The impact of an insolvency law on cosmopolitan life
The baleful institution of the debtors’ prison, immortalised by Dickens in Little Dorrit, did not touch India until the turn of the 19th century. Whether during the heyday of the Maratha Confederacy or the regime of Tipu Sultan, debt repayment in Indian society often involved the influence of caste elders where moral pressure helped resolve many a vexing money matter.
When confinement of debtors in prisons finally evolved into a practice in Bombay, a number of reasons, not least the fact that borrowing and lending on trust played so large a part in everyday Indian life, checked this institution from metamorphosing into a tyranny.
Having half the city’s population behind bars was certainly not to the interest of the colonial government. Early insolvency legislation manifested in the Acts of 1828 and 1848 and most notably, Act XXVIII of 1865, were designed to provide succour to debtors.
Leading economic historian Ayesha Siddiqi explores Bombay between 1860 and 1898 through the prism of its insolvents. She has meticulously trawled records in the Bombay High Court, drawing on nearly 20,000 petitions to produce a revealing treatise. She asserts that while the insolvency law did provide relief to innumerable debtors, it made the people subservient to the Raj by forging ties of dependence between commoners and the State.
The watershed of Indian (and Bombay’s) insolvency in the colonial period was the mid-1860s, when the conclusion of the American Civil War (1861-65) busted the fortunes of the early tsars of Indian capital erected on the edifice of cotton speculation.
She charts not only the social milieu of the city’s financial patricians Jamshedji Tata, Kahandas Narandas and Premchund Roychand, the legendary Jain broker, but most importantly plebeian men and women, who were not untouched by the crisis.
The beginning of the American Civil War triggered the ‘Lancashire Cotton Famine’ or ‘Cotton Panic’, which cut off the source of England’s raw material in America’s southern states, compelling Lancashire to turn to India which in turn led to a massive boom in cotton exports from Bombay. The war’s denouement ended this honeymoon. But, eminent insolvents like Roychand and the Tatas weathered the crisis as it quickly became evident that their failure would plunge Bombay into a financial crisis.
But the most revealing bits deal with insolvent women, of whom dancing girls constituted the largest occupational group of the 650-odd petitions studied. Siddiqi etches the divisions in the class of courtesans and their cultural range, noting that conversion to Islam may have been a path to achieving respectability.
In linking these stories, Prof. Siddiqi paints a remarkable portrait of Bombay at its most cosmopolitan where class solidarities were fast supplanting the ties of caste, village and religion.
Bombay’s People 1860-98: Insolvents in the City; Asiya Siddiqi, Oxford University Press, ₹750.