(Continued from last fortnight)

•Part 2 of the feature marking the quartoseptcentenary of the mother of all Madras business chambers

S. Anantharamakrishnan, first ­Indian member of the Committee.

From the early 1900s, the Madras Chamber of Commerce was to face a tumultuous period, which was to end only in the early 1950s. The first crisis it was to face was the collapse of Arbuthnot & Co, one of its principal members, and several of whose Chairmen and Directors had also served as Chamber Chairmen, some of them several times over. Curiously, the Chamber chose to remain silent on the entire issue, even as the firm sank, thousands lost their savings, and two other firms, Parry and Binny, barely managed to scrape through. But matters were to never be the same again.

If the failure of Arbuthnot was to see the founding of the Indian Bank, the Chamber’s stonewalling was to see the creation of a rival representative body – the Southern India Chamber of Commerce, founded in 1909. This was soon perceived as being representative of Indian business interests as opposed to the Chamber, which was wholly British. Gradually, the SICC was to rise in prominence and the Government heard its voice. The Madras Presidency had, thanks to Sir Frederick Nicholson, already made a success out of co-operative banking. Arbuthnot’s failure also resulted in several Indians taking to commercial banking. The Chamber could only watch these developments.

The Arbuthnot crash had its ripple effects in the complete loss of confidence that British businesses had in themselves. Thus, almost none of them was willing to invest in new businesses. In 1911, following Lord Curzon’s formation of a Department of Industry in Calcutta, the Madras Government became the first province to set up one on its own. Alfred Chatterton, then a professor at the College of Engineering, Guindy, was asked to head the Department. Chatterton was to repeatedly come into conflict with the Chamber which viewed all his activities with suspicion. It opposed the formation of Indian Aluminium (Indal) following the successful demonstration that Chatterton conducted of using aluminium to make vessels. This was a cheaper metal compared to conventional brass or copper.

Later, Chatterton was to advocate fisheries development and soap and pencil manufacture. Here too the Chamber objected, claiming that the Government was interfering in matters better left to private enterprise. Once again Chatterton was to prove successful. Sir Frederick Nicholson made a going concern out of fisheries, soap was begun at the Lalita Soap Works, and also the V. Perumal Chetty family set up the pencil factory.

The Chamber tried lobbying with the Government in Calcutta and London to get the Department of Industry closed and this was done temporarily. But a change of Government in England and the vociferous protests from the Indian members of the Madras Legislative Council saw not only its re-opening, but also a knighthood for Chatterton. Sir Alfred’s next act was to successfully implement the chrome process for leather. This was trashed as entirely unsuited to Indian conditions by G.L. Chambers of Chambers & Co. and a prominent Madras Chamber member. But when Sir Alfred made a go of it, he was the first to adopt the technology and begin the Chrome Leather Factory in an area that would one day become Chromepet. Even today, a Chambers Colony commemorates him there, though to Chatterton there are no memorials.

While these battles were being fought, the Morley-Minto reforms had come into effect, opening up Central and Provincial Legislatures to some kind of representation. One seat was given to the Madras Chamber in the Madras Legislative Council and V.G. Lynn of Best & Co. had the distinction of becoming the first member. In the Legislature, the Chamber member, representing truly British interests, had to contend with the Indian interests of the SICC representative. There were, however, occasions when they acted in tandem – such as when the Rajaji Government brought in sales tax and also implemented prohibition!

John Alves Arbuthnot, first Chairman (1836-37).

The Chamber was then faced with the formation in 1918 of the Madras Labour Union, the first of its kind in the country. This was primarily aimed at the Binny Mills and later spread to the Perambur Loco Works of the M&SM Railway. Both organisations were Chamber members and the Chamber had to bear the brunt of their complaints through 1919 and 1920. That year, the employers decided to band together to represent their interests and, under the chairmanship of (later Sir) Archibald Symonds of Binny, the Employers’ Federation of South India (EFSI) was formed. The EFSI was supported by the Chamber and that is a relationship that has endured. The Chamber, together with other British-dominated Chambers of India, next formed the Associated Chambers of Commerce (ASSOCHAM) – in 1920. That was also the time when the Government of India Act of 1919 brought in diarchy. The Chamber was to gain two seats in the Madras Legislative Assembly. It was also in the inter-War years that the Chamber gave its counsel on issues such as expansion of the port, improving the operation of railways, extending telephone services in Madras Presidency, ushering in radio broadcasts and facilitating air travel. It also helped in the amalgamation of the three Presidency Banks to form the Imperial Bank of India and it played a vital role in the setting up of the Reserve Bank of India as well.

In 1936, the Chamber celebrated its centenary. A dinner was hosted for over 200 people at the Banqueting Hall, with Governor Lord Erskine presiding. A commemorative volume on the Chamber’s contribution, put together by A.A. Hayles, then editor of The Mail, was released on the occasion. Though it was a select body of just 30-odd members, this was the Chamber’s apogee, for its power and clout extended everywhere, from the Legislature to the list of holidays to be observed each year. But World War II was to change all that, though in the immediate short-term the Chamber members all did well. The War was to deplete the number of Europeans in the city and those that remained saw the writing on the wall – independence was nigh. It was, therefore, in 1944 that establishments that had till then been pillars of the Madras Trades Association now also became members of the Chamber. This included Simpson, Addison and Spencer’s.

When independence came, it was a fall of sorts for the Chamber. Several of its members – the railways, the Imperial Bank and some of the businesses of its members such as mining – were nationalised. The Chamber’s representation in the Legislature and the Corporation was taken away and it also lost its advisory role in countless other Government bodies. It had to make the transition to becoming an advisory outfit and this it did, over time. It protested repeatedly against blanket nationalisation, lampooned Government’s efforts in establishing a socialistic administration, and fought hard against the abolition of the Managing Agency system, the bedrock on which most British businesses had survived and grown. But Government was not exactly favourable to the Chamber and its constituents and legislations went ahead.

The Chamber also Indianised. In the 1950s, S. Anantharamakrishnan of Amalgamations Limited became the first Indian to be invited to be a member of the Chamber’s Committee. In 1965, it elected its first Indian Chairman – A.M.M. Murugappa Chettiar. The post of Secretary also went to an Indian in 1969 – C.K. Krishnaswami being the first incumbent. With an increasing number of Indians on board, the Chamber’s outlook changed. It was warmly supportive of the pioneering work done for the industrialisation of Madras State by K. Kamaraj in tandem with R. Venkataraman and C. Subramaniam. It hailed the establishment of the country’s first Industrial Estate in Guindy in the 1960s. Gradually, names that we recognise today as leaders in Industry – Amalgamations, TVS, Murugappa, Ashok Leyland, Chemplast-Sanmar, Rane – and others came to the fore in matters concerning the Chamber.

Through the 1970s and 1980s, the Chamber was a trenchant critic of such draconian acts as the declaration of Emergency, the MRTP Act and the FERA. While its protests were not heard, its expatriate membership rapidly declined as a consequence of these legislations and, from 1975, it became almost completely Indian. Those were dark days for the Indian economy and the Chamber, rather like Mr. Micawber, kept the flag flying. By that time the city had several Chambers of Commerce and it was often confusing for a foreign delegation. This was when the Chamber pioneered the idea of a Consultative Committee of City Chambers of Commerce, with the Secretariat rotating among the various Chambers.

AMM Murugappa Chettiar – first Indian Chairman.

The bleak power scenario saw the Chamber coming up with an innovative idea in May 1982 when ten members banded together to suggest to the Government that they be allowed to set up a 110 MW captive power plant. A corporate entity – Southern Energy Development Corporation Limited (SEDCO) – was created for this. By 1993 the idea had firmed up further. Coal was to be imported from Western Australia and the plant would be set up in Tuticorin. But the Government dragged its feet and, with the privatisation of power being allowed from the late 1990s, the consortium faded, with the companies each going its individual way. SEDCO became a part of the Murugappa Group and now operates a gas turbine power station in Tiruvarur.

1986 was a year of celebration when the Chamber turned 150. Its second documentation, The Voice of Enterprise, a detailed volume on the history of the Chamber, written by R. Tirumalai, was released on the occasion. That was also the time when the Chamber, for long the guest/tenant of Parry & Co., moved out of Dare House and began a hunt for a home. That was to end in the 1990s, when it moved into its own premises at Karumuttu Centre.

With liberalisation, the Chamber has come into its own, facilitating several tie-ups, hosting seminars and training programmes. It continues to remain the voice of the top-ranking corporate houses of Madras city and Tamil Nadu State. To have retained that position for over 175 years is no mean achievement. This year it looks at skills development as its focus and is planning to build a training centre in the outskirts of the city. The founding fathers would have approved wholeheartedly.