A Book Review of Three Merchants of Bombay

The book provides immense insight into how three merchants from Bombay—Arjunji Nathji Trawadi, Jamsetjee Jeejeebhoy, and Premchand Roychand—faced challenges in business, took risks, and applied business strategies to become successful. The stories of these merchants illuminate their business practices and prosperity. The book also offers valuable data and information about various events in India's past, particularly related to politics and business.

    First, let us dive into the tidbits of history. Charles II, King of England, received Bombay as dowry upon his marriage to the Portuguese princess, Catharine de Braganza, in June 1661. The island city rose after the decline of the city of Surat because it offered a competitive advantage in governance. Bombay provided the classical conditions of peace, security, and the rule of law, maintaining these far better than its competitors. Consequently, baniyas from commercial centers all over Western India began to migrate to Bombay. Soon, Bombay made room for Parsi ships and dock builders, legendary Gujarati men of trade like Jain Shroffs, Marwari bankers, Konkani Muslim traders, Baghdadi Jews, and European free traders. As a result, the city acquired its uniquely cosmopolitan character. The relatively smaller presence of the British official community made it less hierarchical and less racist than Calcutta. The baniyas also brought with them their traditional institutions and networks, which proved useful when brokering the cotton business between the fields in Southern Gujarat, Kathiawar, and the port of Bombay. Bombay became part of a global trading network in the late eighteenth and early nineteenth centuries.

    The Parsis were also among the first to respond to the call to settle in Bombay. From the early nineteenth century, the island city began to attract migrants from other parts of Western India, notably from Surat. Great Britain was a major purchaser of Chinese tea, and for a time, Britain used silver to pay China for tea, which created a serious balance-of-payments problem. Later, Britain began to trade cotton and opium from India to China, thus solving this problem.

    Arjunji Nathji Trawadi, a Nagar Brahmin, hailed from a family with ancestral connections to Banaras, where they had been trusted bankers to local rajas. With the arrival of Banaras cottons and silks, the family shifted its focus to the export of textiles and set up agencies at the port of Surat. Arjunji Nathji first elevated the family name as a financier of international trade and then as a partner to the Company.

    The colonial economy was expected to provide raw materials to the imperial economy. Growing pressure from free traders in England and private traders in India, who were mainly ex-servants of the Company, fueled two tendencies: one, the growing private trade by ex-servants of the Company, investing in cotton, textiles, opium, etc., and another, the free traders from England, who were primarily active in agency houses and investing in export commodities for the global market. Both developments were tied to the financing requirements of the Company, which relied on private traders and bills to fund its trade to Britain.

    India became a dependent economy, needing to import vast amounts of manufactured goods from Britain. European agency houses' support was invaluable to the Company. In western India, these houses closely worked with Indian partners, including Parsi merchants. The Parsi community worked closely with Europeans and was notably considered a business community in Bombay. Their leading figure in the nineteenth century was Jamsetjee Jeejeebhoy, who entered into a partnership with Jardine Matheson, head of one of Canton's most powerful mercantile houses. The Parsi community expanded its base as shippers and consignment merchants, while the Banias, Gujaratis, and Marwaris succeeded as financiers and merchants of opium, cotton, grains, and oilseeds. They did not suffer much after the decline of the opium trade; thanks to their experience, they succeeded in the trades of cotton, grains, and oilseeds. Bombay provided an opportunity for Premchand Roychand to have an extraordinary career. Lured by the prospects of profit, Bombay became home to the Gujarati baniyas.

Arjunji Nathji Trawadi

The East India Company used to refer to Arjunji Nathji as the "Honourable Company's Shroff" From his base in Surat, he oversaw the growth of credit and remittance operations in Western India, where all local powers sought financial services from the bankers. He also benefited from the rising influence of the Company in Western India, where, after an initial period of slow operations, it became a major player in the cotton and opium trade with China, while also articulating its political aspirations with incisive clarity.

    The Surat banker, Arjunji Nathji Trawadi, made an early impression on the servants and officials of the East India Company as a key figure in the commercial world of Western India during the second half of the eighteenth century. His early career was shaped by local trade in Banaras, where he engaged in commerce and banking, as well as caste-related functions. He earned a reputation as both a philanthropist and a merchant magnate. A Nagar Brahmin from Surat, his family had ancestral connections to Banaras. His name occasionally appears in early Company records; in 1740, he was referred to as a respectable merchant requested to act as an arbiter in a business dispute. Three years later, he was identified as the Company's Shroff in Surat, which meant he handled the Company's local financial dealings, ensured deliveries of export consignments, and even mediated disputes with local merchants or rival companies. His family was known for its integrity and enterprise in business.

    It is likely that the Trawadi family firm also benefited from the growth of Maratha political power and patronage in Banaras, enabling it to participate in the city's cotton and silk trade with Western India. In fact, the banker was substantively involved in the silk trade between Bengal and Surat. As was customary, the family maintained agencies in Gujarat, which generated substantial profits. In Surat, Trawadi's firm engaged in the city's extensive overseas trade, dealing with merchants from West Asia and Arabs. After the decline of Mughal power in the early eighteenth century, merchants sought protection from the Company, which appeared to be the most reliable source.

    Trawadi’s ability to negotiate with Mughal authorities on behalf of the Company was remarkable. Although he stood firmly with the Company, he also dealt with other local powers, like the Marathas. He was involved in the region’s silk trade with Banaras as well as in the textile and cotton trade in Western India. He extended credit to local powers, including the Muslim administration, Maratha revenue officials in Surat, and the Company. He would regularly visit local revenue offices and the Company's factory to stay informed about developments. Arjunji also financed the Company's wars, ensuring regular financial supplies to the government and army. The Company eventually realized that, despite efforts to work with smaller bankers, they could not meet their financial requirements without support from larger financiers like Arjunji.

    Arjunji was well aware of his strong position as a senior shroff who controlled the Pan-Indian credit network. He alone had the staying power to support the Company's growing demand for bills, which gave him access to a range of ancillary business activities and enormous local power and influence.

Jamsetjee Jeejeebhoy

Jamsetjee Jeejeebhoy, born in Bombay in 1783 and who died on April 14, 1859, was an exemplary embodiment of Indo-European partnership. He rose to become one of the city's greatest merchants, philanthropists, and public figures. Bombay was recognized as a city of the future by Company officials, who made efforts to develop its infrastructure. The establishment of a naval police to safeguard the seas from piracy and local coastal chiefs ensured that merchants saw the benefits of trading through Bombay. Local merchant societies from Gujarat and Konkan accepted the Company’s protection, while maintaining ties with other protection networks. Parsis, skilled in artisanship, entered businesses like shipbuilding, respondentia, and marine insurance, often in partnership with European merchants.

    From the 1770s, Parsis had already entered the China trade. By the 1780s, Indian merchants had immense opportunities, as the British imported tea from China and exported opium and cotton from India. Raw cotton initially catapulted Western India into global trade, but it was opium that truly made Bombay’s fortune and those of its notable commercial men. Jamsetjee’s marriage to Awabi Framjee enabled him to enter the China trade, and he partnered with his father-in-law, Framjee Pestonjee, who was a small but significant player in this trade.

    Jamsetjee’s business strategies were remarkable. He maintained a diverse portfolio, which included shipping, export trade, and remittance business. He expanded his network of contacts in both the marketing and supply chain sides. From 1805 to 1817, Jamsetjee invested wisely in developing a fleet of ships, which he later used for transporting opium. By 1820, he had already built a huge fortune, estimated at Rs. 2 Crores, and had invested heavily in properties in Bombay.

    Jamsetjee was also a noted philanthropist. In 1822, his first public act of charity came when he paid Rs. 3000 to release several debtors from Bombay jails. His philanthropy extended beyond his community to include hospitals, schools, and urban improvements. His most well-known foundations were the Jamsetjee Jeejeebhoy Hospital and the Jamsetjee Jeejeebhoy School of Arts.

Premchand Roychand: A Man for All Seasons

The American Civil War in the 1860s, caused by President Abraham Lincoln's abolition of slavery, abruptly cut off the supply of cotton from the southern United States to Lancashire mills. During this time, Gujarati cotton merchant Premchand Roychand seized the opportunity, as cotton prices skyrocketed. He encouraged Gujarat's cotton farmers to grow the variety needed by English mills. Within months, Indian cotton replaced American cotton, bringing vast amounts of capital to Bombay.

    Premchand Roychand came from a Surati family of Oswal Jains, traditionally involved in brokerage, banking, and retail trade. His ability to mobilize and deploy connections explains why the Indian business and banking communities, especially the Banias in Gujarat, survived regime changes and expanded operations. By the late eighteenth century, substantial sections of Gujarat’s Bania population had migrated to Bombay, where they used the city’s new institutions to their advantage.

    Premchand’s father, Deepchand Roychand, a mid-level timber merchant with connections to Bombay's Parsi traders, brought his family to Bombay in the 1840s. Deepchand quickly identified promising business lines for Premchand, including the cotton agency system, guarantee brokerage, and banking. By the 1850s and 1860s, trade and banking activity in Bombay exploded, driven by the demand for cotton in China, England, and the home market. Premchand built a strong network of associations, including directors of the Bank of Bombay, and became a trusted broker.

    Premchand was also committed to the dissemination of education and the welfare of the destitute. His extensive donations to universities and schools reflect his enduring concern for education among Indians. He also contributed to the development of the Asiatic Society and sponsored important scholarly work on heritage and architecture.

Conclusion

The three merchants—Arjunji Nathji Trawadi, Jamsetjee Jeejeebhoy, and Premchand Roychand—were able to keep pace with changing times and contributed immensely to Bombay's growth. This book is an excellent source of information and insights for those involved in the world of business.

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