the great Indian tea collapse

The Practical Planter

There's a moral to the story of the great Indian tea collapse

Indian tea is now secure on world markets, but it wasn’t always. Not long after tea was first grown commercially in India there came a period of mania when everybody tried to jump on the bandwagon—with results that were near disaster. The story of the great Indian tea collapse is of special interest today, now that New Guinea has embarked on a tea industry and Fiji is consider ing a similar step.

' is told in frightening detail by Sir Percival Griffiths, in his new Jtory of the Indian Tea Industry, ich was published in London in gust by Weidenfeld and Nicolson 1 will be available in Australia in tober at $26.20.

Jir Percival’s 700-page volume is a ailed account of all the problems t by the Indian tea industry since inception, and Islands tea planters I find in it valuable background urination necessary for a proper lerstanding of the tea industry, Jp to about 1861, the infant ian tea industry had been de eped soundly by men as much Tested in its long-term prosperity in immediate results. The in try, although small, was growing prosperity. liese successes attracted people > knew nothing of the early iggles of the pioneers or of the ards of tea-growing, and official arts also tended to encourage an ealistic outlook.

Anybody as manager

tbout 1862-63, there began a wild i, a mad fever, when every man Light that to own a few tea bushes to realise wealth. Existing planta is were bought at eight to 10 times r value; new gardens were started impossible sites by men who didn’t w a tea plant from a cabbage, the commonest rules of agricul :. Highly paid boards were ned in Calcutta and London, with ley lavished in every way, and management rampant, eople who had failed in every g else were recruited as managers tea gardens. Planters at that od were a strange medley of re

tired or cashiered army or navy officers, medical men, engineers, veterinary surgeons, sea captains, chemists, shopkeepers and used up policemen and clerks.

Tea companies, with or without tea lands, sprang up overnight; shares rose to fantastic heights; lands were cleared without any consideration of their suitability, or the availability of labour, and highly placed civil servants threw up their posts to be come planters.

Fraudulent transactions were com mon in this atmosphere. Many people developed plantations so they could sell them and cash in on the boom, without having any intention of themselves manufacturing tea.

Government officials exaggerated the future profits of tea, thus encourag ing this kind of mania.

Despite the many bogus gardens, the production of tea began to rise rapidly as a result of the planting boom.

In 1853, for instance, the output of Indian tea was 366,700 lb, and the trend thereafter was as follows: 1859 1,205,689 1865 2,758,153 1866-67 .. .. 6,387,988 A madness comparable in intensity with that of the South Sea Bubble had seized men’s minds and normally level-headed financiers and specula tors were scrambling wildly for tea shares and tea lands. But now the bubble was about to burst.

Dramatic failure

The considerable increase in pro duction in 1866 might by itself have depressed prices and caused financial embarrassment, but the situation now altered with dramatic suddeness.

In 1865 many proprietors became dismayed by the realisation of their foolishness, and when they started to sell panic spread swiftly.

There was a wild rush to sell.

Companies and individuals sold their estates for whatever they would fetch and the word tea stank in the nostrils of the commercial world.

Many concerns collapsed completely.

The depression was intensified by the fact that many owners of tea shares in plantations which might have weathered the storm showed as much anxiety to get out of tea as they had been ready a few years previously to speculate.

Sir Percival Griffiths says that apart from the speculation which was primarily responsible for the crisis, there were five secondary causes: (a) the lack of restraint by the government in granting land and in advertising the potential of tea growing, (b) shortage of labour, (c) lack of experience in cultivation

and manufacture, (d) the insisted by many on quantity at the expen: of quality, and (e) a food shorta* making it necessary for planters 1 provide food for labourers at belo cost.

It was the decline in tea qualil which had a vital effect on the ii dustry. For tea prices fell, and tl reputation of Indian tea suffered. Tl crisis had demonstrated the need f< first-class management, and the con panics which survived now tightene up supervision of their estates. E 1872 tea officials were beginning 1 report a steady revival of confideno and an improvement in the qualil of manufactured tea also brought a improvement in prices. Thus slow] the infant industry began to recov< from its initial madness.

Sir Percival comments: “In retn spect, the last three decades of tl 19th century gave the appearance ( a period of almost continuous e: pansion, during which Indian te gradually ousted China from tl United Kingdom tea market. Tl men of the time, however, must ha\ been far more conscious of alte: nating prosperity and depression, an of profits which on the average far below the expectations of th first generation of tea planters.

“Some of the factors which a< counted for the fluctuating fortune of the industry operate equall powerfully today. Then, as nov good prices in one year frequentl led to coarse plucking in the follov ing year, with a constant fall i prices, which then provided the di: cipline necessary to ensure a retur to better standards.”