In 1861 some seventy British merchant firms were located in the bustling city of Calcutta, on the banks of the Hooghly River in Bengal. These were the agency houses, all private partnerships, which conducted the large trade between Britain and northern India, as well as a substantial part of the commerce within north-east India and between India and neighbouring Asian territories – the so-called ‘country trades’. The Calcutta agency houses, together with their counterparts in Bombay in western India, were the cutting edge of British capitalism in South Asia. Times were good for them. The shock of the Mutiny, which had caused panic in the city in 1857, had abated; the authority of the East India Company had been replaced with direct rule by the British Crown, leading in turn to a number of reforms in the way that British India was governed; and they stood on the cusp of an investment boom occasioned by the introduction of limited liability into the company law of Britain and India and by the effects of the outbreak of the US Civil War on India's foreign trade. The agency houses in India, although varying in size and differing from each other in individual respects, shared certain common characteristics. First, they worked on commission, acting as agents for manufacturers or merchants in Britain, although this did not preclude them from trading in their own right, using their own capital; second, they either had diversified or would diversify into various non-trading activities in and around the locality of their commercial operations; third, some of them accepted ‘heavy public deposits of savings’, thereby acquiring the functions of merchant banks; fourth, a number had close connections with the City of London, or wealthy families in Lancashire and Glasgow; and fifth they were ‘largely the work of family and clan groups among whom the Scots were particularly prominent’. Such Scottish connections, however, were not necessarily directly with Scotland itself – frequently they reflected links between Calcutta or Bombay and expatriate Scottish family firms in the port cities of Liverpool and London. Of the Calcutta agency houses, in fact, the majority acted on behalf of merchants in London.