The English outpost inched its way to the South, circa 1611, with a settlement in Masulipatnam in Andhra Pradesh. In 1626, it set up a factory at Armagaon (Durgarayapatnam), 35 miles north of Pulicat. Hereinabout, they ran into another outfit, the Dutch East India Company.
Beginnings of a smart city...
Wary of competition, the British East India Company deputed Francis Day, a company official, in hunt for an alternative site. Day ended up identifying a strip of “no man’s sand three miles long, one mile at its broadest” rounded by rivers on two sides and fronted by the sea on the third. The year was 1639. The Fort St.George came up on this land. Of-course, areas such as Triplicane, Mylapore and Tiruvottriyur predate Madras by several centuries, having found mention as villages in travelogues of yore.
The English were faced with the serious problem of not being able to speak the local lingo, which was very essential for their trade. They engaged intermediaries to act as interpreters. This led to the growth of the dubashes, natives who could speak at least two languages; dvi meaning two and basha denoting language. The Dubashes were a vital cog in the early development of commerce in Madras.
The first joint stock company was formed by one such Dubash, Kasi Veerana, a power merchant who founded Casa Verona and Co (how beautifully he anglicised the very Indian name!). He was a man who exactly knew which side the bread was buttered, for he adopted different identities while dealing with different people (he was Kasi Veeranna to the Indians, Casa Verona to the English and Hassan Khan when dealing with the Golconda Sultanate!). Commemorating the contribution of the dubashes in the development of the early trade in Madras, many streets in George Town (one of the city’s oldest areas and for a long time the hub of trading) such as Thambu Chetty Street, Linghi Chetty Street are named after them.
Soon free merchants blossomed. They denoted a class of people who made their money through private trade at the expense of the company. With the monopoly of the East India Company diluted over time by various Acts of the Parliament in England, the free merchants became powerful. An Exchange House came up in 1795 inside Fort St.George to facilitate easy conduct of their business. Today, this building houses the Fort Museum.
The growth of the managing agency system, the way most business was done across India until the 1960s, was the next pivotal point in the development of commerce in the region. The three big names who came to define Madras commerce, Arbuthnots, Binnys and Parrys were all managing agents.
Parrys, was founded by Thomas Parry, who came to Madras in the 1780s and started life as a merchant dealing with piece goods and banking. Binny and Co was founded by John Binny, who came to Madras in 1797 and initially started his career in the service of Wallajah Nawab. Arbuthnots had a history that went back to the 1770s. Founded by Francis Latour as Francis Latour and Co, it over time became Arbuthnot and Co., with the core business being banking.
The Madras Chamber of Commerce, was formed in 1836 to be a representative body for various commercial entities. Had it been formed a week earlier it would have been the oldest body of commerce in India. That privilege went to the Bombay Chamber. Over the course of the next century, it played a significant role in the development of infrastructure in the Madras Presidency. Its role in the development of the postal and telegraph service, the railways, the roads and the harbour was immense.
Though indigenous banking had been around for time immemorial (with the Nagarathar (Tamil) community and the Sahukars (Telugus) being its most prominent constituents), the first modern bank, the Carnatic Bank, was established in 1788. Along with the Madras Bank and the Asiatic Bank (1804), it formed the nucleus for the Bank of Madras, which was established in 1843. The Bank of Madras along with the Bank of Bengal and Bank of Bombay amalgamated to form the Imperial Bank in 1921, which in 1955 became the State Bank of India.
The Arbuthnot Bank crash of 1906, which affected the Governor and common man alike, spurred the Indians into opening a bank that would be run entirely by themselves. One of the advocates appearing on behalf of the investor groups was V Krishnaswamy Iyer, a famous lawyer and philanthropist. He got together many prominent citizens of Madras to set up the Indian Bank. In an act of irony, Indian Bank had its headquarters in the same buildings that was home to the Arbuthnot Bank on First Line Beach Road.
Dawn of the industries
The automobiles started coming up at the crack of the 20th century. The first motor car to be sighted in Madras was that of A J Yorke, a director of Parry and Co. Soon, many car agencies sprang up, with the likes of Addison Co, Simpson Co, Auto George Gakes, which had originally been into coach building, built the first public service vehicle in 1907. The TVS group commenced business in 1911, running a bus service in Madurai. The Rane group, which was started by Vamanrao Rane in Bombay in the early 1900s moved to Madras three decades later. In 1936, it was restructured as Rane Madras.
The two famous business magnates of the 20th century in Madras were S Anantharamakrishnan and A M M Murugappa Chettiar. The empires they have helped found are today amongst the leaders in their respective fields.
The Madras Stock Exchange (now dysfunctional) was founded in 1937. At the time of its formation, it was the country’s fourth and South India’s first. The country’s oldest industrial estate was established in Guindy in 1958. This was later followed by the establishment of the Ambattur Industrial Estate in 1965. Sundaram Finance, one of the country’s leading NBFCs today, was founded in 1954 as a subsidiary of the Madras Motor and General Insurance Company, which was amongst the top five insurers in the country.
And coming to think of it, the genesis of all this commercial and industrial progress and development goes back to a “strip of no man’s sand three miles long, one mile at its broadest”!!