As post-pandemic India focusses with increased urgency on ‘Make in India’ and on indigenous manufacturing, the story of Delhi Cloth and General Mills should become an essential part of the entrepreneurship syllabus kit for aspiring as well as established industrialists because The DCM’s inception years were fraught with impediments and yet its eventual success was so spectacular.
DCM was the first mill in the north India region. As the first inland factory hub established in 1889 with a capital of Rs 7 lakh, DCM is a rare example of a manufacturing unit set up by local entrepreneurs using indigenous manufacturing techniques of that time. To build and run a big factory at a time when north India had barely heard of machine age, let alone enter it – was made possible due to remarkable spunk and guts of its founder members Ram Kishan Dass and Bishamber Dass.
The 1890s were brutal years. The monsoons were weak and temperamental, the main kharif crop would often fail, and the spread of plague had devastated the economy. There were constant war skirmishes at the North-West Frontier. Famine, pestilence and deaths stalked the land. The very survival of DCM was often at risk in the initial first two decades.
On the one hand there was scarce stock of raw cotton available and on the other there was little appetite among purchasers who would insist that sales be on credit. The buyers would often pay the mill when they themselves had disposed of the goods. The ambient sentiment was so adverse that even established investors like Maharaja Balbir Singh of Faridkot insisted that the 1 lakh capital that his father had invested in the mill be returned to him with interest.
“In addition to natural impediments, the colonial government was so iron fisted with DCM, an indigenous manufacturer, that they forcefully acquired one third of the mill land for creation of Kishanganj railway station in 1901,” author Arun Joshi writes in his book Lala Shri Ram: A Study in Entrepreneurship and Industrial Management.
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Durbar for king, then Swadeshi campaign
In 1902, Viceroy George Curzon announced that he would hold a durbar in Delhi on Christmas to mark the accession of Edward VII as the King of England and Emperor of India. The city of Delhi, which had been starved of any glory since the demise of Mughals, soon became a vast building site with cleared land, grandstands, fencing and new hotels. The durbar took place between 29 December 1902 and 10 January 1903, but for almost six months before that, all the labour got absorbed in lucrative durbar work. This meant that DCM could hardly manufacture any yarn to sell.
On 27 March 1902, Ram Kishen Dass, then Chairman and Managing Director of DCM, suddenly died. A few months later, another founder and secretary, Gopal Roy, fell ill. Despite illness, Roy would not give up work. According to one account, a house was built for him inside the mill compound from where he could keep an eye on things.
With Roy’s health deteriorating, his younger brother Madan Mohan Lall, the new secretary, had a tough time securing good quality raw cotton from its contracted suppliers who raised the costs, increased their commissions, took liberties with quality of supplies, even subjecting DCM to sharp practices of cotton trade like sending damp and damaged cotton hidden inside approved samples. This led to an interminable legal dispute, which was much more expensive than the value of the claimed damages.
By 1904, DCM was in a precarious position with its chairman, manager, secretary – all being newcomers to the trade, its output shrinking, its profits falling, its shares selling at less than half their value.
In these bleak times, help came from unexpected quarters. With Partition of Bengal, the Swadeshi campaign was launched in October 1905. The Indian National Congress called upon people of the country to promote growth of indigenous industry by adopting local goods and shunning imported commodities. By the end of the year, this idea got implanted in almost all provinces of the country. A wave of enthusiasm swept across the cloth industry and its labour force. It is no coincidence that at this time, Jamshedji Tata named his first mill as ‘Swadeshi Mill’. Another prominent manufacturer Sri Krishan Dass put out an advertisement asking every patriotic person to support products made by native capital, under native management.
Due to this changed economic and political climate of 1905, DCM finally had a good financial year. In human terms too, a new season began to take shape. After weathering severe financial and legal storms, the previous secretary Gopal Roy died and a new beginning was made when Madan Mohan Lall’s young son Shri Ram made an entry.
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Shri Ram’s devotion to DCM
Lala Shri Ram was born on 27 April 1884. Before his arrival, this big Sita Ram Bazaar based joint family of three brothers and a host of relatives just had one daughter. The family had a high status but Lala Shri Ram was not born rich. Rather he eventually became a self made- self created tycoon.
“Perhaps events like struggling business, long illness and early deaths of family members made sure that Lala Sri Ram grew up in an atmosphere where he remained unspoiled during his childhood and industrious in early youth.” Says Shobha Deepak Singh about her grandfather.
After burning his hands at a couple of failed businesses such as a ginning mill and a stationary shop, he made his debut at DCM in 1909 at the age of 25. His father Madan Mohan Lall was the secretary of DCM and Lala Sri Ram started from the bottom.
“World War I began at 11 pm on 4th August 1914. The first casualty was overseas trade, the first mourner was Indian business,” Arun Joshi writes in his book. DCM, like all other Indian textile manufacturers, panicked at first. But with some dogged enterprise and innovation by Lala Shri Ram, the mill began to supply cloth for uniforms and tents to the British army and managed to earn handsome profits during the war.
Random notes of bills, vouchers and floor notings reveal the essence of young Lala Shri Ram’s innovative style of working. Unlike his uncles and his father who hardly ever spent time on the factory floor or in the retail markets, a typical day of Lala Shri Ram was quite the reverse.
“He was usually the first person to arrive at the mill and spent his first hour with the accounts. Then he spent his fore noon on the factory floor checking production and sorting out manufacturing issues. He would then return to office for administrative work like purchase of raw material, sale of finished goods, transportation etc. In the course of the day he will visit the mill floor 8-9 times. He invested deeply in improving working condition like installing fans for the labor etc. On way to home , he dropped in at cloth stores—spending time with salesmen – asking them about what cloth was selling more, what were good and bad points of any product etc. If any salesman asked him who he was – he would reply “I am your humble ‘julahaa’ – the cloth weaver” recounts Shobha Deepak Singh.
By 1915, Lala Shri Ram knew his mill, his men and his customers personally. He knew his boiler, his spindles and his machines. He knew the way dust and heat affected his machines and his men . He was like a man reading braille print—touching, smelling, tasting and really understanding every minor aspect of manufacturing. It is this immersion which led the the group to later become a behemoth manufacturer of cotton, silk, sugar, potteries, sewing machines, vanaspati oil and what not. By the time Lala Shri Ram died in 1963, DCM was worth Rs 580 million.
This, however, is just the tip of the iceberg because business was just one of the many facets of this iconic Indian entrepreneur. Lala Shri Ram was also the founder of educational institutions like the Lady Shri Ram College, Indraprastha College, Shri Ram College of Commerce and Hindu College, and main inspiration behind cultural institutions like Sri Ram Bhartiya Kala Kendra, Kamani Auditorium and many more.
This article is a part of a series called BusinessHistories exploring iconic businesses in India that have endured tough times and changing markets. Read all articles here.
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