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A CASE STUDY on SYLHET TEA PLANTATION Ashfaque Hossain*

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A CASE STUDY on SYLHET TEA PLANTATION Ashfaque Hossain* Journal of the Asiatic Society of Bangladesh (Hum.), Vol. 62(1), 2017, pp. 15-46 CHANGING FACE OF GLOBAL AND LOCAL ENTREPRENEURSHIP: A CASE STUDY ON SYLHET TEA PLANTATION Ashfaque Hossain* Abstract This article examines the expansion of tea plantations in Sylhet– what is today north- eastern Bangladesh. It looks at how big firms and agency houses gradually took over from the individual planters. In particular, it will produce evidence to explain how James Finlay dominated the plantation sector in Sylhet. It also explores how European firms involved in the development of tea plantation and how native entrepreneurs were linked to the tea capitalism and global tea trade. Although, the early phase saw only a small indigenous participation in investment in tea, it was nonetheless significant. The desire to become entrepreneurs along with a certain ‘anti-colonial’ feeling was the driving forces that inspired local elites to offer the land and capital. While the native lawyers offered ideas and legal expertise. In late 1920s, the indigenous companies owned 10 percent of tea lands and there were cooperation among the Hindu-Muslim elites and they demonstrated an ability to work together. When tension grew between these elites in the 1930s and 1940s, the potential of a full-blown indigenous entrepreneurship was destroyed. The ‘Great Divide of 1947’ dislodged the Hindu planters from Sylhet. And after 1947, the situation changed as West Pakistan created an ‘Urdu speaking’ monopoly in the Sylhet tea plantation. Tea plantation in Bangladesh is now mostly owned and managed by local entrepreneurs and professionals. Key words Tea, Sylhet plantation, Planter, James Finlay, Joint Stock Company, Entrepreneurs. Introduction In the late nineteenth century, the opening of Sylhet for tea plantation and its annexation to Assam – the newly emerged ‘Planters Raj’ – was a new phenomenon. In this new venture European firms had deeply been involved in the development of tea plantation and native entrepreneurs were also partly linked to the global tea trade. In the Sylhet region, the formation of the Cachar Native Joint Stock Company, by local elites was the first native venture in the tea sector in South Asia.The historical transformation in Sylhet needs to be reconstructed through studies of global and local entrepreneurship in tea. The growing tea plantations in this region attracted many European firms, and James Finlay played a crucial role in the success of the tea plantations in Sylhet. In the early period overseas firms possessed scientific * Professor, Department of History, University of Dhaka 16 Ashfaque Hossain knowledge and they invested huge capital in a favourable setting. Thus, the process of ‘globalization’ began to take shape as the flow of capital and technological know- how were used by the Europeans for making tea commercially viable across the globe. In the 1880s, this Scottish firm was involved in jute, cotton and shipping and had soon emerged as a global representative of capitalist investment in Sylhet. A small group of indigenous elites was involved in the opening of Sylhet for capitalist investment as a result of nineteenth century globalization. There was a process of technology transfer and management practices that had been adopted by the local elites and a western-educated middle class. In course of time, the European planters and companies faced new competitors, but the local planters did not stand in their way, depending on them for technological know-how.1 The agrarian roots of capitalism that related to the local Hindu and Muslim elite entrepreneurs in the tea business will also be investigated. The ‘Great Divide’ of 1947 and the subsequent dislocation of the Hindu elites, paved the way for the dominance of Urdu speaking elites of West Pakistan. This article explores some specific issues in the light of the evidence available for one plantation enclave, Sylhet. It goes on to examine the interaction of the Europeans and local entrepreneurs following the dominance of overseas planters through power, technology and skill. The native entrepreneurs gradually became involved in the development of the plantations economy and engaged them with the global economy through commercial contacts.The historical transformation of Sylhet needs to be reconstructed from the bottom up, through studies of overseas and local entrepreneurship in tea. What emerges is a picture considerably more complex than one might first imagine. ‘Hegemony’ in Sylhet plantations appears to be contested between overseas and local people, between Hindu and Muslim and in the Pakistani era between Urdu and Bengali speaking Muslims. Investment in Sylhet tea estates in the early phase Tea as an investment, particularly in Assam and Sylhet, appeared quite lucrative in the 1870s. A correspondent using the name Mr. Hybrid in his letter to the editor of 1 According to data from 1984, Tea estates in Bangladesh were owned and managed by ‘Bangladeshi Companies’, ‘Sterling Companies’ and ‘Proprietorship concern’. The term ‘Bangladeshi Companies’ refers to the companies formed and registered in the country under the Companies Act, 1913 and earlier Acts. ‘Sterling Companies’ are foreign companies, mainly originating in the United Kingdom and multinational in nature. The average size of the tea estate of the Sterling Companies was 1648 acres; that of Bangladeshi Companies 669 acres, while that of ‘Proprietorship concern’ 343 acres. Bangladeshiyo Cha Sangsad, Annual Report, (Srimongal, 1984), pp. 3-10. Changing Face of Global and Local Entrepreneurship 17 the Calcutta Statesman argued that in the 1870s tea was almost thriving business. He pointed out: It seems to me ...tea to be a most unspeculative investment, and that the steady and gradual increase in value of the shares has simply kept pace with the dividends annually declared. For instance, the average dividend declared in 1872 naturally regulated the price of the shares in 1873, and I find that the 1872 dividend was 5.493 per cent.2 Mr. Hybrid projected a comparative picture of the European investment in India in various fields during the 1870s. He pointed out, Looking at the several returns upon English capital invested in this country (India), this is not a very out-of-the way average, and it is a pleasing contrast to the fabulous prices given for shares in 1862-63-64; while it certainly seems to indicate that the tea industry has at last taken its place among the quiet, non-speculative, safe investments of the country (Emphasis added).3 During the early stages, in the 1860s, tea estates in Sylhet were established and owned by individual planters, almost all of whom were Europeans. The early period was known as ‘tea mania’ because many ‘white’ people thought that it might be seen as a California ‘Gold Rush’ in the Indian context. It was widely believed that anybody could run a tea garden, including retired military officers, medical men, engineers, veterinary surgeons, steamer captains, chemists, shopkeepers of all kinds, even policemen and clerks. As a result of over-enthusiasm, the price paid for the garden was frequently much higher than the actual value. In this atmosphere fraudulent transactions were common. Citing Colonel Money H.A. Antrobus has pointed out that when speculation did start, it ran riot. Often in those days a small garden of 30 to 40 acres was sold to a new company as 150 to 200 acres.4 Sir Percival Griffiths argues that it was reckless speculation and insane attempts to extend cultivation that led to the crisis.5 There was a crash in the tea sector in Sylhet and Assam in the 1860s. However, this crisis was short-lived and the plantations became firmly established as a commercial venture by the 1870s. By the beginning of the 1880s, tea plantations 2 H. Cottam, Tea Cultivation in Assam: Being a Series of Letters Republished from the ‘Ceylon Observer’, (Colombo, 1877) p. 75. Mr. Hybrid wrote a letter to the editor of the Calcutta’s Statesman under the heading ‘Colonel Money and Tea’. Lieutenant Colonel Edward Money was one of the pioneer planters who later wrote a book under the heading Tea Cultivation in 1883. 3 Cottam, Tea Cultivation in Assam, p. 75. 4 H. A. Antrobus, A History of the Assam Company 1939-1953, (Edinburgh, 1957), p. 144. 5 Sir Percival Griffiths, The History of the Indian Tea Industry (London, 1967), p. 101. 18 Ashfaque Hossain entered into the second stage when individual efforts had been replaced by the companies and agency houses. Another important event during this period was the floating of the first Joint Stock Company by Bengalis in the Surma (Sylhet) valley in 1876, under the name of the Cachar Native Joint Stock Company. It was the first 6 native concern in tea plantations, not only in Assam but also in Bengal. D. H. Buchanan’s study of capitalist enterprises in India during the British period suggests that the tea industry had successfully gathered British capital from the United Kingdom, available between 1880 and 1910.7 But a later study carried out by A. K. Bagchi argues that largest portion of the capital had been extracted (drawn) from the Indian colony.8 There may be a debate about the amount of capital accumulated from the metropolis as opposed to the colony. But, there is hardly any doubt that the moving force behind the expansion of plantations was the sustained capital flow from London, Calcutta and even locally available sources and that this radically changed the niches of North-eastern India.9 Several sources indicate that the amateur and over-ambitious planters soon went bankrupt and lost their property to the Land Mortgage Bank of India. In Sylhet, James Finlay and Co. purchased a number of tea estates from this bank.10 The dominance of James Finlay in Sylhet From the late nineteenth century James Finlay was best known across the mercantile world for the production of tea.
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