¹ See Tomlinson, B. R., The Political Economy of the Raj. The Economics of Decolonization in India 1914–1947 (London, 1979), p. 131.Google Scholar

² This brief account of the politics of Indian business in 1932-36 is based on my unpublished Ph.D. dissertation, ‘Indian Business and Nationalist Politics from 1931 to 1939: The Political Attitude of the Indigenous Capitalist Class in Relation to the Crisis of the Colonial Economy and the Rise of the Congress Party’, Cambridge, 1978.Google Scholar

³ See ibid., pp. 166–71.

⁴ In February 1936, G. D. Birla held a series of talks with the Congress Parliamentary Board. He estimated the needs of the Congress for the election campaign at Rs 5 lakhs, of which he proposed to raise a large amount from the business community. See Bhulabhai Desai diary, entries for 2 and 10 February, Bhulabhai Desai Papers, Nehru Memorial Museum and Library, New Delhi (NMML).Google Scholar

⁵ Arnold, David, The Congress in Tamilnad. Nationalist Politics in South India, 1919–1937 (Delhi, 1977), p. 158.Google Scholar

⁶ This trend is noticed for the United Provinces in Pandey, G., The Ascendency of the Congress in Uttar Pradesh 1926–1934. A Study in Imperfect Mobilization (Delhi, 1978), p. 57, and in Arnold, The Congress in Tamilnad, p. 168, for Madras.Google Scholar

⁷ Pandit Pant to Rajendra Prasad, 11 May 1936, intercepted letter. Government of India, Home (Poll.), 14 May 1936, National Archives of India, New Delhi (NAI).Google Scholar

⁸ Two of the most influential figures in Bombay big business, the cotton magnates and financiers Sir Purshottamdas Thakurdas and his cousin Sir Chunilal Mehta, pointedly refused to contribute. Tomlinson, B. R., The Indian National Congress and the Raj, 1929–1942. The Penultimate Phase (London, 1976), p. 82.Google Scholar

⁹ Ibid., p. 82.

¹⁰ There was no seat reserved for commerce in the Northwest Frontier Province Assembly.Google Scholar

¹¹ Singhania defeated Bagla by 101 votes to 67. Reeves, P.et al., A Handbook to Elections in Uttar Pradesh 1920–1951 (Delhi, 1975), p. 308.Google Scholar

¹² Among them was Sir Cowasji Jehangir, a big Parsi financier and industrialist, who was elected from Bombay Central (Non-Muhammedan Urban).Google Scholar

¹³ They were Vikramjit Singh, a big Cawnpore merchant and one of the leaders of the United Provinces Chamber of Commerce, who contested on a Hindu Sabha ticket; and Lady Kailash Srivastava, Sir J.P.'s wife, who stood as independent. Reeves et al., Elections in Uttar Pradesh, p. 273.Google Scholar

¹⁴ The total number of voters grew from 7 to 36 millions. The really poor remained excluded, but there was an extension of the franchise to the urban working class and lower middle classes, and to the middle peasantry. See Tomlinson, Indian National Congress and the Raj, p. 71.Google Scholar

¹⁵ Among them A. H. Ispahani in Bengal and Ibrahim Rahimtoolla in Bombay.Google Scholar

¹⁶ Many Indian businessmen were heavily dependent upon Government orders and contracts.Google Scholar

¹⁷ Muslim businessmen, who faced increasing competition, even in their traditional fields, from Hindus, tended to close ranks in the 1930s and to support the Muslim League. Hindu businessmen on the other hand, especially those living in the Muslim-majority provinces of Bengal and the Punjab, found the Congress too soft with the Muslims, and many supported the Hindu Mahasabha.Google Scholar

¹⁸ Thus businessmen pressurized the Congress into removing from their list of candidates some trade unionists whom they found too radical. In Bombay, the trade unionist Nimbkar lost the Congress ticket because of big business pressure. See Times of India, 11 November 1936. In Bihar, Seth Dalmia obtained the removal of a man who had organized a strike in his mills from the list of Congress candidates. Tomlison, Indian National Congress and the Raj, p. 83.Google Scholar

¹⁹ In 1929–30, land revenue accounted for 33.2% of the total revenue of all provincial governments, while the second largest single item, excise, accounted for 22.2%. Tomlinson, Political Economy of the Raj, Table 4.5, p. 156.Google Scholar

²⁰ See Markovits, ‘Indian Business and Nationalist Politics’, pp. 62–3.Google Scholar

²¹ Between 1929–30 and 1934–35, the share of civil works in the total expenditure of the provincial governments fell from 10.9 to 8.6%. During the same period, industries dropped from 1 to 0.9%. Tomlinson, Political Economy of the Rai, p. 156.Google Scholar

²² Report of the Indian Financial Enquiry Committee (London,1936).Google Scholar

²³ In an interview to the Times of India, 2 May 1936, Sir Purshottamdas Thakurdas had underlined that, during five years, there would be ‘no elbow-room discernible for nation-building activities to Ministers in the provinces,’ unless they raised new taxes.Google Scholar

²⁴ Revri, C., The Indian Trade Union Movement, A Historical Outline (Delhi, 1972), pp. 204 ff.Google Scholar

²⁵ Out of thirty-eight labour seats, the Congress contested twenty and won eighteen. It won all the labour seats in Madras and the United Provinces, while in Bombay it contested and won only two of the seven reserved seats.Google Scholar

²⁶ The only exception was the Bombay Presidency, where Ambedkar's Independent Labour Party won some of the urban working-class seats.Google Scholar

²⁷ In 1937, out of 1,675,869 factory workers in India, the largest number was in Bengal, 566,458, followed by Bombay, 435,207, Madras, 186,630, and the United Provinces, 153,484. Indian Yearbook, 1938–39 (Bombay, 1939), p. 538.Google Scholar

²⁸ According to the index of variable yield securities published in Statistical Research Branch, Review of the Trade of India, 1938–39 (Calcutta, 1939), dividends paid by joint-stock companies reached a record index of 137 in March 1937 (1927–28=100).Google Scholar

²⁹ Many zamindars, besides Indian princes, held shares in Indian joint-stock companies. Some zamindars had themselves promoted sugar mills in Northern India in collaboration with merchants. Conversely, many Indian capitalists, especially in Northern and Eastern India were large-scale landholders.Google Scholar

³⁰ Such fears had been voiced in particular by Sir H. P. Mody, the spokesman of the Bombay textile industry and of the Tatas, as early as in 1935 in an interview to the Times of India, dated 14 August 1935.Google Scholar

³¹ The only exception was in Madras where Yakub Hasan, a big Muslim merchant, was given the Public Works portfolio.Google Scholar

³² Though Birla himself had sugar mills in the United Provinces.Google Scholar

³³ In a letter dated 25 May 1937 to Laithwaite, private secretary to the Viceroy, Birla expressed the hope that ‘if once the Congress realises the potentiality of constitutionalism’, it would ‘stick to it to the end’, Linlithgow Papers, India Office Library, London (IOL), Mss Eur F.125, Vol 118.Google Scholar

³⁴ See Revri, Indian Trade Union Movement, p. 222Google Scholar and Karnik, V. B., Indian Trade Unions. A Survey (Bombay, 1966), pp. 110 ff.Google Scholar

³⁵ Quoted in Dwarkadas, Kanji, Forty-five Years with Labour (Bombay, 1962), p. 50.Google Scholar

³⁶ Giri, V. V., My Life and Times (Madras,1976), Vol. I, p. 130.Google Scholar

³⁷ Computed on the basis of Table 2.Google Scholar

³⁸ Out of 387 disputes in which settlements were arrived at during the year, in 181 or 46.77%, the workers were successful in gaining concessions. In 51 or 13.18%, they were completely successful and in 130 or 33.59% only partially successful. Labour Gazette, Bombay, June 1939, p. 770.Google Scholar

³⁹ Revri, Indian Trade Union Movement, p. 220.Google Scholar

⁴⁰ The number of registered unions increased from 262 in 1937, of which 219 submitting returns had a membership of 257,308, to 420 in 1938, of which 343 submitting returns had a membership of 390, 112. ibid., p. 234.

⁴¹ Ibid.

⁴² In 1939, 51.4% of workers in the textile mills of the United Provinces and 49.2% in those of Madras were employed in British-controlled mills. Computed on the basis of Annual Statement of Mills, included in Bombay Millowners' Association. Annual Volume 1939 (Bombay, 1940).Google Scholar

⁴³ Karnik, Indian Trade Unions, p. 110.Google Scholar

⁴⁴ Resolutions of the Congress Labour Committee, Wardha, 25–26 October 1937, reproduced in Indian Annual Register, 1937, Vol. II, p. 378.Google Scholar

⁴⁵ On the labour movement in Cawnpore, see Pandey, S. M., As Labour Organizes. A Study of Unionism in the Kanpur Textile Industry (Delhi, 1970).Google Scholar

⁴⁶ In August 1937, five provincial governments, including the Punjab government but excluding Bombay, raised loans. See India Office Records (IOR), Financial collections, F/7/323, IOL.Google Scholar

⁴⁷ See Proceedings of the joint sugarcane conference convened by the Governments of the United Provinces and Bihar and held at Lucknow on September 29 and 30 1937, in Rajendra Prasad Papers, NAI, File XIII/37, Collection I, sr 106.Google Scholar

⁴⁸ This brief account of sugar policy in Bihar and the United Provinces is based on a Memorandum submitted to the National Planning Committee by the United Provinces Government Industries Department, particularly on pp. 107–8. Copy in AICC Papers, NMML, 1939 File G-14.Google Scholar

⁴⁹ See G. D. Birla, to Rajendra Prasad, 21 December 1937, Rajendra Prasad Papers, File XIII/37, Collection I, sr 127.Google Scholar

⁵⁰ See for instance Two Years of Congress Rule in Madras, published by the Madras Legislature Congress Party, undated, p. 38.Google Scholar

⁵¹ In Bombay the government set up an industrial advisory board, the role of which was never very clear, and appointed in March 1938 an Economic and Industrial Survey Committee, to review the position of small industries in the province. See Government of Bombay to Sir Purshottamdas Thakurdas, 23 March 1938, Thakurdas Papers, NMML, File 212.Google Scholar

⁵² While the Finance Minister in Bombay had predicted a deficit of Rs 10½ lakhs for the financial year 1937–38, there was a final surplus of Rs 18½ lakhs, due to the payment of Rs 27 lakhs by the Centre from the income tax. Times of India, 26 February 1938.Google Scholar

⁵³ Prohibition was first introduced in 1937 in the Salem district of the Madras Presidency on an experimental scale, then extended to other districts of the Presidency and other provinces, particularly Bombay.Google Scholar

⁵⁴ See details of provincial budgets in annual issues of the Indian Yearbook.Google Scholar

⁵⁵ In Madras the Congress ministry presented regularly surplus budgets. Ibid.

⁵⁶ In Bombay the budget presented in the Assembly for 1938-39 included supplementary expenditure of Rs 34 lakhs on education, Rs 39 lakhs on rural development and only Rs 7½ lakhs on industry. Times of India, 26 February 1938.Google Scholar

⁵⁷ The Pioneer, 13 November 1937.Google Scholar

⁵⁸ See Two years of Congress Rule in Madras, p. 33: ‘With a view to encourage the production of handloom cloth, the Madras Sale of Cloth Act was enacted and the Khadi (Name Protection) Act was extended to the Province’. Rs 2 lakhs were set apart for khadi production in each budget, and grants were given to the All-India Spinners Association.Google Scholar

⁵⁹ Thus Giri complains in his Memoirs that the Premier of Madras, Rajagopalachari, tended to favour the British ICS officers and to give them a free hand. Giri, My Life and Times, p. 118.Google Scholar

⁶⁰ For a detailed analysis of these negotiations, see Markovits, ‘Indian Business and Nationalist Politics’, pp. 191–7, and Chatterji's article in this volume.Google Scholar

⁶¹ A big Ahmedabad millowner and a close friend of Gandhi.Google Scholar

⁶² See Pandey, As Labour Organizes, pp. 54 ff.Google Scholar

⁶³ In a communiqué, the employers said that they felt ‘that they should not have been forced by government to recognize the Mazdoor Sabha as long as it remains constituted as at present’. The Pioneer, 12 August 1937.Google Scholar

⁶⁴ In The Viceroy's Journal (London, 1973), p. 102, entry for 30 November 1944, Lord Wavell writes: ‘Srivastava [then a minister in Wavell's cabinet]… today told me that after the Congress success at the polls and assumption of office in the United Provinces in 1937, the leading industrialists—all, I think, Hindu—got together and decided to finance Jinnah and the Muslim League and also the Mahasabha, as the extreme communal parties, to oppose Congress who they feared might threaten their financial profits.’Google Scholar

⁶⁵ The Pioneer, 30 November 1937.Google Scholar

⁶⁶ On 19 May 1938 Pandit Pant, receiving a workers' delegation, chided them for their lack of discipline. The Leader, 21 May 1938. But on 23 May, the United Provinces Congress Committee passed a resolution supporting the strikers and thereafter the attitude of the ministry to the strike changed. ibid., 25 May 1938. On 12 June the Government asked for the implementation of the recommendations of the report. ibid., 14 June 1938.

⁶⁷ The Leader, 29 June 1938.Google Scholar

⁶⁸ See Evidence of the Bombay Millowners' Association before the Textile Enquiry Committee, Indian Textile Journal, 15 December 1937, p. 84.Google Scholar

⁶⁹ See Textile Labour Enquiry Committee, Vol. I, Preliminary Report (Bombay, 1938).Google Scholar

⁷⁰ They were fixed at 9% in Ahmedabad, where wages were the highest in India, at 11.9% in Bombay and at 14.3% in Sholapur, the third big textile centre in the province, where wages were particularly low.Google Scholar

⁷¹ Lumley to Linlithgow, report no. 12, 15 March 1938, Linlithgow Papers, Vol. 51.Google Scholar

⁷² Indian Textile Journal, 15 March 1938, p. 192.Google Scholar

⁷³ Lumley wrote to Linlithgow: ‘My information is that the decision of the millowners was not reached without some very plain speaking by the Congress Ahmedabad millowners to the ministers. I understand that these millowners, in heated interviews, pointed out that they had supplied in the past a large part of the Congress funds and that they were now receiving in return from the Congress governments very heavy burdens to bear. They extracted from the Ministers and from Sardar Vallabhbhai Patel a promise that further legislation providing sickness benefit and old-age pensions for the workers, the cost of which would be mainly borne by the millowners, should not be put into operation for at least a year.’ Report no 12, 15 March 1938, Linlithgow Papers, Vol. 51.Google Scholar

⁷⁴ Lumley to Linlithgow, ibid.

⁷⁵ For a detailed account, see Markovits, ‘Indian Business and Nationalist Politics’, pp. 191–7.Google Scholar

⁷⁶ In 1936 many Bombay capitalists had condemned his socialist views, and though in the following period he had become more moderate, he was nevertheless still suspect in the eyes of many businessmen.Google Scholar

⁷⁷ M. C. Ghia, Vice-President of the Indian Merchants Chamber in a speech at a function in Bombay in honour of B. G. Kher, Times of India, 26 July 1937.Google Scholar

⁷⁸ Times of India, 8 March 1937.Google Scholar

⁷⁹ Indian Textile Journal, 15 March 1938, p. 200, ‘The State and Industries’.Google Scholar

⁸⁰ Business groups which invested in the Indian States in 1937–39 included: Singhania (in Bhopal), Srivastava (in Rampur), Tata (in Baroda), Sassoon (in Travancore). This list is not exhaustive.Google Scholar

⁸¹ Bombay Chronicle, 29 March 1938.Google Scholar

⁸² Quoted in Revri, Indian Trade Union Movement, p. 232.Google Scholar

⁸³ Patel wrote to Kher in a letter dated 9 July 1938: ‘the trade-union people have already begun to howl at you for employing men at government expense to organize labour unions rival to the trade-unions organized by non-officials’. Kher Papers, NMML, File 6.Google Scholar

⁸⁴ Copy enclosed in Giri to Kripalani, 14 July 1938, AICC Papers, NMML, File PL 3(I), 1937.Google Scholar

⁸⁵ Dwarkadas, Forty-five Years with Labour, p. 79.Google Scholar

⁸⁶ Lumley to Linlithgow, Report dated 15 September 1938, Linlithgow Papers, Vol. 51.Google Scholar

⁸⁷ Bombay Legislative Assembly debates, 2 September 1938, quoted in Indian Annual Register, 1938, Vol. II, p. 149.Google Scholar

⁸⁸ ibid., 4 September 1938, ibid., p. 157.

⁸⁹ For a detailed analysis of the main provisions of the bill, see Revri, Indian Trade Union Movement, p. 226 ff.Google Scholar

⁹⁰ ‘Confidential note on Bombay Trade Disputes Act,’ 14 December 1938, Nehru Papers, NMML, File 150.Google Scholar

⁹¹ Times of India, 6 November 1938.Google Scholar

⁹² Lumley to Linlithgow, report dated 15 November 1938, Linlithgow papers, Vol. 51.Google Scholar

⁹³ The police opened fire upon demonstrators in different places in town, resulting in several dead and many injured. Times of India, 8 November 1938.Google Scholar

⁹⁴ The government had to agree to the setting up of a committee to enquire into the disturbances.Google Scholar

⁹⁵ Lumley wrote to Linlithgow in his report dated 15 September 1938 that the millowners feared that the ‘cumbrous machinery’ set up by the Act would make it difficult for them to introduce changes in their way of operating their factories. Linlithgow Papers, Vol. 51.Google Scholar

⁹⁶ See Karnik, Indian Trade Unions, pp. 114–15.Google Scholar

⁹⁷ In July 1939, the relations between the provincial trade union Congress and the provincial government reached the breaking-point, following a letter sent by the government to the Mazdoor Sabha, in which they had objected strongly to the preaching of class hatred by trade unions. The Leader, 14 July 1939.Google Scholar

⁹⁸ The Leader, 8 December 1938.Google Scholar

⁹⁹ In 1939, there were 406 disputes, involving 409,075 workers and resulting in the loss of 4,992,795 man-days. Revri, Indian Trade Union Movement, p. 260.Google Scholar

¹⁰⁰ Membership of registered trade unions showed little change between 1938 and 1939. ibid., p. 234.

¹⁰¹ Dwarkadas, Forty-five Years with Labour, p. 56.Google Scholar

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¹⁰³ Patel to Kher, 1 July 1939, Kher Papers, File 6.Google Scholar

¹⁰⁴ AICC to Alembic Chemical Works, 4 February 1939, AICC Papers, File G-72, 1938.Google Scholar

¹⁰⁵ In a letter to Kher, dated 3 August 1939, Patel urged the Chief Minister to refuse the license to the British firm of Killick Nixon which already held the license for Ahmedabad. Kher Papers, File 6. Yet such interventions directed specifically against British firms were very rare.Google Scholar

¹⁰⁶ In a letter to Kher dated 5 July 1939, Manu Subedar, of the Indian Merchants' Chamber, protested against the stand of the Bombay government in giving its guarantee to the capital sunk in ‘one or more industrial venture’. Kher Papers, File 6.Google Scholar

¹⁰⁷ C. M. Kothari, a Gujerati businessman of Madras, wrote to his friend Thakurdas in a letter dated 17 March 1938: ‘there was a regular tussle in the Cabinet meeting to give the lease [of Trichinopoly] to Narayandas Girdhardas [a Madras businessman] and not to C. P. company [part of the Associated Cement Companies combine] and everyone of the ministers was in favour of giving the same to him, except Rajaji and Dr. Subborayan. In that meeting Rajaji read a letter from Vallabhbhai mentioning amongst other things that the lease may be given to C. P. Cement Co. as the company has necessary capital.’ Thakurdas Papers, File 206.Google Scholar

¹⁰⁸ The Madras ministry was the only one to show a reluctance to collaborate. Giri, My Life and Times, p. 161.Google Scholar

¹⁰⁹ There is a detailed account of the conference in Indian Annual Register, 1938, Vol. II, pp. 288–292.Google Scholar

¹¹⁰ Markovits, ‘Indian Business and Nationalist Politics’, p. 197.Google Scholar

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¹¹² See the correspondence between Thakurdas, one of the unofficial advisers and Iyengar, Secretary to the Government of Bombay, FinanceDepartment, in August 1938. In a letter dated 18 August Thakurdas wrote: ‘if the textile industry is to make the sacrifice indicated in the proposals [of the Board of Trade] under piece goods and prints, obviously they will not be able to stand any more burden which provincial governments in India may have in mind to put on them’. Copy in Kher Papers, II, File 3. In a letter dated 25 August, Iyengar replied that it was impossible for the ministers to commit themselves in advance on the final outcome of the labour enquiry committee and that they considered ‘that the terms of the Indo-British pact must be judged on the basis of the facts as they are today’. Copy enclosed in Irwin, Secretary to the Governor of Bombay, to Puckle, Secretary to the Viceroy, Linlithgow Papers, Vol. 52.Google Scholar

¹¹³ United Provinces Legislative Assembly debates, 13 March 1939, quoted in Indian Annual Register, 1939, Vol. I, p. 220. The budget presented for 1939–40 made for a deficit of Rs 38 lakhs, of which Rs 30 lakhs were to be covered by the employments tax.Google Scholar

¹¹⁴ Lumley to Linlithgow, 26 December 1938, Linlithgow Papers, Vol. 52.Google Scholar

¹¹⁵ The Leader, 19 April 1939.Google Scholar

¹¹⁶ Memorandum submitted by the Upper India Chamber of Commerce, the United Provinces Chamber of Commerce, the Merchants' Chamber of the United Provinces, the Indian Sugar Producers' Association, the Employers' Association of Northern India, the Cawnpore Sugar Merchants' Association, the Cawnpore Sugar Brokers' Association. The Leader, 20 April 1939.Google Scholar

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¹¹⁸ In a speech in the Madras Legislative Assembly on 16 March 1939, quoted in Indian Annual Register, 1939, Vol. I, p. 182. On this occasion Rajagopalachari castigated merchants and traders for their refusal ‘to pay even one pie out of one rupee’.Google Scholar

¹¹⁹ Vakil, C. N. in Times of India, 21 February 1939.Google Scholar

¹²⁰ An added factor was that many property-holders were Muslims, which gave the agitation a communal turn.Google Scholar

¹²¹ Rao, V. K. R. V., in Bombay Chronicle, 21 02 1939.Google Scholar

¹²² In 1938–39, sales of Japanese piecegoods showed an increase of 40% over the figures for the previous year. Computed on the basis of data in Bagchi, A. K., Private Investment in India, 1900–1939 (Cambridge, 1972), p. 238.CrossRefGoogle Scholar

¹²³ ‘Indian Textile Industry in the Doldrums’, Indian Textile Journal, 15 06 1939, p. 392.Google Scholar

¹²⁴ In an interview to the Times of India, 3 04 1939, he complained that the provincial governments were ‘out to crush’ the cotton textile industry.Google Scholar

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¹²⁷ Indian Textile Journal, 15 06 1939 p. 392.Google Scholar

¹²⁸ ibid., 15 August 1939, p. 431.

¹²⁹ Gulzarilal Nanda to Bombay Provincial Congress Committee, quoted in Indian Textile Journal, 15 08 1939, p. 430.Google Scholar

¹³⁰ ibid., p. 431. One wing in the Ahmedabad Millowners' Association led by Kasturbhai Lalbhai agreed with Patel's proposal to hold discussions with the unions, while another section, headed by Sakarlal Balabhai, advocated unilateral measures.

¹³¹ Patel to Kher, 17 September 1939, Kher Papers, File 6.Google Scholar

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¹³³ See A. R. Dalal's call to the Bihar government to intervene to restore peace in Jamshedpur. The Leader, 14 August 1939.Google Scholar

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¹³⁵ Ray, Rajat, Industrialization in India, 1914-1947, Growth and Conflict in the Private Corporate Sector (Delhi, 1979), p. 70.Google Scholar

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¹³⁷ See Evidence of Bombay Millowners' Association before Bombay Economic and Industrial Survey Committee, 35 th meeting, 7 August 1939, in Thakurdas Papers, File 212.Google Scholar

¹³⁸ See Copley, A. H. R., The Political Career of Rajagopalachari, 1937-1954. A Moralist in Politics (Delhi, 1978), for an analysis of Rajaji's views.Google Scholar

¹³⁹ See the speech of the Chairman of the Bombay Chamber of Commerce, MacIntosh, A., in Bombay Chamber of Commerce, Annual Volume 1938 (Bombay, 1939), p. XXVII.Google Scholar