Mills in Bombay

In the previous blog we saw that the city got its shape by the 1850s. Trade started flourishing in different sectors. People from different communities started migrating because of trade. A working-class of people started migrating for jobs. This action resulted-in increase in population. But to see the trade of cotton mills we have to take a detour to the west.

Its beautiful bolls,

And bales of rich value, the Master controls.

Of “mud-stills” he prates, and would haughtily bring

The world to acknowledge that “Cotton is king”

– The gospel of Slavery, by “Iron Gray,” (Abel C. Thomas) 1864.


In the 1830s and 1840s, there was a common phrase for the growth of the American economy was “cotton is King”. It is important to understand that cotton was one of the world’s first luxury commodities, after sugar and tobacco.

Cotton was very profitable and was interconnected with the economies of cotton plantation and the Northern banking industry, New England textile factories and a huge proportion of the economy of Great Britain overlapped. 

a r street

Traditionally, it was assumed that the slump in the cotton industry was the simple result of a shortage of raw cotton created by the blockade of the southern ports during the civil war. As a result, the depression came to be called the “cotton famine”. However, recent academic research questions this interpretation, believing that the depression in the cotton industry was inevitable since the boom of the late 1850s had created an over-capacity which was unsustainable. 


The position of many producers was aggravated by the growing substitution of inferior Indian cotton for American cotton from 1862, which led to soaring production costs. Since markets were quiet, price rises were often inadequate to compensate for spiraling production costs, and profit margins were eroded. For those marginal firms with few reserves and little opportunity to reduce costs, the future was bleak, particularly for many of the more isolated country mills. Being some distance from the commercial centers of Liverpool and Manchester, they already operated with inflated costs. These circumstances sounded their death knell.

mount mary stairs

Yarn and cloth prices in the cotton trade as a whole began to fall after the American Civil War – more a reaction to the inflated levels of the war years than to the freeing up of supplies or the opening up of markets. Had the downwards movement halted at a certain price, there would have been few problems. It continued, however, almost uninterrupted for the next three decades, part of a world decline in prices. This downward spiral inevitably reduced already stretched profit margins, discouraging investment and expansion – especially in coarse production, which suffered most. 

sassoon dock

The prosperity of the cotton industry had depended heavily upon exports for much of the 19th century, yet it was in foreign markets that the performance of the cotton industry was most disappointing. Yarn exports actually fell and cloth exports, which had been growing 8.3% per annum between 1820 – 60, grew by a mere 1.4% per annum between 1870 – 1910. Britain’s cloth manufacturers were for the first time facing foreign competition. The impact on demand was exacerbated by the effect of the world decline in prices, which reduced the import capabilities of many of Britain’s customers.


Competition first came from The United States and some European countries, where cotton industries which had been developed from the 1830s grew rapidly. Initially, the threat was minimal and Lancashire retained its comparative advantage in cotton production, her merchants simply tapping new markets e.g. India, the Far East, South America, and the Levant

ma haji ali

Before the middle of the 19th century, India used to export cotton to Britain, and then reimport the textile. In 1820 the total textile import cost only Rs. 350,000. However, these costs escalated tremendously until in 1860 textile imports stood at Rs. 19.3 million.

The impetus towards the founding of a cotton industry came from Indian entrepreneurs. The first Indian cotton mill, “The Bombay Spinning Mill”, was opened in 1854 in Bombay by Cowasji Nanabhai Davar. Opposition from the Lancashire mill owners was eventually offset by the support of the British manufacturers of textile machinery.

By 1870 there were 13 mills in Bombay. Cotton exports grew during the American Civil War when supplies from the USA were interrupted. At the end of 1895 there were 70 mills; growing to 83 in 1915. A period of stagnation set in during the recession of the 1920s. In 1925 there were 81 mills in the city. After World War II, under strong competition from Japan, the mills declined. In 1953 there remained only 53 mills in the city.

horniman circle

The growth of the cotton industry was spurred, and for a small time eclipsed, by the cotton boom. Before the American Civil War, the mills of England imported only 20% of their cotton from India. With the blockade of the Confederate ports, Indian cotton prices rose. By 1865, when General Lee’s army surrendered, Bombay had earned 70 million pounds sterling in the cotton trade.

This money spurred on a financial bubble, with land reclamation schemes and the dockyards attracting huge investments. By January 1865 Bombay had 31 banks, 8 reclamation companies, 16 cotton pressing companies, 10 shipping companies, 20 insurance companies and 62 joint-stock companies. Within two months the American Civil War ended and most of these companies went into liquidation. Large numbers of speculators became bankrupt. However, wealth had been created and this led immediately to an industrial growth.

haji ali

The rapid growth in mills was sustained by a large migration of mainly Marathi speaking workers into the city. Most often, the male member of the family would work in Bombay, leaving the rest of the family in the village. These workers were initially accommodated in hostels. Eventually, these chawls became tenements, with full families crammed into single rooms. The mills filled up Parel and then expanded westwards all the way to Worli.

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