The Emergence of an Industrial Labor Force in India: A Study of the Bombay Cotton Mills, 1854-1947

THE EMERGENCE

OF AN INDUSTRIAL

LABOR FORCE

IN INDIA

THE EMERGENCE OF

AN INDUSTRIAL LABOR FORCE

IN INDIA

A Study of the Bombay Cotton Mills, 1854-1947

*

MORRIS DAVID MORRIS

University of California Press

Berkeley and Los Angeles

1965

University of California Press

Berkeley and Los Angeles, California

Cambridge University Press

London, England

©1965 by The Regents of the University of California

Library of Congress Catalog Card Number: 65-13143

Printed in the United States of America

FOR

Melvin Moses Knight

Acknowledgments

During the course of writing this book I became the debtor of a very great many people who provided aid, comfort, and criticism. To all of them I am deeply grateful. I must thank particularly Kantilal Hiralal Shah, Bobbsee Shah, and Kusum Thakore Chhatrapati who eased my work in Bombay in very special ways. Donald F. Gordon, my colleague for many years, tolerantly and generously gave time and thought to my intellectual problems. J. R. Huber and J. B. Gillingham lightened the burdens of authorship in ways available only to departmental chairmen. Douglass C. North, Director of the Institute for Economic Research at the University of Washington, always seemed able to find the little bits of help for me that made it easier to finish this work. And Mrs. Marijane Anderson, Secretary of the Institute, solved most of my practical problems in her usual intelligent and efficient fashion.

My research burden was made less arduous because of assistance from the following sources: R. G. Gokhale and his staff at the Bombay Millowners’ Association, the University of Bombay School of Economics, Bombay Labor Office, the Bombay Archives and Secretariat, the India Office Library, and the University of Washington Library.

Parts of the research and writing were made possible by grants from the Rockefeller Foundation, the Ford Foundation Foreign Area Fellowship Program, the American Philosophical Society, and the Institute for Economic Research at the University of Washington.

M.D.M.

Contents

Contents

Abbreviations

CHAPTER I Nature of the Problem

CHAPTER II Economic Development of Bombay City

CHAPTER III History of the Bombay Cotton Textile Industry

CHAPTER IV Supply of Labor

CHAPTER V Stability and Instability in the Labor Force

CHAPTER VI Hours of Work

CHAPTER VII Work Regulations in the Mills

CHAPTER VIII Administration of the Work Force

CHAPTER IX Wage Structure and Labor Discipline

CHAPTER X Trade Unions, the State, and Labor Discipline

CHAPTER XI Summary and Conclusions

APPENDIX I Average Number of Mill Hands Employed Daily on All Shifts, Bombay Cotton Textile Mills, 1865-1947

APPENDIX II Average Daily Employment of Men, Women, and Children, Bombay Cotton Textile Mills, 1884-1947a (All shifts)

APPENDIX III Index of Monthly Full-Time Wages in the Bombay Cotton Mill Industry, 1875-1947

APPENDIX IV Places of Origin of Cotton-Mill Work Force

APPENDIX V Bombay Cotton Mill-Hand Caste Information

APPENDIX VI Uniform Code of Work Regulations Proposed by the Bombay Millowners’ Association, 1892DCCLXXXIII

APPENDIX VII Standing Orders for Mill Hands in the Bombay Cotton Textile Industry, 1937DCCLXXXIV

Bibliography

Index

Abbreviations

CHAPTER I

Nature of the Problem

The career of the industrial labor force during the expansion of modern industry has attracted considerable attention, but scholarly studies have been concerned primarily with the social response of the work force to the new industrial environment, specifically with the growth of trade unions and labor movements. However, the economic historian is preoccupied with more than this. He is concerned with all the changing patterns of economic institutions, recognizing these as techniques which evolve to deal with allocative relations which are themselves changing. Viewed thus, the early phase of an industrial revolution introduces a new technology that sets new problems and demands new solutions. Factors of production have to be mobilized in different ways, and institutions have to be changed to accomplish this. Seen in these terms, many more dimensions are added to the historical analysis of early industrialization as it involves the labor force. A new range of intellectual issues appears. We now must enquire into the creation of new labor markets and changing patterns of labor deployment, into the enhancement of skill and occupational mobility, the habituation of the work force to novel obligations and routines, and the development of new wage structures. In short, we must investigate how the early entrepreneurs solved the problems of recruiting, organizing, and administering the labor force. The focus of analysis shifts from social protest to social administration, from a stress on the horrors of industrialization to an analysis of the clumsy grapplings with new problems and the efforts made to handle them, first with traditional devices and then gradually with painfully formulated new techniques. When the phenomenon is viewed in these terms, even trade union development can be studied with fresh insight as the instrument of social discipline and administrative coordination.

These general comments about the limited intellectual range of past labor force studies apply with particular force to studies on the history of the industrial labor force in India.¹ Such detailed scholarship as there has been is almost entirely preoccupied with the emergence of Indian trade unions and labor movements, with the work force re sponse to proletarianization. Virtually no attention has been given to the problems of mobilizing a labor force and disciplining it to the requirements of Indian industry. Yet the availability of a work force untrammeled by traditional restrictions or social and sentimental barriers to mobility is one crucial element in the economic development of an industrial society. To what extent has the lack of such a mobile labor force inhibited the growth of Indian industry? How greatly have the sentiments of agricultural attachment, the religious tenets of caste and family, and the continued existence of rural occupations operated to limit the mobility of labor and the free flow of a work force into the factories of India? Has the problem of mobilizing such factory labor differed significantly from that which faced the nations of the West? In other words, is the problem of achieving this precondition of industrialization in India different in kind or merely in tempo from the pattern elaborated by countries of the North Atlantic nucleus?

Once having obtained a work force of adequate proportions, what have been the consequences of this achievement? What were the problems of taking a motley collection of rural folk of varying sociocultural traditions and assimilating it to factory work with its rationalized production processes, its simple repetitious tasks, its pace set by the machine, and its duration set by an employer?

Although there is complete agreement that in India today unemployment both overt and covert is widespread, there has been almost equally uniform agreement among industrialists, officials, and scholars that industrial development in India before 1947 was seriously handicapped by the difficulty of mobilizing a stable, disciplined labor force of adequate size. This was the considered judgment of the Indian Factory Labor Commission of 1908: ‘The position of the operative has been greatly strengthened by the fact that the supply of factory labor undoubtedly is, and has been, inadequate; and there is, and has been, the keenest competition among employers to secure a full labor supply." ²

The classic statement on the subject appeared in 1931 in the report of the Royal Commission on Labor in India:

Throughout the greater part of its history, organized industry in India has experienced a shortage of labor. A generation ago, this shortage was apt at times to become critical. … [After 1905] the position became easier in the factory industries, but even in these, before the [first world] war, few employers were assured of adequate labor at all seasons of the year. … Perennial factories … have now reached a position in which most of them have sufficient labor at all seasons and there is a surplus of factory labor at several centers. … Speaking generally, it would be true to say that the turning point came during the last five years. Up to that stage, labor tended to have the upper hand in that there was competition for its services; since then the tendency has been for the workers to compete for jobs.³

The same point was recently made by an American scholar who referred to the excess of jobs over job-seekers which typified Indian industries for the period between 1900 and 1935 and by the official historian of the Indian cotton textile industry. 4

Not only is this purported shortage of labor supposed to have affected directly the rate of industrial growth in an adverse way; it is supposed to have shaped also the behavior and attitudes of workers coming into industry. Put briefly, the behavior pattern is described in one of two ways. One line of analysis suggests that, labor being short in industry, employers had to scramble for their work force and make all sorts of concessions which weakened their hold on the workers. The employees, because of the absence of effective employer-imposed discipline, were able to indulge in the luxury of all too frequent returns to the villages to which they were unyieldingly devoted.⁵

The alternate and essentially contradictory hypothesis recognizes the potential surplus of labor in the countryside that was available for urban employment. It argues that as a consequence of this surplus employers were able to abuse workers unmercifully. Since working conditions in the factories were intolerable, labor tended to remain in the villages or was very quickly forced back to the land by utter exhaustion.⁶

Whatever the specific line of causation accepted by scholars, the general conclusion is that workers retained their rural links to an extent which limited the supply of labor for industrial development. As a consequence, disciplined urban-industrial (i.e., proletarian) types of behavior did not develop. The failure of a proletarian outlook to appear was accompanied by the purported high rates of absenteeism and labor turnover and the slow growth of trade unions in Indian industry.

Interestingly enough, neither of these hypotheses nor the conclusions drawn from them have been tested by any substantial exploration of the historical material. Generally, what has been written is either tautological in character or deficient in analysis. Much of the literature tends to base interpretation on hypothetical psychological and sociological propositions which themselves are highly suspect. Moreover, the methodology is questionable. The historical argument typically rests on scattered fragments of evidence taken indiscriminately from all areas of the country and from all sorts of industry, seasonal and perennial, large-scale and small-scale; it relates to all kinds of labor, casual and permanent, unskilled and skilled. It is impossible to generate a satisfactory analysis from this sort of mélange, particularly during a period when modern industry was making only its first timid mark on the economy and there was no national market for labor.7

Another weakness of the studies of the economic history of the labor force is the tendency to ignore the possible contributions of formal economic theory to these investigations. Though it would be pretentious to attempt to apply truly sophisticated economic analysis to nineteenth- and early twentieth-century developments in the absence of better data, the use of even elementary theoretical notions from economics can be extremely useful. Not only will the introduction of these tools help to synthesize the evidence into a more satisfactory framework, but their employment will also point the way to the formulation of new problems.

I have suggested that satisfactory studies of the creation of an industrial labor force cannot be made on an all-India basis. To get at the meaning of this process, case studies are essential. This study is an attempt to contribute to the satisfaction of this need by a detailed study of the creation of a labor force in the cotton textile industry of Bombay City from its inception in the 1850’s to 1947.8

Concerned as I am with the problem of how a labor force is mobilized and organized for factory employment during the early stages of industrialization, my study had to make use of an industry where the factory system had been fairly well developed. In India as in Britain nearly a century earlier the cotton textile industry was the pace setter of industrialization. It was India’s first factory industry, and it remains even today the most important.⁹ Moreover, the industry was Indian in origin, and Indian entrepreneurs were almost entirely responsible for its expansion. These features made it an obvious choice for a first study.

Given my view that all-India studies tend to be too diffuse for precise analysis, the cotton textile industry also offered the advantage of concentration of activity. The two obvious centers in terms of length of history were Bombay City and Ahmedabad. By all other tests of importance as well —number of mills, number of spindles and looms installed, output, capital invested, and employment — the two cities represented the most important concentrations of textile production in the country.10 Having narrowed the choice, I had no difficulty in finally selecting Bombay as the focus of my study. First, it was the city in which the modern textile industry and genuine factory production began, and despite many vicissitudes, it has remained the country’s foremost textile center. Second, unlike the situation in Ahmedabad, the Bombay work force is heterogeneous. It has been drawn from many areas whereas Ahmedabad’s labor has come mainly from near-by districts. Certain aspects of the economic history of the labor force could be explored only in the more complex Bombay situation. Third, the Bombay industry has had a long and bitter tradition of industrial conflict. There have been more labor disputes in the Bombay cotton textile industry, and they have been of greater intensity than in any other place or industry in the country. The trade unions which have emerged have had a complicated, tumultuous, and unstable career. Ahmedabad, in this regard too, is less interesting because it represents a special case. Industrial relations have been more peaceful, and its trade unions have been relatively stable. These conditions were not typical of India generally but were due to the personal influence of one man, M. K. Gandhi. Fourth, and not least, the the records for Bombay are more extensive and more easily accessible than the Ahmedabad materials.

On the other hand, a great deal has been written about the Bombay textile work force. Virtually all reports and studies have emphasized the difficulty of recruitment and the failure to achieve a stable, disciplined, efficient work force. In the face of virtually unanimous agreement that Bombay textile mills suffered from a halting uncertain supply of labor and that the labor that did come into the factories did not respond with that degree of stability, reliability, and efficiency on which productive operation depended, is there anything new and worthwhile that historical analysis can add?

I think there is a great deal that can be contributed by a historical study. Careful analysis will throw quite a novel light on the whole process of labor force creation. The evidence will show that contrary to the canonical view, the supply of labor for industrial requirements was not hard to get. The material will also indicate that the level of labor force performance was almost entirely set by the nature of industrial organization and operation. In other words, the basic quality of labor performance as it emerged in the cotton textile industry was the result of employer policy and responses to market forces and not the consequence of labor force psychology or social structure.

In considering these problems there are some important matters of definition. Most of these can be considered as they arise, but I must say a few words here about the concept of labor discipline as I use it. When I speak of a disciplined industrial labor force I am referring to a body of workers who are responsive to the technical requirements of industry, to the web of rules at the work place, and to the incentives (and disincentives) of the market mechanism. The determination of the degree of discipline must be based on the use of measurable behavioral indexes.

In some circles the term labor commitment has been substituted for labor discipline. I object to the use of the word commitment because that term tends to carry with it a psychological component. As Moore and Feldman tell us, Commitment involves both performance and the acceptance of the behaviors appropriate to an industrial way of life.11 In other words, the use of the term lays stress on the phenomenon of internalization or moral conformity as crucial to the functioning of an industrial system.¹²

I do not propose to examine the problem in detail, but let me briefly indicate two major difficulties raised by the introduction of this psychological element. First, it is very difficult to measure the degree of psychological acceptance at any moment in time, and it is impossible to measure the phenomenon as it existed historically. Second, it is not clear what psychological commitment to the industrial system means. Kerr and Segal have implied that commitment must be to a specific set of property relationships as well as to a specific set of technological requirements.13 This suggests the questionable proposition that a labor force that collectively identifies itself with revolutionary political objectives is of necessity not committed to the requirements of industrial production.

The technical requirements of the industrial system can tolerate a very wide variety of attitudes. For example, is the American worker who eagerly seeks as much free time as possible for fishing and hunting and who has a yen to retire to a farm truly committed? Is the Indian worker who strikes frequently and disruptively committed? The answer may be ambiguous in psychological terms. But the answer in both cases is affirmative so far as the effective functioning of modern enterprise is concerned.14 This does not mean that other systems of organization and greater doses of identification would not extract superior levels of performance from the work force. However, such a notion implies the existence of some absolute standard by which to measure acceptance. A major complicating factor is that the productivity of an industrial system is not solely a matter of technological potential as qualified by the degree of labor force acceptance of the system. There are market relationships and the entrepreneur s involvement in them which will fundamentally affect the level of performance in industry. Given these difficulties of meaning and measurement, I exclude the psychological component from my definition.

This study does not pretend to be a complete description of all aspects of the career of the Bombay cotton textile labor force. It is by design limited to those topics which bear directly on the specific problems of recruitment and the establishment of factory discipline. But even on the issues with which it deals, I am not completely satisfied. Weaknesses of the data, particularly on the quantitative side, have forced me to leave gaps although I am, of course, convinced that the main lines of the argument are correct. It is possible that others will uncover new materials which will clarify ambiguities and complete the record. I am not particularly hopeful that this will occur.¹⁵ It is more likely that we will have to explore the same problems in other regions and in other sectors of the economy to resolve some of the issues left unsettled by this study.

There are other important reasons for studying these problems in other sectors of the Indian economy. The economic historian should be more concerned with the general pattern of economic change and adjustment than with the specific case. In this study I am not only interested in comprehending the dynamics of industrial labor force creation in Bombay; I am ultimately concerned with possible generalizations about labor force creation in India as a contribution to the nineteenth- and twentieth-century Indian economic history. This involves a comparative analysis of a number of cases. I would suggest that to explore the full array of problems and emerge with satisfactory conclusions on an all-India level requires the study of at least four other instances — the steel industry, railways, coal mines, and plantations.¹⁶ An analysis of this kind, properly controlled, could also make some substantial contribution to our understanding of the world-wide process of labor force creation during the early stages of industrialization. It might lend greater precision and realism to one of the variables we must incorporate into a general theory of economic change and growth.17

Unfortunately, a great deal of monographic work is necessary before we can have a truly adequate picture of the early stages of labor force creation even in India. Recognizing this, I think it useful to suggest to readers with an interest in these matters some of the types of problems which need examination and some of the lines along which analysis might proceed. Therefore, throughout the study I have felt free to indicate specific questions the investigation of which might prove useful. In this sense, the study is as much a syllabus of further work to be done as it is an investigation in its own right.

Let me say a few words about the data that were available. Beginning with the first Bombay Factory Commission investigation in 1874, various committees and commissions have produced a spate of reports from which much can be drawn. From its inception in 1921 the Bombay Labor Office produced reports, surveys, and a monthly Labour Gazette which are valuable sources. The annual reports of the Bombay Mill owners’ Association provide a very useful series from 1875; and the files of the Indian Textile Journal, which began publication in 1890, are equally important. In addition there are numerous other sources which will be noted, but unfortunately the period from the industry’s beginning to 1875 is terra incognita. No substantial information seems to have survived. The very earliest phase of labor force creation, in some ways the most interesting, has only been hinted at in later material.

The cotton textile industry of India, and especially the Bombay sector of it, is perhaps better served by an abundance of statistics than almost any other major part of the economy. Nevertheless, appearances are deceptive. At every point the statistics are subject to serious question, and this study must depend, as historical studies unfortunately so often must, on the qualitative rather than on the quantitative evidence. I shall invoke statistical data wherever possible, but the intention is that they should provide rough orders or magnitudes rather than precise relationships.

1 The term India throughout refers to the pre-1947 boundaries.

2 IFLC 1908,1, p. 19.

3 RCL 1929, Report, p. 21.

4 Oscar A. Ornati, Jobs and Workers in India (Ithaca: The Institute of International Industrial and Labor Relations, Cornell University, 1955), p. 35; and Mehta. CMI, passim. See also Max Weber, The Religion of India (Glencoe, Illinois: The Free Press, 1958), p. 114.

5 IFLC 1908, I, pp. 18-19; IDC 1922, p. 1; RCL 1929, Report, p. 22; and Mehta, CMI, p. 118.

6 IFLC 1908, I, pp. 81-93; Mehta, CMI, p. 119; G. B. Jathar and S. G. Beri, Indian Economics, II (7th ed., London: Oxford University Press, 1945), pp. 76-77; and D. R. Gadgil, The Industrial Evolution of India in Recent Times (4th ed., London: Oxford University Press, 1942), pp. 127-130.

7 Studies in the field of modern Indian economic history generally suffer from the tendency to work on an all-India basis. For some comments on this and other problems in the field, see M. D. Morris and B. Stein, The Economic History of India: A Bibliographic Essay, Journal of Economic History, XXI, No. 2, June 1961, pp. 179-207.

8 By 1947 the main lines of the process with which I am concerned had been almost entirely worked out.

9 For some data on the relative importance of employment in various factory industries, see C. A. Myers, Labor Problems in the Industrialization of India (Cambridge: Harvard University Press, 1958), p. 17. For a comparison of value added in Indian manufacturing industries, see Department of Economic Affairs, Ministry of Finance, Government of India, Final Report of the National Income Committee, February 1954 (Delhi: Manager of Publications, 1954), p. 66.

10 S. D. Mehta, CMI, pp. 234 and 265.

11 W. E. Moore and A. S. Feldman (eds.), Labor Commitment and Social Change in Developing Areas (New York: Social Science Research Council, 1960), p. 1.

12 Ibid., p. 9.

13 C. Kerr and A. Siegal, The Structuring of the Labor Force in Industrial Society, Industrial and Labor Relations Review, VIII, No. 2, January 1955, p. 163.

14 Although my analysis will suggest that high rates of strikes, absenteeism, and labor turnover are consistent with the existence of a disciplined labor force, there are many scholars who see these primarily as evidence of protest against the acceptance of the new imperatives of the industrial work community. See, for example, C. Kerr, F. H. Harbison, J. T. Dunlop, and C. A. Myers, Industrialism and Industrial Man, International Labor Review, LXXXII, No. 3, September 1960, pp. 246-247.

15 The main source of new materials, if they still exist, would be the records of individual mills, particularly for the period before World War I.

16 An analysis of these four industries should provide a sufficient range of variation to permit satisfactory generalizations. I hope at some future time to publish the results of a study of the creation of an industrial labor force at the Tata Iron and Steel Company plant at Jamshedpur, 1907-1957.

17 For a brief attempt at some international comparisons, see M. D. Morris, "The Recruitment of an Industrial Labor Force in India, with British and American Comparisons/* Comparative Studies in Society and History, II, No. 3, April 1960, pp. 305-328.

CHAPTER II

Economic Development of Bombay City

There is no adequate economic history of Bombay and its hinterland. I have tried to work out enough information, based on the scanty data that are available, to lay the foundation for subsequent discussion. Consequently, I have stressed the general pattern of economic activity before 1870 and the city’s population growth.¹

During the whole of the British period Bombay was, with Calcutta, one of the two largest and most important cities in India. Bounded within the confines of a long narrow island, Bombay is separated from the mainland by a small creek. In 1864 the island-city had an area of about 18.6 square miles. Between 1860 and 1947 reclamation along its shore line added another six square miles to its area. By the time of the 1951 census Bombay was a city of 2.3 million people crowded into an area of 25.3 square miles.²

Although Bombay has the finest natural harbor in India, the island had no significance before the appearance of the British. The great sweeps of traditional Indian history completely bypassed or barely encompassed it.³ Small ships of the preindustrial era did not require deep or extensive harbors. The important factor was ease of communication with productive hinterlands and overseas markets. For the pre-eighteenth century trade of the Indian Ocean, Broach and Surat to the north of Bombay were better located. Both these entrepôts had easier land communication with the resources and markets of northern India, and both were closer to the main traditional overseas markets on the Persian Gulf and the Red Sea. By contrast, Bombay was not only cut off from effective contact with the Indo-Gangetic plain and farther away from the Persian Gulf and Red Sea ports; it was also isolated from easy communication with central India by the steep Western Ghats. Moreover, the region behind these Ghats, the Deccan Plateau, traditionally did not generate products for substantial interregional or international trade.⁴

In 1661 Bombay Island with its estimated population of 10,000, was ceded to the British by the Portugese. It was not until the early eighteenth century that the town began to grow steadily as an important East India Company entrepôt. Surat and Broach, engulfed by political difficulties, declined to insignificance whereas Bombay benefited from the generally improved circumstances of the East India Company, from the island’s militarily defensible position and the security of its harbor.⁵ The growing commercial importance of Bombay encouraged the Company to import Parsi shipbuilders from Surat and establish a shipyard in 1735. The yard prospered as a center for the construction and repair of ships in the international and country trades, and by 1781 it was employing more than 500 native workers.⁶

There is no way to determine the rate at which population grew in the eighteenth century, but we know that it expanded rapidly under the Company’s policy of toleration and progress. The records show a steady influx of weavers, goldsmiths, ironsmiths, construction workers, and traders. The evidence suggests that by 1780 the population of the island had risen to about 100,000.⁷ We also know that even at the beginning of the eighteenth century, the island, incapable of providing for itself, was dependent on the mainland for Merchandise, Timber, or Provisions, from whence only such things must come. …⁸ Thus, as population grew, an increasingly elaborate trade network with the mainland was created. This inability to sustain itself and the growing dependence on an ever-widening hinterland have been continuing characteristics of the Bombay economy.⁹

We have four estimates of population in Bombay for the period 1806 to 1814, varying between 180,000 and 236,000. It is probable that the permanent population at the end of the Napoleonic Wars was somewhere in the neighborhood of 160,000 to 180,000 people.10 Three features of the Bombay population which are matters of some significance for later discussion should be noted at this point. First was the cosmopolitan character of the population, even at this early period. By the time of Hall’s visit in 1812, the diversity of caste, religious groups, and geographical origin constituted one of the island’s striking characteristics.¹¹

A second feature was the migratory or floating portion of the natives who come and go according to the seasons and other circumstances.12 Hall estimated this migratory element to constitute nearly one-third addition to the permanent population of the time, the numbers fluctuating according to the periods of public excitement or high commercial enterprise.13 Who these people were and where they came from is uncertain. Many seem to have come from long distances, and others were agriculturists from surrounding districts who sought employment on the island during their slack periods.¹⁴

A third characteristic was the role of famines which periodically drove people from the surrounding regions and more distant parts into the city. Mackintosh estimated that some 72,000 famine victims poured into Bombay during the great famine of 1803-04.¹⁵ Captain Hall stated that the famine of 1812-13 drove 20,000 onto the island.¹⁶

This very brief discussion suggests that Bombay’s population grew from a few thousand at the beginning of the eighteenth century to more than 160,000 in the early nineteenth century. The evidence indicates a fair degree of mobility in the surrounding areas, a mobility which cannot be attributed to British land policy or to the results of British industrial competition, both of which were nineteenth-century phenomena.17 Similarly, the evidence points to the existence of seasonal labor migrations and famine additions to the Bombay population even in the period preceding British rule.18

Bengal and Madras had come under East India Company control in the mid-eighteenth century, but on the western side of the continent British power remained restricted to Bombay Island and a few outposts until the Maratha empire was finally destroyed in 1818. The period between this event and 1870 is in many ways the most interesting part of the city’s economic development. During this era the beginnings of modern transport facilities into the Western Ghat hinterland were established; international trade connections, culminating in the opening of the Suez Canal in 1869, were developed; modern commerce and banking institutions were built up; and the basis was laid for the industrialization which followed. Unfortunately, this is a period for which there is very little detailed information.

The evidence suggests a very rapid growth of population in the half century between 1814 and 1864.

TABLE I

Population of Bombay, 1814-1864

19

Although none of the pre-1864 estimates can be given great credence, there is little reason to doubt that in the early 1850’s the population was in the neighborhood of a half-million.²⁰ On the basis of the expansion of economic activity which we know was taking place on the island in the first half of the nineteenth century, such growth does not seem unreasonable .²¹ Our knowledge of the particularly vigorous growth of enterprise between 1846 and 1864 makes it equally plausible to accept the idea of continuous population expansion during this period. Whatever its specific weaknesses, the 1864 census was probably reasonably accurate in its over-all total. What, then, were the features of Bombay’s economic development which contributed to this rapid population growth?

The dissolution of the Maratha empire made possible the establishment of uninhibited British hegemony and order over almost the whole of western India. The elimination of political instability directly contributed to the expansion of commerce.²² The opening of the Bhore Ghat in 1830, the first major roadway through the Western Ghats, further stimulated trade, making possible the substitution of bullock carts for pack animals and the consequent sharp reduction in freight

TABLE II

Commodity Foreign Trade Moving Through Bombay,

1801-02 to 1870-71²³

(In millions of rupees)

charges.²⁴ At the same time, Bombay’s international commerce was stimulated, in part at least, by the East India Company charter revisions of 1813 and 1833. During this period the main imports were sugar, metals and metal manufactures, and textile products; opium and raw cotton were the dominant exports.²⁵

After 1800 Bombay became increasingly the nearest port of call for the traffic of the Indian Ocean as well as for the trade with Europe and Asia.26 And although bulk freight continued to move around the Cape of Good Hope until the opening of the Suez Canal, important maritime improvements steadily reduced the average time of shipping between Bombay and London.

The expansion of trade during the first half of the nineteenth century resulted in a multiplication of the island’s commercial facilities. The old system of agency houses was gradually replaced by joint-stock banks, the first of which was established in 1840. Insurance companies developed quickly; by 1851 there were twenty-five carrying on business in Bombay. And as early as 1836 the Bombay Chamber of Commerce was organized by a group of English and Indian merchants.27

The two decades before the outbreak of the American Civil War seem to have been particularly prosperous. The Chamber of Commerce reported that between 1841-42 and 1851-52 the import of cotton cloth had doubled in quantity and of cotton yam had trebled. During this period Bombay became the great entrepôt for the distribution of British manufactures in Asia.²⁸ And the 1850’s apparently were a period of equally impressive commercial growth. The Collector of Customs reported that during the five years to 1857-58 imports more than doubled in value; exports showed a slower but similar expansion, rising by a third during the same period.²⁹

Expansion of international trade stimulated complementary activities. There was continuous construction of port facilities, and to meet the need