We find a distinct inclination on the part of the Chettiars to route their capital into either familiar areas of financial intermediation or into slightly risky but emerging, profitable areas of investment, be it the import-export trade, trade and transport, music and cinema or the leisure industry. The story of A.V. Meiyappan Chettiar, who later emerged as the Moghul of Kollywood, can be traced to this period and is broadly illustrative of how a section of the Chettiars adroitly tapped the emerging market for leisure and entertainment.
The rise of silent movies and, following from it, the growing music industry provided the opening in the 1920s for Avichi Chettiar, the father of Meiyappan Chettiar, to move into the business of distribution of gramophone records and Baby Austin cars through his company of A.V and Sons. By the early 1930s, when Meiyappan took charge of this business, they were already among the major distributors of the gramophone records of HMV and Columbia for large parts of the Southeastern Tamil region.
By 1932, as a shrewd businessman who could perceive the enormous potential of the market for music records, Meiyappan Chettiar had promoted Saraswati Stores in partnership with two others. Established in Mount Road in Madras, this venture, in collaboration with a German firm, took up the production and distribution of its own music records. Given the popular appeal of music, the close relationship between music and films and the success of his musical production company, it was a small yet logical progression into films.
The talkies were gaining immense popularity across the Tamil region in the 1930s and through two companies he promoted, Saraswati Sound Productions and later Pragati Pictures Ltd, he made a formal entry into film production. The legendary A.V.M. Studio would come up in the late 1940s. Besides Meiyappan Chettiar, quite a few other Chettiars, realizing the profitability of this line of business, came to be closely associated with film production, distribution and finance. Prominent among them were AL.R.M. Alagappa Chettiar and S.M. Letchumanan Chettiar, also known popularly as Lena Chettiar. Given the difficulty of raising capital in an otherwise restrictive financial market, the Chettiars came to play an important role as financiers of film production in the early years.
Also read: One woman’s mission to revive Chettinad culture. ‘Things were disappearing in front of me’
Legitimizing Adaptation and Diversification: Role of the Community and Caste Associations
Ideational support and legitimacy for a move away from the traditional money-lending business were discernible in the frequent and strident appeals and exhortations in the periodic caste association meetings and gatherings as well as in contemporary Tamil newsmagazines and periodicals. Many of these news reports were often authored by the Chettiars and appeared at regular intervals in widely read newsmagazines like the Dhanavanikan, Oolian, Kumaran and Vysiamitran, largely managed and controlled by the Chettiars.
Diversification was a recurring issue in the columns of these and other news magazines. More specifically, these reports underlined the need for Chettiars to adjust to the changing times by restructuring their business organization and of diversifying into modern lines of business activity.
In this context, some stressed the importance of adopting modern methods of banking and accounting. One of the reports offered a more concrete suggestion. It appealed to the smaller Chettiar firms to seriously explore the feasibility of pooling their resources and coming together to form partnership firms with a view to promoting relatively large modern financial institutions.
There was also a fair amount of emphasis on the need to curb and limit conspicuous consumption and culturally influenced wasteful expenditure. Together, these news reports do point to the fact that the community was in a state of flux in the wake of the Depression and a source of concern to the community leadership, most of whom were Chettiars of substance and standing. We observe Raja Sir Annamalai Chettiar, one of the wealthiest representatives of the community and someone perceived as an influential spokesperson, endorsing and echoing the growing voices for adaptation and reform. Addressing one of the community gatherings in south India, he advised the Chettiars to seriously consider the need for reform in some traditional institutional practices in keeping with changing times.
He strongly argued in favour of scrapping the conventional agency system, which required the agent to serve the principal firm in one of its overseas centres for three years. He was for a more flexible system that would enable the agent to not only take his family along with him, but one that would allow him to stay on and continue to do business as long as he wished rather than be constrained to return to India at the end of his three-year term. Three years of isolation from the native family did lead to some Chettiars having liaisons with local women and a few of them also getting married to them.
The resultant parallel families and their impact on the Chettiar family structures back home also partly propelled the demand for reforms in the agency system. R.M. Alagappa Chettiar, also an influential Chettiar voice, was another strong votary for modernization and change. Addressing the Chettiars in Penang in 1934, he underlined the importance of modern English education for the young Chettiars, especially as a means to seize the new and emerging business opportunities beyond the traditional money-lending business. He even suggested that they should consider sending their wards outside India for quality education. For those who wished to continue with the banking business, he suggested the need to seriously consider modernizing the accounting system of the Chettiars and to convert their firms into modern banking companies. He was extremely critical also of the deplorable condition of many of the Chettiar business premises, adding how he felt embarrassed to invite his foreign friends there. He urged the Chettiars to give these places a makeover so that they bore the look of modern commercial establishments. These interventions through community meetings and print media, directed largely towards the lower and middle strata of the community, were, in a way, attempts to soothe the strained community nerves and to ensure that there was no major rupture in the network of caste–community bonding.
Other voices which were somewhat sceptical of reform and diversification within the community also emerged in the 1930s. The ‘no-changers’ had some influential supporters within their ranks, one of whom was A.M.M. Murugappa Chettiar, a leading banker with significant interests in Burma. His blow hot-blow cold relationship with Annamalai Chettiar was public knowledge.
He was miffed at being eased out of his position in the Nattukottai Nagarathar Association by the Annamalai Chettiar group in 1923. His differences with the group were further aggravated during the Depression, when the firm of a close relative collapsed and almost dragged his own firm down as well, due to what was believed to be negative publicity by influential fellow Chettiar firms. While admitting that the Depression had resulted in their business coming under severe strain, especially by restraining the process of circulation of capital, Murugappa Chettiar lamented that this situation did not warrant loss of faith in their traditional business of moneylending.
He advised his clansmen not to be taken in by the spate of advertisements for new company flotations and cautioned them against investing the greater part of their capital in shares and stocks. The control over the Nattukottai Chettiar association by a small group of elite Chettiars and the manner in which it was run, especially the lack of transparency, did not go down well with many Chettiars and was a source of friction within the community. In particular, the excessive control exercised by the Annamalai Chettiar group over the Nattukottai Chettiar association came in for criticism within the community. Embarrassingly, some of this came to be publicly expressed and provided grist to the mill that the community was far from being closely knit.
This excerpt from Raman Mahadevan’s ‘Fortune Seekers: A Business History of the Nattukottai Chettiars’, has been published with permission from Penguin Random House India.