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HARDBOUND

Bombay boy
An extract from Lakshmi Subramanian's Three Merchants of Bombay

The difficulties that bedeviled Jamsetjee’s business were largely connected to the changes in the structure of the China trade following the end of the Company’s monopoly over it in 1834. This happened to coincide with major shifts in shipping technology that began to displace sail with steam and which gave Europeans an even more decisive advantage. It is in this context that historians have concluded that Jamsetjee despite his extraordinary success was unable to fully subvert the asymmetry that the colonial power introduced in the business scenario.

Once the Company’s monopoly on the China trade was abolished, a critical channel in his business network — the agent in need of funds and bills — dried up. Bills on the Company were also becoming less readily available; to get around this Jamsetjee resorted to several expedients. On the one hand he urged his agents at Canton to send ingots of Chinese silver in payments; on the other he began exporting Chinese tea and silk on his firm to residents in Calcutta and Bombay which could be discounted by his agents in London against the funds received from the firm of Jardine Matheson. He also tried to reroute his fund from China to India via Britain by importing British goods — textiles, iron bars and copper — into India. None of these proved satisfactory especially as the end of the market, whose influence in the interlocking arrangements was ever greater thanks to the larger credit reserves they operated with.

Even as the astute businessman was juggling his options, changes in maritime technology presented a fresh set of difficulties in the realm of shipping, a sector that had catapulted him into the world of global trade in the first place. Steam ships began to enter the scene around 1840 and Jamsetjee’s country craft proved to be no match for these new vessels whose considerably lower running expenses gave them enormous competitive advantages. For instance he was amazed to find that free traders could sail their ships to England at a much lower cost; three or four pounds sterling per ton while he could barely sail his own for less than seven or even nine pounds sterling. At the same time he found ships becoming difficult to maintain.

The competition that small ships faced was not easy to contend with. He complained that people were not coming forward to give them freight. His son met with the same difficulties and while persisting with his father’s business confessed that the presence of free traders and Yankees had made it impossible for them to compete.

With a serious crisis brewing Jamsetjee decided to cut short his losses by selling his ships. Jamsetjee on his part would appear to have given up his interests in shipping. He then concentrated his efforts on trading on his account, on lending to shippers and on investments in insurance, railway companies and joint stock banks.

What is striking about his business activities is the ease with which he stepped into the modern domain of business, very much like the house of Tagores in Calcutta, but with the important difference that he was able to deflect commercial crises better than his Bengali counterparts. He invested in real estate, bought valuable properties, maintained an active public life and showed an extraordinary commitment to the notion of public good.

Here it would appear that his own humble beginnings had convinced him about the need for looking after the lesser endowed and for giving the less privileged a leg-up.

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