National Maritime Day: How Walchand Hirachand Pioneered Indian Shipping Against British Hegemony

On 5 April 1919, an Indian owned ship — the SS Loyalty — sailed from Mumbai for London.

Many years later, in 1964, the day would be commemorated as India’s National Maritime Day. This year marks its sixtieth anniversary.

What was so special about the SS Loyalty? Surely, there had been other shipping companies started by Indians under British rule, which had set ships afloat?

Indeed, there had been — over a hundred of them, including a venture by Jamshedji Tata. But all of them had folded under the pressure of unfair business practices and an unresponsive government which cared little for private enterprise by Indians (unless of course they saw a direct benefit for themselves). 

Walchand Hirachand had managed to buck the trend and kept his shipping company — Scindia Steam Navigation Co — afloat all throughout the British era.

Indians had been sailing ships across the Indian Ocean for many hundred years. Even after the advent of the Europeans, Indian traders and sailors managed to hold their own.

The introduction of the steam ship and the almost simultaneous opening of the Suez Canal had a profound effect on the shipping industry and India. No longer were ships subject to the vagaries of the monsoon winds. Their schedules could be fixed with pinpoint accuracy and cargoes decided months in advance.

When the almost instantaneous communication afforded by the telegraph was added to this, ships became extensions of their shore offices. The modern shipping company was born and its face has inherently remained the same. Now schedules are calculated down to the hour and minute.

With India being under British rule, her seaborne trade — whether coastal or foreign bound was in the hands of British companies. Hundred per cent of the foreign trade and 98 per cent of her coastal trade was carried in British or European ships to precise.

It was this monopoly that Indian entrepreneurs tried — unsuccessfully — to break. Almost simultaneous to the opening of the Suez Canal appeared to more practices, both of which were instrumental in keeping Indian shipping down.

One was the formation of shipping rings. A more familiar word would be ‘cartel’. These were groups formed by European shipping companies for a particular trade.

Say the India-Japan trade. Sailings would be fixed, earnings and freight would be fixed and in general the entire trade would be linked to this shipping ring. It was difficult, if not impossible to break into these shipping rings and refusing cargo on one ship could earn the shipper the ire of the entire group.

With the shipping ring came the deferred rebate. A debatable form of discount which kept shippers tied to a particular shipping company. This was a 10 per cent discount offered on freight, paid with a full six-month delay over the year’s transactions. If any cargo was shipped by a different company, this rebate was lost.

Both the shipping ring and deferred rebate were instrumental in keeping Indian companies tied down.

Perhaps the example of Jamshedji Tata is best to explain the state of affairs.

Textile, or rather the production of cotton yarn was big business in nineteenth century India, and the Tatas had established their Swadeshi Mills. A major drawback though, was that the shipping of this yarn to Europe or anywhere else was entirely in the hands of British and other European companies.

It meant Jamshedji Tata was at the mercy of freight rates quoted by them, which combined with the fact these companies operated in a cartel-like fashion — were always exorbitant. Jamshedji Tata believed the best way forward was to have his own shipping company.

In 1893, he sailed to Tokyo where the broad outlines of partnership with the Japanese shipping company — NYK — were sealed. Soon after, he chartered two ships and NYK provided two more. The Tata-NYK venture began carrying cotton yarn from Mumbai to Kobe.

Jamshedji’s pricing for cotton yarn (for other mill owners) was Rs 12/tonne, as opposed to Rs 18/tonne of the dominant P&O Lines. Unfazed, the P&O dropped their rates to Rs 1.5/tonne. They also carried some cotton for free.

Generous subsidies granted by the British government in India allowed them to carry out such loss-making activities. Subsidies amounting to around Rs 6 lakh annually.

This was followed by warning shippers that their cargoes would not be carried by the European shipping ring if they dared to do business with Tata. Most mill owners turned away from the Tata-NYK endeavour as a result. There were also reports planted in newspapers discrediting the ships run by Tata or calling them unfit to carry cotton cargoes.

Jamshedji Tata had sunk Rs 1 lakh into the venture, but faced with a horde of unscrupulous business practices, was forced to bow out. Almost immediately, the freight rates were hiked from Rs 1.5/tonne to Rs 16/tonne by the dominant shipping ring.

An exasperated Jamshedji Tata wrote to the then Secretary of State for India:

“With scores of ships, Indian and foreign, plying in these waters which our petted and much glorified Anglo Indian Company can afford and perhaps find it good policy to tolerate, it is only jealous of a small enterprise like ours. And while it can lovingly take foreigners and possible future enemies of England to its bosom, it discards the poor Indian for whose benefit it professes to have come to India and from whose pocket it draws the greater part of it’s subsidy.”

It's interesting how the episode panned out in Japan — and showed how political freedom was important for economic decisions too. Japan — under the Meiji government followed a policy of granting subsidies to private shipping companies that almost mirrored the subsidies that the British government granted their shipping companies.

As a result, NYK was not only able to stay afloat — but eventually got included in the Bombay shipping ring. Today, it continues to be one of the most well-known of shipping companies.

Another notable attempt was the Swadeshi Steam Navigation Company launched by V O C Pillai merely a decade later. A staunch nationalist who considered Lokmanya Tilak to be his guru.

V O Chidambaram Pillai wanted to challenge the monopoly that the British India Steam Navigation Company (BISN) had on the Colombo-Tuticorin route. A staunch nationalist, he called his venture Swadeshi Steam Navigation Company and adopted the ‘Indian Flag’ unfurled by Madam Cama not long before.

It was 1906, and India was in the midst of its Swadeshi movement — it was thus only fitting that a company named Swadeshi with “Vande Mataram” plastered across it’s flag — sailed. VOC Pillai purchased a few steamers and began services.

As usual, that’s when the problems began. First came the indifferent attitude of local British officials towards the new venture. Various hurdles were put in place just so that the new company finds it difficult to operate.

The BISN immediately dropped rates to throw away prices. Perhaps most incredulous was the opening of a postage firm called “Swadeshi Tapal & Co” by the BISN close to the Swadeshi Steam Navigation Office. It helped confuse would be passengers.

Still, V O C Pillai managed to run his company, till one day the British government managed to snare him in the Tirunaveli riots case. V O C Pillai was charged with making seditious speeches that led to the riots.

An exceptionally harsh sentence was given to him — six years of rigorous imprisonment at the Coimbatore jail. Everyone could see that not only was a freedom fighter being sentenced, but that the Swadeshi Movement was also being targeted. Aurobindo Ghosh wrote of the trial: 

“The official campaign against the Swadeshi Steam Navigation Company is now drawing to a head. The case against the Tuticorin lawyer is an almost undisguised attempt to ruin the Company by making it practically illegal to farther its interests. All India is looking on with interest to see the end of this campaign. If it succeeds (in favour of the British concerns), we shall know that the peaceful development of Swadeshi is impossible under British rule. Srijut Chidambaram Pillai has shown throughout the Tuticorin affair a loftiness of character, a practical energy united with high moral idealism which show he is a true nationalist” 

The years at Coimbatore included working the oil press and the treadmill under the hot sun of southern India. By the time he was released, the Swadeshi Steam Navigation Company had wound up.

“The Swadeshi Steam Navigation Company crashed on the rocks of politics, not business.”

This then was the backdrop in which Walchand Hirachand purchased the SS Loyalty. Jamshedji Tata and V O C Pillai are two famous examples, but the same story of predatory pricing, cartels and indifferent, and in fact hostile, attitudes from the colonial government could be told many times over.

That the Scindia Steam Navigation Company was able to tackle this quagmire and stay afloat till well beyond India’s independence is what makes it stand out. And is also the reason why National Maritime Day is celebrated on 5 April. 

Walchand Hirachand Doshi had humble beginnings in Solapur, but managed to successfully build a business as a railway contractor — the Reay Road-Kurla section of the Harbour Line and some of the tunnels on the Mumbai-Pune railway line.

Walchand Hirachand’s entry into shipping was purely by chance. It was 1919, and the world was recovering from the First World War. There was a boom in shipping as trade was being restored to and surpassing pre-war levels.

Walchand happened to find out during a casual conversation on board a Delhi-Mumbai train that a ship named SS Loyalty was up for sale in Mumbai. Originally owned by the Scindias of Gwalior, it had been outfitted as a hospital ship for the war.

Now the Maharaja had put it up for sale for 25 lakh. On 16 February 1919, Walchand Hirachand saw the SS Loyalty and the decision to purchase it was made. But where was Rs 25 lakh going to come from? So, he roped in Narottam Morarjee, Lalubhai Samaldas and Kilchand Devachand to support the venture. They were renowned textile and rice magnates of Mumbai.

A month later, the Scindia Steam Navigation Company was floated — for Rs 4.5 crore, the largest public offering at the time. It even surpassed Tata Steel’s and was oversubscribed.

A few days later, on 5 April — the SS Loyalty set sail for London. It’s flag too was unique — a red Swastik on a white circle imposed on a navy blue background. Like the ‘Vande Matram’ flag of V O C Pillai, it espoused Indian ethos. 

The sailing to London via Port Said (Suez Canal) and Marseilles was smooth and the ship docked at Tilbury near London without much hassle. A voyage, which would later turn out to be rather historic, had been completed. Now remained the question of outfitting the hospital ship into a proper cargo-cum-passenger vessel and sailing her back to India.

And that’s where the problems began. British yards were not the most welcoming place for an Indian venture. The few that agreed, charged exorbitant costs and would require a lot of time.

From an initial calculation of 10,000 pounds and a few months — Walchand Hirachand’s company ended up shelling out four times the amount and stayed in London for eight months.

Then there was Lord Inchcape — a hard-nosed businessman who owned the British India Steam Navigation Company, a firm which dominated the Indian trade. He saw to it that shippers would not entertain the SS Loyalty.

It became difficult to find passengers too. So, Walchand Hirachand and Narottam Morarjee opened their own booking office and overnight became agents for booking passengers. Out of the company’s pockets they purchased some cargo of pig iron. The ship managed to sail back to India. More of such out-of-the-box thinking would be required in the not-too-distant future.

The post-war boom soon ended, and Walchand decided to turn his attention to the Bengal-Burma rice trade. Burma (Myanmar) at the time traded heavily in timber and rice. To begin with, Scindia Steam Navigation tried to tender for a Rs 2 lakh contract to carry coal between Bengal and Burma — much to their chagrin this contract was arbitrarily handed over to a British company for 10 years without the bids being made public.

Scindia Steam decided to enter the rice trade. Two Indian traders — Seth Dharmsey and Abdul Karim Jamal — agreed to fill Scindia ships with rice cargo. A repeat of the Tata story ensued.

The dominant British India Steam Navigation Company (BI) slashed rates from Rs 18/tonne to Rs 6. Merchants were threatened against shipping with Scindia. With the exception of Abdul Karim Jamal, most bowed out owing to the intense financial pressure.

Walchand and Narottam Morarjee decided to work around this problem by opening their own trading company — Narottam Ltd which purchased rice in Burma and sold it in India. But the BI’s tactics were not done yet. A ship cannot operate by itself when in port. It needs shore labour (known as Stevedores) to help load and unload cargo. It needs to refuel, or take bunkers for its future voyages.

Thus companies which provided Stevedoring and Bunkering services have their own importance in a port.  Suffice to say, it would be quite impossible for a ship to operate without them. These small companies too were arm-twisted into not helping Scindia Steam successfully run their venture.

Port authorities were also pressured into delaying the berthing of Scindia vessels. Scindia Steam Navigation began operating their own bunkering firm — Eastern Bunkerers Ltd. Walchand Hirachand managed to stay afloat, albeit barely.

The next two years (1921–1922) were spent in cultivating political leaders from the Indian National Congress and building a successful PR campaign in the press. Shipping began to be spoken about in the legislature with one committee being adopted to explore the possibility of raising an Indian Mercantile Marine.

While most suggestions were summarily rejected by the British government, the establishment of the Training Ship Dufferin (1927) was a direct result of this committee.

Lord Inchcape recognised that the Scindia Steam Navigation Company was no pushover. So, he decided to buy out their company, with a generous offer. He quoted Rs 25 per share, four times their share price. A thousand rupees a month was promised for ten years to the directors — a tidy sum at a time when Rs 300 was a good salary.  

Narottam Morarjee called a meeting of his shareholders to debate the issue. He asked shareholders at the meeting: “Whether you should look at the question from the viewpoint of immediate personal gain or whether you should give serious thought to the far reaching effect which your step in selling your company will have on the industrial life of the nation.”

With the exception of one shareholder, the entire group agreed on not selling the company to Inchcape.

But Lord Inchcape wasn’t one to give up. Further meetings between him and the board of SSCN involved scenes where he called them pirates and declared that English ships had as much right to be on India’s coast as Indian ones.

The acrimonious matter finally ended with Lord Inchcape allowing Scindia Steam Navigation into the Indian Coastal Conference. The terms were strict. They could no longer sail their ships overseas, the total tonnage of the ships was fixed and there were limitations on how many new ships could be added by the Scindia Steam Navigation Company on a yearly basis.

But, a victory that had eluded Indian shipping companies for many years was finally achieved. An Indian company had managed to break into a British shipping ring. 

While Indians had been excellent sailors and commanded ships across the ocean, the advent of British rule had seen them relegated exclusively to the sub ordinate ranks. By the beginning of the twentieth century, there were no Indian officers — save for a few minor examples here or there.

The Mercantile Marine Committee sought to rectify this problem by establishing a training ship for Indians. The result was the TS Dufferin, which was finally agreed to by the British government.

Here too there was opposition, with one British member telling the committee that Indians were not fit to lead and that it would be several decades before an Indian cadet became a ship’s captain. As it turned out, the first ship manned entirely by Indians (MV Jalagopal) sailed in 1950.

Establishing a training ship was one thing, getting them jobs was another. British shipping companies mostly refused or took on board the bare minimum required. Here too, the maximum Dufferin cadets were employed by the Scindia Steam Navigation Company.

They also instituted scholarships — one each in the name of Walchand Hirachand and one in the name of Narottam Morarjee. Their efforts also managed to get Indians employed in the Bengal Pilot Service, which till then had been an exclusive monopoly of the British.

The efforts of Walchand Hirachand and others saw Indian shipping establish a foothold in the industry.