12 AUGUST 1865, Page 5


THE day of judgment for three years expected in Bombay has arrived at last, and the Western Presidency presents a scene such as has never been witnessed in Asia, and hardly in Europe since Law's plan for making the currency equal to the wants of the community, overdriven by an ignorant Regent and a greedy aristocracy, impoverished instead of 'enriching France. The result has been a revelation of national as well as individual character. If there was one charge brought against European merchants in India more frequently than another it was that of recklessness, of a disposition to overtrading, a craving to become rich in an hour by some dar- ing speculation, rather than wait the slow but certain accumu- lation of legitimate profit. The Parsees, on the other hand, were said to be "men of sense," bold but prudent traders, merchants who when anxious to engage in vast affairs increased the area of their entire commerce rather than their risk in any one of its many branches. Their millionaires did sot, it was said, make "strokes" in sugar, or cotton, or indigo, a money-lending, but quietly planted affiliated houses in overy commercial centre, and drew to themselves the profits tie half a dozen commercial firms while only incurring the tbks of one. As to the Hindoo firms, they were caution embodied, made fortunes out of sixpences, shrunk from speculations which to their European rivals seemed cer- tain, and would scarcely deal in shares unless upon secret infortnation as to the amount of the next dividend. At hist this community so singularly constituted, these " reck- less " Europeans, and " shrewd " Parsees, and " timid " Hindoos, were called upon to face the greatest trial of mercan- tile character—a sudden and tremendous rush of prosperity praduced by temporary and political causes, and we see how they have borne it. The reckless Europeans, with all their &tin, never ventured to defy that original principle of trade, ex stalk nailfit, and have as a body emerged from the storm com- paratively unscathed. A house or two here and there has gone down, a bank or two has overtraded, a firm or two has been compelled to fall back upon the empty exchequer with which it originally began, but the body have survived, and of all who trade in Bombay the Scotch alone have as a class been gainers by the "marvellous prosperity" of the island. They have carried five millions sterling out of the grand scramble. The " shrewd " Parsees have been utterly carried away by their imaginations, have dealt in shares at which no sane man would look, poured millions into the laps of com- panies based on air, trusted men in transactions of the first magnitude to whom before the prosperity came they would nothavelent a shilling. They seem litemllyto havebelieved that the rise was produced by some law of nature, and wehavo before us the accounts of a financial company in which the native directors have gravely inserted the profits on time bargains not yet near maturity as assets. The timid Hindoos have ventured their all and their neighbours' all besides in single stakes, one man, for example, confessing that the turn of the market changed him from a millionaire into a defaulter to the extent of seven hundred thousand pounds. One Hindoo Bank which has failed was three hundred years old, and was trusted by native depositors in the interior more than the Bank of Bom- bay, which with unlimited liability has Government for a shareholder. The natives indeed of all classes, usually so coldly careful, seem to have believed that the laws of nature were suspended, that there was no limit to the possible increase of values. In scores of instances they have made written con- tracts to deliver or accept cotton or shares six months in ad- vance, and it is asserted on all hands that the fall extent of the catastrophe will not be known till Michaelmas, immense bargains remaining till then undecided. They are not, more- over, penniless men who have been thus struck down. Fur- doonjee, who has "gone," though he will pay a good dividend, was before the crash owner of more than a million and a quarter. Pestonjee Carsetjee would, had engagements due

to him been met, have been worth 450,000/., while as it is his creditors will barely obtain a dividend of five shillings in the pound. Merwanjee Nusserwanjee Bhowruggree had actually made a great profit upon his shipments and other business, but lost 250,0001. in one settlement for time bargains. The Camas were merchant princes, must at one time have been able to retire with more than two millions sterling. It is declared on good authority that of the entire native community, but six months ago so rich that it seemed as if society had been overturned, and that great officials would have to crave meals at the hands of merchants, only six firms have escaped absolutely solvent. These six, among whom may be reckoned the Jeejeebhoy connection, either owned land which they sold at enormous rates, or realized in time, or in one instance avoided so far as possible profits and ruin alike.

The truth seems to be that the shrewd Parsee and timid Hindoo are more accessible to one particular temptation than almost any European, and that is gambling on a gigantic scale. Hindoos have been known to bind themselves to virtual slavery for an hour's enjoyment of a game, the most respectable merchants will bet frantically on a parrot fight, and there is hardly a man in the bazaars either of Calcutta or Bombay who has not at one time or another done a time bargain in opium, a contract which is far nearer simple gaming than a similar one on the Stock Exchange, because the judgment has so much less scope to play. A man may calculate on a vote of the Greek Legislature or the policy of a new Finance Minister at Madrid, but nothing can enable him to guess the price to which chests of opium will at a particular sale be artifically run up. No one who had ever seen the scene in the opium auction-room of Calcutta, the great hall filled with wealthy men, jumping, screaming, foaming with excitement and ridicule or rage, ever doubted that the Hindoo could on occasion lose his senses in the delirium of gambling, and to all natives the last three years of Bombay life seem to have been passed in one vast game. They could see the fluctua- tions of the market, but not their causes, perceive the rise in. shares, but not its limits. Their fortunes were at the mercy during three years of three separate series of events—the variations in their own crop, the turns of the American war, and the fluctuations of a misinformed publics opinion in Liverpool. Of these three they understood only one, and that the least important, and regarded the action of the other two rather as that of a capricious providence than of any law known to commerce. " Things " rose, and therefore would always rise, and " shrewd " and " timid " traders brought out thirty-five grand speculations in thirty days, ran shares up to fourteen and fifteen hundred per cent. premium, pledged their whole fortunes, including great landed estates, to obtain fresh stakes,—one man is pointed out as singular because he had not mortgaged his pat- rimonial lands,—and when the ruin came in too many instances tried to repudiate obligations. The local papers are choked with reports of meetings at which every question asked suggests a swindle, and men's hands can hardly be kept from each others' throats, and it is gravely reported, as a mere incident of the time, that on settling day no claim was allowed not capable of being legally enforced. That is to say, the dealers repudiated all time bargains not drawn up in writing and in the form of specific contracts. The general settlement, moreover, was not expected to average more than seven annas in the rupee, say nine shillings in the pound, while those who claim and those who pay alike demand consideration on the ground of their utter insolvency. The Bank of Bombay is of course safe, though a heavy loser, Government having at once interfered on its behalf, but other associations are being wound up in heaps, with accounts which, did they not imply such ruin, would be food for endless laughter. One company, for example, is wound up with accounts showing a profit of 350,000/. because judgment has been obtained against it for 50,000/., and it "has no funds," profit, capital, and all being apparently represented by time bargains. The total amount thus lost to its former owners is estimated at sixteen million sterling, the whole of which has been transferred to a few exceedingly powerful houses which realized in time. Of course all the Companies, "financials," and other money-deal- ing associations formed to speculate in these shares must disappear, and the only craft which seems to come out of the tempest with any portion of its cargo safe is the Back Bay Reclamation scheme. The cool heads at the top of this concern had at the very height of the share fever sold 400 of their shares by auction for 1,060,000/., and placed this amount safely away as a reserve fund. This will in the end secure the original shareholders an excellent dividend, and the directors, undismayed by all the ruin around, are calmly going on with their scheme of rescuing land from the shallow water. Other land companies may, and probably will, survive, but for the rest Bombay is insolvent, and we have before us a long petition, signed it is said by great names, praying Government to pass a law to relieve the over- burdened Insolvent Court, and allow mercantile assignees to exercise its powers subject only to a general control. Anglo-Indians, who are nearly as sanguine as Americans, and almost as careless of a poverty which in India loses half its painful features—nobody, for instance, dreaming of cutting you because you have lost your money—argue that Bombay will now recover rapidly, that the cash profit of three years has been from twenty to thirty millions, and that "some- body must have got that money." That is true, but we fear their hopes are nevertheless over sanguine. The money they speak of was not the whole capital of the island, but an addition' to it, and the old capital as well as the new has been swallowed up by the few successful or surviving firms. They are not likely to risk it, the new wealth will accumulate very slowly, and for years to come Bombay will be in the position of Calcutta, a city with a vast trade and great profits, but so little realized capital that the most insignificant crisis shakes credit to its foundations. Expenses, too, will not fall back at once to their old level, servants, tradesmen, and even cultiva- tors fighting bitterly against a return to the old rates, while the dealers, forced again to accumulate sixpences where they had been making lakhs, feel as habitual gamblers do when low stakes are proposed—they cannot forego the game, but it is very insipid work. The city must of course recover, for it is the warehouse of half a continent, the bank for thirty millions of industrious people, the exchange for three great trades, and it cannot long continue a city of insolvents. But it can con- tinue a city of feeble speculators and over cautious traders, of merchants afraid to make a three months' contract and bankers who will scarcely look at a security not negotiable within the next half hour. When a French merchant or banker is asked to join in any undertaking, his first question is the time at which he may expect returns, and if it is more than three months he shakes his head, and asks the proposer if "he has forgotten '48." That will, we are convinced, be for years the position of affairs in Bombay, and it involves an amount of loss as well as of individual misery which we should be glad to see somewhat more gravely appreciated on the spot. By Christmas it will perhaps be realized, but at present Bombay seems to feel a sense of relief from the fact that all are alike ruined, and is still squandering money under the conviction that in a ruin so mighty a few rupees or lakhs of rupees can make no difference whatever.