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THE TROPICAL AGRICULTURIST. 



[October i, 1884. 



THE JUTE TRADE OF CALCUTTA. 



Calcutta, 23rd August. — At the present moment when 

 the value of the shares in all our Jute Mill Companies 

 has been so seriously depreciated, a few words ou the 

 jute manufacturing industry in India may not be out of 

 place. 



Few of our readers are, we imagine, aware of the 

 amouut of capital invested and the number of persons 

 interested in jute mills here. Many of them have been 

 erected quietly, and most of them have beeu increased or 

 added to from time to time, so that at the beginning of 

 this year there were 20 jute mills at work, containing 

 just 0,000 looms, while during the present year some 1,000 

 additional looms must have been set up, all adding to 

 the production and tending to keep down the price of 

 the manufactured article. Now the cost of a jute mill, 

 if we may judge from the published accounts, varies from 

 It4,500 to over R6,000 per loom, so that if we take the 

 mills all round as averaging in cost 5,000 per loom, it 

 follows that the capital invested in these undertak- 

 ings cannot be less than 3J crores of rupees. We are 

 inclined to believe that when all the extensions now in 

 contemplation are completed, the invested capital will be 

 nearer five than four crores of rupees. The number of 

 persons engaged in a jute mill works is nearly 10 per 

 running loom, so that we may take it that at the pre- 

 sent moment some 70,000 hands are engaged in these mills, 

 quite independently of .the number who are indirectly 

 supported thereby. The jute manufacturing industry in 

 India seems to work in cycles of alternate depression and 

 extreme prosperity. Up to the year 1S74 the manufacture 

 was almost a close borough here ; there were, not above 

 six mills at work, with a total number of certainly not 

 more than 1,500 looms, and the trade was 'conducted with 

 very great profit to all concerned. The year 1873, how- 

 ever, saw a very great impetus given to the erection of 

 jute mills, and in that year and 1874 at least 10 new con- 

 cerns were floated. With the commencement of 1875 came 

 the first great crisis in this industry — the supply overtook 

 the demand, prices for the manufactured article receded, 

 the large profits of former years dwindled down in many 

 instances to losses, and shares in Jute Mill Companies 

 went to a serious discount. This state of things continued, 

 with some little fluctuations, until about the middle of 

 1880, and during the interval several concerns had a un- 

 commonly bad time. The Balliaghatta, Rustomjee, Cal- 

 cutta, and Oriental Companies, with a combined capital 

 of some 44 lakhs of rupees, succumbed, and have been 

 liquidated, the return to the shareholders having been in- 

 finitesimal ; while shares in nearly every other company 

 went to a serious discount, varying from 10 to 85 per 

 cent. The pressure on the mills became at last so serious 

 that they were compelled to seek foreign markets, and 

 Australia, New Zealand, South Africa, California, and Val- 

 paraiso were successfully invaded, and after a hard strug- 

 gle wrested from Dundee. Indeed the depression in trade 

 became so great that in 1878-79 and the early part of 

 1880 large quantities of gunny bags were shipped from 

 Calcutta to the United Kingdon and the mills here met 

 the Dundee spinners upon what had hitherto beeu con- 

 sidered peculiarly the tatter's ground. 



In 1880 an impetus was given to the gunny bag trade 

 by Mr. PlimsoU'a Bill, while the largely increased ship- 

 ments of grains and oilseeds from India within the last 

 few years have caused a greater demand for bags ; so 

 that the year 1881, 1882, 1883 have proved very profit- 

 able ones to jute manufacturers both in Bengal and Dundee. 

 Unfortunately this improvement in trade was at once seized 

 upon by many of the managing agents — who saw therein 

 a considerable increase to their emoluments — as an excuse 

 for considerable extensions; while one or two .mercantile 

 firms, with a handsome commission in prospective, issued 

 circulars to confiding investors, wherein were depicted in 

 the most glowing terms the large profits to be made in 

 the jute manufacturing industry. The result might have 

 beeu anticipated. On the 1st January 1881 some 4,600 

 looms only were at work in India ; but three mills, which 

 were then silent, are now at full work, and additions 

 have been made to, other concerns, so that on the 1st Janu- 

 ary 18S4 the number of looms at work amounted to 6,000, 

 while some 2,200 more looms were under construction, of 

 which we expect some 1,000 are now at work. In other 

 words, the manufacturing capacity has been increased fully 



50 per (cent during the last three years, and there are 

 further extensions in progress, so that the question to be 

 seriously considered is, what is to become of the out turn 

 of the mills ? 



The years 18S2 and 1883 were rendered more profit- 

 able than usual to the localmills by reason of the extremely 

 large crops of jute in 1881 and 1882. Prices of gunny 

 bags were most moderate while the mills were enabled 

 to make a very handsome profit on the manufacture ; 

 in fact, everything worked to put money iuto the 

 pockets of these wno brought their jute and sold their 

 bags with judgment. There is no doubt that the 

 gunny bag trade is an expanding one, but there are 

 reasonable limits to everything, and signs are not want- 

 ing to show that at present the supply has overtaken 

 the demand. Thus in 1879, 68 million bags were ex- 

 ported by sea from Calcutta, and 67 millions in 1880. 

 In 1881 the number rose tu 74 millions ; in 18S2 to 

 81| millions, and iu 1883 to nearly 91 millions. But 

 the exports for the first half of this year are only 4 

 per cent above those ot last year ; aud it is noteworthy 

 that the increase iu one year over the other has al- 

 most invariably taken place during the first six months 

 of the year. It is evident that the increase in produc- 

 tion this year will be considerably more than 4 per 

 cent. Again enormous numbers of bags are required for 

 the ordinary export trade of the country ; for the 

 three months, April to June 1884, th« exports of grain 

 and oil seeds were some 295,000 tons less than for the 

 corresponding period of 1883. This means that nearly 

 eight million gunny bags were not required this year, 

 which were used in 1883. At the present moment the 

 Calcutta share market, so far as regards jute mill 

 scrip, is completely demoralized, and the depreciation 

 of this particular kind of stock has been something 

 terrible. The cau?es of this reaction may be shortly 

 stated as dear jute, dear money, aud over speculation by 

 weak holders. 



But though the jute manufacturing industry is at pre- 

 sent depressed, and though the immediate prospect of 

 dividends is unlikely, there is no class of industry in 

 which we have a more thorough belief, or which stands 

 on a firmer basis. It must not be forgotten that hitherto 

 Bengal is the only place from which jute can be ob- 

 tained, and that therefore to place the seat of the manu- 

 facture here was to secure for it advantages which no 

 other country could afford. 



It is extremely satisfactory to observe that the sec- 

 ond half of this year has opened well, and that the 

 exports of gunny bags during July are greater than 

 have bteu kuown before ; and if this only continues, 

 1884 will show as large an increase over 1883, as that 

 year has over 1882. The extreme cheapness of gunny 

 hags has caused a strong demand for them iu the straits, 

 and if they can only succeed in ousting the mat bag at 

 present in vogue iu Siam aud China, there will be a 

 grand outlet for our bags: but it must not be forgotten 

 that this unexpected demand has been caused by the 

 usually low prices obtaining for the manufactured article, 

 and that had it not been fur this sudden spurt at the 

 Straits, our export figures would have looked very different. 

 It is noteworthy that, in consequence of the low price 

 of jute last year, though the number of bags exported 

 was fully 17 per cent more than in 1882, their value 

 was almost the same, and it evidences the severe character 

 of the present depression, that with jute this year at a 

 considerably higher range of prices, the value of bags 

 has not at all increased. At the present moment well- 

 managed mills, with no large stock of dearly bought 

 jute, should be able to work at a small profit, and the 

 extreme depression in some of our jute milk shares 

 would hardly seem to be warranted. The. future of the 

 jute manufacturing industry here is largely bound up in 

 the question of railways. Extend the railway system and 

 you increase the export of agricultural produce and ex 

 necessitate rei the demand for gunny bags. There seems 

 now to be every probability of a great impetus being 

 given to the construction of railways ; this is the best 

 news that the mills have had for some time. Investors 

 in the stocks of well-managed mills at present prices 

 may have to play a waiting game, but the ultimate 

 results should more than compensate them for their for- 

 bearance. 



