The document discusses the history and development of Bombay (now Mumbai) as a major trading center. It details how the city emerged as an important port city under Portuguese and British rule in the late 17th/18th centuries. By the mid-19th century, Bombay saw significant economic and educational growth, driven mainly by the cotton trade and infrastructure developments like railways. However, the American Civil War led to a speculative boom and bust cycle that caused economic turmoil in Bombay by 1865. The city was later able to recover through greater government involvement and a shift to manufacturing.

1. Bombay as a trading centre
A look into the history of Mumbai

2. The changing Bombay

3. The origins of Bombay
• King Bhimdev established his kingdom in the region in the late 13th century,
and brought many settlers to the islands.
• he Muslim rulers of Gujarat captured the islands in 1348, and they were
later governed by the Gujarat Sultanate from 1391 to 1534.
• The Treaty of Bassein between the Portuguese viceroy Nuno da Cunha and
Bahadur Shah of the Gujarat Sultanate placed the islands into Portuguese
possession in 1534.
• Charles II of England received possession of the islands in 1661 as part of
the dowry of Catherine of Braganza, daughter of King John IV of Portugal,
and leased them to the British East India Company in 1668.
• The islands were invaded by the Mughals towards the end of the 17th
century.
• During the mid-18th century, the city emerged as an important trading town,
with maritime trade contacts with Mecca and Basra.
• Economic and educational development characterised the city during the
19th century with the first-ever Indian railway line beginning operations
between Bombay and neighbouring Thane in 1853.

4. Development of Bombay - I
• The educational and economic progress of the city began with the
East India Company's military successes in the Deccan. The
Wellington Pier (Apollo Bunder) in the north of Colaba was opened
for passenger traffic in 1819 and the Elphinstone High School was
established in 1822.
• The construction of the new mint commenced in 1825.
• With the construction of a good carriage road up the Bhor Ghat
during the regimes of Mountstuart Elphinstone and Sir John
Malcolm gave better access of the Bombay Island to the Deccan.
• This Ghat, which was opened on 10 November 1830, facilitated
trade in a large measure. By 1830, regular communication with
England started by steamers navigating the Red and Mediterranean
Sea.
• The Asiatic Society of Bombay (Town Hall) was completed in 1833,
and the Elphinstone College was built in 1835.[117] In 1836, the
Chamber of Commerce was established.

5. Development of Bombay - II
• In 1838, the islands of Colaba and Little Colaba wrre connected to Bombay
by the Colaba Causeway. In the same year, monthly communication was
established between Bombay and London.
• The Bank of Bombay, the oldest bank in the city, was established in 1840,
and the Bank of Western India in 1842.
• The Cotton Exchange was established in Cotton Green in 1844.
• Avabai Jamsetjee Jeejeebhoy funded the construction of the Mahim
Causeway, to connect Mahim to Bandra and the work was completed in
1845.
• The Bombay Spinning and Weaving Company was the first cotton mill to be
established in the city on 7 July 1854 at Tardeo in Central Bombay.
• The Bombay, Baroda, and Central India Railway (BB&CI) was incorporated
in 1855.
• The Commercial Bank, the Chartered Mercantile, the Agra and United
Service, the Chartered and the Central Bank of Western India were
established in Bombay attracting a considerable industrial population.

6. Development of Bombay - III
• The outbreak of the American Civil War in 1861 increased the demand for cotton in
the West, and led to an enormous increase in cotton-trade.
• The Bombay Shipping and Iron Shipping Companies were started in 1863 to make
Bombay merchants independent of the
• English.
• The Bombay Coast and River Steam Navigation Company was established in 1866
for the maintenance of steam ferries between Bombay and the nearby islands; while
the opening of the Suez Canal in 1869 revolutionized the marine trade of Bombay
• The Bombay Port Trust was promulgated in 1870 for the development and
administration of the port
• The Bombay Electric Supply and Transport (BEST), originally set up as a tramway
company:
• The Bombay Stock Exchange, the oldest stock exchange in Asia, was established in
1875.
• Bombay Time, one of the two official time zones in British India, was established in
1884 during the International Meridian Conference held at Washington, D.C in the
United States
• The Princess Dock was built in 1885 as part of a scheme for improving the whole
foreshore of the Bombay harbour.

7. Key trading activities
• Cotton
• Opium
• Internal trade – related with the above
• Banking to facilitate trade
• Shipping

8. Cotton trade
• Huge opportunity provided by the
American Civil War
– Manchester, the centre of manufacturing
cotton in England, starved of cotton due to the
lack of supply from the US
– Huge demand, at inflated prices, of cotton
from India
• Collapse of this trade when the Civil War
ended in the US

9. Land reclamation
• The huge expansion of the cotton trade
created huge demand for infrastructure to
handle
• This directly led to the following:
– Accelerated reclamation of land – to connect
railway lines to the port areas
– Floatation of land companies for these
purposes

10. The role of the Govt of India
• Early efforts at land reclamation concentrated on
the small creeks crossing the islands. Several of
these were dammed or filled in during the
eighteenth century.
• Dalhousie’s policies
– A department of public works was established in each
presidency, and engineering colleges were provided.
– An imperial system of telegraphs followed.
– Dalhousie encouraged private enterprise to develop
railways in India for the good of the people and also to
reduce absolute dependence on the government.

11. The Govt & land reclamation
• The Govt of the Bombay Presidency
wished to create the land links between
the newly created railway systems and
also the port and warehousing areas
• It was also important to introduce ‘cotton
presses’ in the warehousing areas –
unpressed cotton took a lot of space and
attracted higher duty by space than
pressed cotton

12. The Bombay Bubble
• In the late 1850s and early 1860s, many
companies created in Bombay
– Banks
– Financial Associations
– Land & Reclamation companies
• Directors of many such companies indulged in
speculation in the shares
– At one time, the premia on such shares were up to
96%!
– Most of the speculation was done on ‘time bargains’

13. The bubble bursts
• The American Civil War ends
– US cotton once again available to the
manufacturers in Manchester
• The demand for Indian cotton dropped
very sharply
• When the ‘time bargains’ were due for
delivery, most speculators were caught
short

14. July 1, 1865
• The market collapsed
• Some of the biggest banks and
commercial houses were bankrupt
• Individuals became insolvent
Shades of 1991/2!

15. The resurgence of Bombay
• The private land companies working on the
foreshores were bought out
• The Bombay Port Trust was created
• More stringent financial controls were created
• Bombay Stock Exchange created
• Manufacturing replaced trading as the biggest
driver of economic prosperity – 82 cotton mills
and engineering concerns
• Bombay grew to be one of the largest financial
centres in Asia