Page 148 - Histories of City and State in the Persian Gulf_Neat

128 Histories of City and State in the Persian Gulf

divers had plummeted. Not only did the financial crisis affect the diving
population and the pearling capitalists but it also paralysed the business of
merchants and shopkeepers, and brought the pearling and import econo-
mies to a standstill. 35 The merchants and the affluent propertied classes
resorted to moneylenders to service their debt. In order to avoid starvation
workers and artisans were forced to buy on credit from shopkeepers whose
fortunes and ability to obtain supplies were dependent on the precarious
position of wholesalers and import merchants.
Yusuf ibn Ahmad Kanu, the richest entrepreneur of Manama, went
bankrupt in 1935 and many of his closest business associates followed
suit. The collapse of Kanu’s fortune epitomised the downfall of the town’s
eclectic entrepreneurial class. His offices in Bahrain and Bombay, the
centres of his shipping empire, were used by pearl merchants for money
transfers and to deposit income from pearl sales, which financed the
following pearling season. As the financial depression and poor returns
from his own business stifled Kanu’s celebrated cash flow, he could not
pay his creditors, including import–export merchants and food dealers.
The Bashmi family, for instance, Manama’s largest rice importers, went
bankrupt after they sold all their stock on credit in 1927. When Yusuf
ibn Ahmad died in 1946, his relatives faced considerable financial
difficulties. 36
The baladiyyah entered the chain of debt plaguing both rich and poor.
As residents could not pay taxes, they became heavily indebted to the
municipality, causing its income to halve between 1929 and 1933. 37
Some members of the mercantile elite used their position as municipal
councillors to avoid their fiscal obligations, as suggested by the large sums
they owed to the treasury in tax arrears by the mid 1930s. In 1935, the
majlis started openly to discuss outstanding debts and until 1937 Belgrave
threatened to dismiss those councillors who continued to refuse the pay-
38
ment of baladiyyah tax. The council increasingly resorted to the direct
collection of tax arrears from residents who were considered to be rela-
tively well off before the crisis in order to avoid lengthy proceedings in
the civil courts and to rescue the municipal treasury from collapse.

35
For further details on the pearl crisis see pp. 160–3.
36
Field, The Merchants, pp. 275–86; Kanoo, The House of Kanoo, pp. 21–4, 43–7; interview
with Ibrahim Bashmi, Manama, 18 March 2004.
37
‘Annual Report for the Year 1365’ in The Bahrain Government Annual Reports, 1924–1970,
vol. III, p. 47.
38
Report by Municipal Budget Committee, 22 Safar 1354/25 May 1935 and MMBM,
13 Safar 1354/16 May 1935, R/15/2/1922 IOR; Political Agent Bahrain to Belgrave, 4
and 27 June 1932, R/15/2/1920 IOR; MMBM, 26 Muharram 1356/4 April 1937,
R/15/2/1923 IOR.