mir Mahboob Ali Khan, and a Simla-based jeweller named Alexander Malcolm Jacob in 1891. The affair centered on an attempted purchase of a massive 184.75-carat diamond that turned into a high-profile legal battle in the Calcutta High Court, involving political intrigue, allegations of fraud, and a verdict that shocked the British establishment.
The Jacob Diamond, as it came to be known, is today recognized as the fifth-largest polished diamond in the world, valued at over $150 million. After the Nizam's estate litigation, the Indian government acquired it in 1995 for about $13 million, and it is now securely locked in the Reserve Bank of India vaults in Mumbai.
The Imperial Diamond's journey began in the winter of 1884 in the Northern Cape Province of South Africa. A sharp-eyed surveillance officer working for the Kimberley Mines noticed an oval-shaped rock with a rough jagged fracture at one end. As he picked it up, he felt its weight and saw the octahedral shape of a crystal protruding from the rock. Immediately, he knew that what he was holding was one of the largest rough diamonds ever found.
The Smuggling: Ordinary mine workers were searched to prevent pilfering, but the officer's position exempted him from the usual full body pat down and he managed to steal his find out of the mine without being detected. He then contacted four smugglers who paid £3,000 for the 457-carat rough diamond.
A night of gambling and heavy drinking saw two of the smugglers' gang blow their share. The others made it to Cape Town where an English dealer handed them £19,000 in exchange for the stone. With the diamond hidden in his pocket to avoid paying duty, the dealer boarded a steamer for London and began hawking it around the city's jewellery market, Hatton Garden.
A nine-member syndicate bought it for £45,000 — a 15-fold increase in price in just a few months, but still a mere fraction of its ultimate value.
On April 9, 1887, in the presence of the Queen of the Netherlands, M.B. Barends, the master craftsman of the polishing mills of Jacques Metz in Amsterdam, began shaping the stone. He used a special rotating wheel hardened with diamond dust known as a scaife, a pair of clamps, a microscope and a set of precision measuring instruments.
It was decided to cut the diamond as a brilliant to increase its value and appeal. It was a painstakingly slow process that demanded exacting attention to the direction of the grain running through the octahedral to ensure that each angle and parameter was cut perfectly. Barends could run his scaife for only an hour at a time to prevent the stone from overheating.
It was more than a year before he unveiled a cone-shaped 58-facet steel-blue brilliant weighing 184 carats — the largest brilliant-cut diamond in the world.
Weighing 184 carats, the Imperial was the largest brilliant-cut diamond in the world. Next in size came the Regent, which weighed 141 carats. The fabled Kohinoor was a mere 106 carats.
The stone had earned its name a few months earlier after it was shown to the Prince of Wales, who exclaimed, "What an imperial gem!"
The Imperial's journey to Paris — where it shared the limelight with such novelties as the recently opened Eiffel Tower, a faux African village with 400 negroes, and William Frederick 'Buffalo Bill' Cody's Wild West Show — had begun a few years earlier in Northern Cape Province.
Press Description: "The Imperial is without a single flaw. It is perfect in colour (white) and brilliance, and is among diamonds which are unmatched as regards colour, purity, brilliance and cut, by a long way the largest and heaviest cut diamond on the face of the earth."
As it spun slowly in its heavily guarded case at the Paris Exposition, the walnut-sized Imperial caught the eye of European potentates, mining barons, bankers and Oriental autocrats, but its price put it out of the reach of all but a handful of buyers.
Value: Estimates of its value ranged from £300,000 to £800,000 (or almost £50 million in today's currency), making it the most expensive stone ever to come on the market.
- Rough weight: 457 carats
- Cut weight: 184 carats
- Facets: 58-facet brilliant cut
- Colour: Steel-blue / white (perfect colour)
- Clarity: Without a single flaw
- Rank: Largest brilliant-cut diamond in the world at the time
- Comparison: Larger than the Regent (141 carats) and the Kohinoor (106 carats)
- Estimated value (1889): £300,000–£800,000 (≈ £50 million today)
Not everyone was deterred by the price. Thousands of miles away, in Simla — the summer capital of the British Raj — was a man who saw the diamond's value as an opportunity, not an impediment. Word had reached him through his network of agents that stretched through the passes of the Hindu Kush, across the deserts of Arabia and into Europe that the Imperial had come on the market.
He had watched India's princes compete against each other to build the biggest palaces, gather together the largest harems and own the most valuable jewels. From his cramped shop on Simla's famous Mall, Alexander Malcolm Jacob began to plot what would be the most audacious diamond sale in history.
In 1891, Shimla-based curio and gem dealer Alexander Malcolm Jacob attempted to sell a massive, 184.75-carat South African diamond to the 6th Nizam of Hyderabad. The resulting failure of the 46-lakh deal sparked an international scandal, a high-profile trial in the Calcutta High Court, and years of bizarre consequences.
- Alexander M. Jacob: A mysterious figure rumored to be a magician and foreign spy. He was widely known in India as "Jacob of Simla." He was the hero of Marion Crawford's first novel, "Mr. Isaacs," and in Kipling's "Kim" he figures as Lurgan Sahib, who taught Kim the lore of the East.
- The Stone: In July 1891, Jacob purchased an uncut 400+ carat stone and had it meticulously cut to 184.75 carats in Amsterdam. It was the largest brilliant-cut diamond in the world.
- The Price: He intended to sell it to Mir Mahboob Ali Khan, the 6th Nizam of Hyderabad, for 50 lakhs (later negotiated down to 46 lakhs of rupees).
- The Deposit: The Nizam deposited 23 lakhs of rupees into a Bank of Bengal account in Jacob's name as a good-faith advance. For the diamond to be sent to Hyderabad for inspection, the Nizam was required to lodge this security deposit to ensure its safe return if the sale did not go through.
- The Rejection: When Jacob arrived in Hyderabad with the diamond, the Nizam claimed the stone was smaller than he had envisioned and refused the purchase, demanding his advance back. The sources suggest this decision was made on the advice of the British Resident, Sir Dennis Fitzpatrick.
The deal quickly turned into a prolonged, bitter legal and political battle. Jacob, having already withdrawn and spent the 23-lakh deposit, refused to repay the Nizam and sued for the remaining balance in the Calcutta High Court.
The Calcutta court issued a warrant for Jacob's arrest and attempted to interrogate the Nizam. The Nizam viewed appearing before a commission of inquiry as an immense insult.
During the proceedings, a controversial "manifesto" was issued in the Nizam's name, reportedly written by Nawab Vicar-ul-Mulk, which was heavily criticized in the press. Mr. Jacob issued a "counter-blast," claiming the Nizam had actually purchased the diamond outright.
Legal maneuverings included:
- Witness Summons: Jacob's counsel, Mr. Garth, attempted to summon Sir Asman Jah (the Prime Minister) and Mr. Abid (the Nizam's Chamberlain) as witnesses. The court granted the summons for Abid but refused it for the Prime Minister because he was a resident of a Native State.
- The Nizam's Evidence: In a move that surprised many, the Nizam consented to give evidence before a commission in Hyderabad rather than appearing personally in Calcutta.
Smashing Political Rivals: A "reliable quarter" claimed the prosecution was orchestrated by a specific political clique to destroy the influence of Mr. Jacob and Mr. Abid, both of whom had easy access to the Nizam.
The Russian Conspiracy Theory: There was a rumored fallback plan by officials: if the case failed, they intended to tell the Nizam the prosecution was necessary to prove to the British that he had no secret dealings with Russia, framing Abid's trip to Persia as a mission to meet Russian agents.
On the afternoon of Friday, December 11, 1891, members of the public, the press and potential jurors arrived at the Calcutta High Court for the case of Queen Empress vs A.M. Jacob. The Pioneer reported that spaces around the table bar and the jury box in the Sessions Court were filled for hours before the hearing was scheduled to start.
The Prosecution Team: Sir Charles Paul led the prosecution's case, assisted by James Woodroffe and John Dunne. The newspaper noted that these gentlemen were "only outward and visible signs of the amount of legal skill retained in this case."
The Defence Team: Apart from John Inverarity, the defence team comprised Richard Garth and Tindal Arthur Pearson, both able barristers but mere minnows compared to the calibre of those representing the Nizam. Notably absent was William Rattigan who had arrived from Lahore but withdrew due to hostility from the Calcutta Bar.
Justice Wilson read out the thirteen charges against Jacob under sections 406, 409 and 403 of the penal code. In total, he was charged with:
- Nine counts of criminal breach of trust
- Three counts of criminal misappropriation
- One count of breach of trust as a merchant with respect to the 2.3 million-rupee deposit on the Imperial Diamond
Jacob pleaded not guilty to all charges.
"It is a case which is of the most vital importance to the prisoner himself, because it concerns his character, his reputation and his future welfare. It is equally a matter of the gravest concern to the Crown, for, if the facts which are before you are true, a grave offence has been committed, and in the interest of justice, the person committing this offence should be severely punished."
Paul urged the jurors to look at the evidence rather than the coverage the case was receiving in the press. He summarized the history of Jacob's dealings with the Nizam, a "young man of six or seven-and-twenty" whom he had tried to dupe into believing that the diamond was worth 12 million rupees, before dropping the price to 5 million rupees and finally to 4.6 million.
"When Mr Jacob told the Nizam that the diamond could be obtained for 50 lakhs he very probably knew that what he was stating was deliberately false." Indeed, Paul continued, "you will find his statements teem with falsehoods." Jacob, he said, was no more honest than Joseph Surface, a character in Richard Sheridan's play, The School for Scandal: "Full of morality, full of fine sentiment, but internally, habitually altogether wrong and immoral."
Inverarity argued that the evidence presented at the commission could not be admitted because there were important differences between the Magistrate's Court trial and the case before the High Court. Jacob now faced two additional charges of criminal misappropriation and one count of breach of trust as a merchant.
Justice Wilson's Ruling: Wilson ruled that, as the Nizam was not dead or in any way incapacitated, there was no reason why he couldn't give evidence. The only grounds given by him for not going to Calcutta was the expense and the inconvenience. As the case depended a great deal on what was said between the prosecutor and the accused, it was "of the highest importance that his evidence should be heard by a jury."
He also rejected the Nizam's assertion that he was unable to travel without his entire zenana and a thousand hangers-on: "All that may be very proper from the point of view of state and policy, but I have nothing whatever to do with that, and I do not think it has been shown that the Nizam, travel as he might, could not come here and give his evidence, if he desired to do so, within such limits of expense as would be perfectly consistent with what is reasonable."
The ruling was a huge boost for Jacob. With the commission's evidence declared invalid and the Nizam refusing to travel to Calcutta, the prosecution was deprived of its key witness.
Inverarity asked that the diamond be shown to the jury. For a stone known mainly for its size when it had arrived in India five months earlier, the Imperial was now one of the most notorious jewels in the world. It had traversed India hidden in ice-boxes, secret pockets and treasure chests.
As each member of the jury examined the stone, Inverarity reminded them that what they were holding was the largest brilliant in the world. "There were larger diamonds cut in rose form, but this was the largest brilliant, and it was of perfect shape, absolutely without flaw and of perfectly pure water."
As the last of the jurors finished their examination of the stone, it was handed to a policeman who replaced it in its special box. It was the last time it was seen in public for more than a century.
Asked if they had found the defendant guilty or not guilty, the foreman replied: "Not guilty on all charges."
The courtroom erupted in applause. Jacob felt a wave of relief come over him. He touched his coral amulet. Tuesdays were always auspicious and this day was no exception.
When the applause in the court finally died down, Inverarity applied for the return to his client of the diamond and the monies held by the court. Justice Wilson read a short order stating: "With the ending of the present trial, every other order in connection with the case is, of course, dissolved. The diamond must be returned to Mr Jacob."
It never was. The prosecution had been anticipating just such an outcome. Addressing the judge, Woodroffe said that, earlier that morning, a civil suit had been filed against Jacob in connection with the diamond transaction, and an injunction had been served upon him and the bank authorities, ordering them to keep the stone. Wilson had no option but to agree that the civil court order take effect.
In the confusion that had followed his acquittal, Jacob had remained sitting in the dock listening intently as the opposing legal camps tussled over his fate. It was only after Wilson stood up to leave the court that one of the defence team drew his attention to the fact that he had forgotten to discharge the prisoner.
The Times of London was disappointed, stating that for all the vague hints that "startling disclosures would be made regarding the Nizam's entourage," he emerged from the trial "without a stain on his character."
The Los Angeles Times was perhaps the most disparaging, calling the Nizam a "josh mark of large and bulging proportions" for being prepared to waste the equivalent of $1 million on a single glittering stone.
On March 11, 1892, the case was settled in an out-of-court agreement. Under its terms, Jacob was to hand over the Imperial Diamond to the Nizam who was to pay him 150,000 rupees.
Though the Nizam would be able to "feast his eyes by gazing on the costly treasure" for almost two million rupees less than he had originally agreed to pay, he didn't see it as a bargain. The diamond was considered manhoos (unlucky), a cursed gem that had brought him only unhappiness and misfortune.
For the next three years, Hyderabad's ruler kept the Imperial in the Bank of Bengal with instructions to sell it, but there were no takers. In 1895, the stone was returned to the state treasury where it remained locked away.
The Paperweight: Disgusted by the entire legal ordeal, the 6th Nizam stuffed the massive gem into an old shoe and cast it aside in his table drawer.
Discovery: The diamond remained there until it was discovered by his successor, the 7th Nizam, Mir Osman Ali Khan, who used it as a desk paperweight.
In 1911, Osman Ali Khan withdrew the stone from the treasury but soon lost interest in it. The disgrace the Diamond Case had brought down on the House of Hyderabad was never forgotten.
In 1944, in response to an inquiry from the Gemmological Association of Great Britain, Sir Arthur Lothian, the British Resident at Hyderabad, called on Osman Ali Khan to ask if he still had the diamond. The Nizam flared up "in the most extraordinary way, and said he thought such interference and meddling in his private affairs was most objectionable." He told Lothian his father had already had enough trouble over the stone and he "would rather throw his diamonds into the gutter than have to suffer such an insult."
As a boy, Jacob was sold as a slave in Constantinople to a Turkish pasha who was kind to him and taught him the literature and history of the Orient. Penniless and friendless on the death of his master, he set out on a pilgrimage to Mecca and eventually made his way to Bombay.
From Haiderabad he set out for Delhi with his small savings and set up as a dealer in precious stones, with such success that in a few years he became the possessor of a great fortune and a friend of the highest Anglo-Indian officials. His home at Simla was one of the most wonderful in India, as Kipling describes it.
Although Jacob was ultimately acquitted of fraud by the Calcutta High Court, the court had no jurisdiction over the Nizam's territory. The British government, suspicious of Jacob's ties to Russia, banned him from dealing with Indian princes. He received no further payments and died penniless and forgotten in 1921.
The Jacob Diamond is recognized as the fifth-largest polished diamond in the world, valued today at over $150 million.
- Weight: 184.75 carats
- Cut: Brilliant cut (largest brilliant in the world at the time)
- Quality: Perfect shape, absolutely without flaw, perfectly pure water
- Current Location: Reserve Bank of India vaults, Mumbai
- Acquisition: After prolonged legal battles over the Nizam's estate, the Indian government acquired it in 1995 for about $13 million
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