Books

How the Parsis built Bombay

| Updated on January 15, 2018 Published on November 06, 2016

Title: Goras and Desis: Managing Agencies and the Making of Corporate India, Author: Omkar Goswami, Publisher: Penguin Random House, Price: ₹299

Omkar Goswami’s new book details the fascinating rise of the Indian textiles industry in British India

In sharp contrast to Calcutta, Bombay was a truly cosmopolitan metropolis. From the last quarter of the 19th century, Parsi, Gujarati and Marwari entrepreneurs and businessmen were at least as important as their British and European compatriots; and the explicit racial superiority of the British, so obvious in the large offices, restaurants and clubs of Calcutta even up to the late 1960s, was scarcely present in Bombay. Nowhere was this more apparent than in the growth of cotton spinning and weaving mills in Bombay and Ahmedabad...

Three Parsi families

Though mostly Indian, Bombay’s mill owners came from diverse backgrounds—Parsis, Gujarati Hindus, Baghdadi Jews and even the odd Khoja Ismailis. Some of them, particularly the Parsis and the Baghdadi Jew family of the Sassoons, had made their fortunes in shipping Malwa opium to Canton, and had moved to cotton spinning and weaving from the second half of the nineteenth century.

Three Parsi families were most active in Bombay’s textile industry: Petit, Wadia and Tata. In 1855, Manekji Petit, a prosperous merchant, founded the Oriental Spinning and Weaving Mill, the first composite mill in the city. It was so successful that his son Dinshaw Manekji Petit (1823–1901) built a second in his father’s name in 1860. By the mid-1880s, the younger Petit controlled six mills and a dyeing house in Mahim, with major interests in yarn and cloth trade. An important civic personality of Bombay in the late nineteenth century, he was knighted in 1887, served as the sheriff of the city, was a member of the Legislative Council and was conferred a baronetcy in 1890.

Sir Dinshaw helped in setting up another mill owner, Nowrosjee Nusserwanji Wadia. Frustrated at the failure of some equipment in one of his mills, he called upon Wadia, a clever young engineer from a wealthy trading and shipbuilding family, to look into the matter. Wadia fixed the problem and also set up a 4,000 horsepower steam engine in one of Sir Dinshaw’s mills. By then, young Wadia was hooked on cotton mills. Being rich and having engineering expertise, Wadia soon set up three mills under his control, including the iconic Bombay Dyeing and Manufacturing Mills in 1879, and built ten others.

The biggest Parsi player was doubtless Jamsetji Nusserwanji Tata (1839–1904). His father Nusserwanji, having moved from Navsari to Bombay, had amassed a huge fortune in trading, especially from opium exports to China. The son went many steps further in trade and manufacturing. Being a graduate from Elphinstone College, Bombay, and having spent considerable time in Britain understanding the nuances of textile mills, Jamsetji bought a bankrupt oil mill at Chinchpokli in Bombay in 1869, converting it into a cotton mill. Naming it Alexandra Mill, Tata sold it two years later for a hefty profit.

He then set up the Central India Spinning, Weaving and Manufacturing Company in Nagpur with 14,400 spindles and 450 looms, which was rechristened Empress Mill in 1877 when Queen Victoria became the Empress of India. Though seemingly radical at the time, the choice of Nagpur proved to be brilliant. Berar cotton was close at hand, as was central Indian coal; yarn was sold to many handloom centres close by; and the coarse cloth found local markets without undue competition from either Bombay or Lancashire.

Jamsetji introduced ring spindles at Empress Mill long before others did, which dramatically increased spinning productivity. And instead of taking a commission on sales as most managing agencies were wont to do, he took his cut from profits. He acquired two more bankrupt mills, Swadeshi in Bombay and Advance Mill in Ahmedabad, and turned these around quickly enough.

The other players

Of the many Hindu mill owners in Bombay, the three most notable of them towards the end of the nineteenth century were Morarjee Goculdas, Damodar Thackersey Mulji and Khatau Makanji. Goculdas set up and took control of the eponymous Morarjee Goculdas Spinning and Weaving Company Limited in 1874 and went on to establish the Sholapur Spinning and Weaving Company.

Mulji, a wealthy piece-goods merchant in the city,acquired three mill companies and set up a fourth, the Western India Spinning and Manufacturing Company Limited, in 1880. And Khatau Makanji set up the Khatau Makanji Spinning and Weaving Company in 1874, which was soon to be one of the largest composite units in Bombay.

David Sassoon (1792–1864) escaped with his family from Baghdad to Bombay in 1832, fleeing the ire of a high-ranked noble in Mesopotamia. Initially, his business was dominated by the hugely profitable opium trade to Canton. One of his sons, Elias David (E.D.), after returning to Bombay from a long stint in China, turned his attention to cotton textiles. E.D. started out by purchasing Alexandra Mill in 1874 from Jamestji Tata and renaming it the Sassoon Spinning and Weaving Company; he then went on to promote four more mills, thus becoming a force in the industry.

It wasn’t as if there were no British managing agencies engaged in cotton textiles in Bombay. James Finlay & Company managed three mills — Finlay, Gold Mohur and Swan; W.H. Brady & Company also managed three — New Great Eastern, Colaba and the New City of Bombay; Killick Nixon controlled Kohinoor Mills; and Forbes Forbes Campbell & Company managed Simplex Mills. However, unlike in Calcutta, these managing agencies neither dominated the business nor the Bombay Mill Owners Association nor even the social scene.

Now for the industry in Ahmedabad. Here, the pioneer was Ranchhodlal Chhotalal, born in 1812 to a Nagar brahmin family. He, like Dwarkanath Tagore, worked as the senior-most Indian officer of the British government in the Panchmahal area of Gujarat. Accused of taking a bribe in 1853, Ranchhodlal was discharged from service — an event that changed him from a servant of the raj to an industrialist. After years of trying to tie up machinery, technicians and finances, Ranchhodlal finally secured ₹100,000, of which ₹25,000 was his own funds, to set up a spinning mill.

Dadabhai Naoroji, then in England, was his machinery purchasing agent. He camped in Cambay for nearly three months, supervising the unloading of various machinery, and getting them transported by bullock carts over fifty-two miles to Ahmedabad.

Finally, Shahpur Mill was set up in 1861. For his services, Ranchhodlal put in place a managing agency which, in addition to running the mill, would receive 2.5 per cent from the sale of yarn. The mill was profitable, which encouraged him to build another. Ranchhodlal died in 1898, the richest man in Ahmedabad, a member of the Bombay Legislative Council, office-bearer of the Indian National Congress, donor to various charities and a Companion of the Indian Empire.

Ranchhodlal’s success spawned others’. His friend Becherdas Ambaidas, who had a commission to supply grain to the army of the East India Company, expanded first to cotton trading and then set up the second mill in Ahmedabad in 1867. By 1892, the city had eleven mills with over 289,000 spindles and almost 4,500 looms.

MEET THE AUTHOR

Omkar Goswami runs economic consultancy CERG Advisory. He is a DPhil from Oxford (1982) and has researched and taught at the Delhi School of Economics, Tufts, Jawaharlal Nehru University, Rutgers and the Indian Statistical Institute, and was a consultant to the World Bank, the ADB and OECD.

Extracted with permission from Penguin Random House India

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Published on November 06, 2016
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