Abstract
The First World War and the Great Extension Scheme (GES) jointly provided the opportunity for the Tata Iron and Steel Company (TISCO) to improve labour productivity based on an unprecedented enlargement of its plant and equipment; but it would turn out that the additional production capacity alone was insufficient to attain the desired goals. According to the growth accounting analysis for the interwar period presented in Table 1.1, the rise in TISCO’s capital growth rate of 28% per annum during the period 1917/18–1922/23 was nearly cancelled out by negative total factor productivity (TFP) growth of −17% per annum during that same period, resulting in a low productivity growth rate of just 5% annually. Because TFP is linked with management efficiency , negative TFP growth suggests that TISCO suffered from severe managerial inefficiency after the implementation of GES. This means that TISCO could only have enjoyed the fruits of that internally financed Scheme if supplemented by significantly large improvements in managerial efficiency .
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Notes
- 1.
This is not an isolated case of the coexistence of expanded production capacity and dysfunction in indirect labour management during the initial phase of a nation’s industrialization. Amatori and Colli write, “One important consequence of the magnitude of these [Second Industrial Revolution] investments was their impact on labor organization at workshop level. No longer could control be delegated to a foreman and remain an unknown for management’ (Amatori and Colli 2011, p. 75).
- 2.
In the following, we occasionally include fourth-tier shop foremen and their equivalent in a ‘labour’ or ‘worker’ category. This inclusion is justified for two reasons. Firstly, as both Chap. 7 and this chapter show, the fourth-tier shop foremen formed the nucleus of the Jamshedpur Labour Association, TISCO’s first full-fledged labour union. Second, as Appendix in Chap. 3 showed, some fourth-tier shop foremen were originally employed by TISCO as skilled/semi-skilled labours and promoted to a low management post during their corporate careers.
- 3.
Because the labour unrest of TISCO during the first half of the 1920s occurred within India’s heavy industry sector, it has received wide-ranging scholarly attention (Bahl 1995; Datta 1990; Simeon 1995). While these studies detail such aspects as the possible causes of the unrest, trade union organizing and the consequent reform of some labour management practices, sufficient attention has not been paid to one of the crucial aspects of labour unrest at TISCO; namely, its dysfunctional indirect labour management system. This and Chap. 7 will attempt to supplement the understanding about that latter aspect.
- 4.
A small-scale strike had been attempted earlier on 26 February 1919 by a small number of covenanted foreign employees (Bahl 1995, p. 209).
- 5.
Report by the deputy commissioner of Singhbhum, Industrial Relations (IR) Papers, File 14, p. 12, Tata Steel Archives, Jamshedpur, India (TSA).
- 6.
Initially, the workers approached Byomkesh Chakravorty, a Calcutta barrister, a member of the Swaraj Party after 1923, and an industrialist. Because he could not come to Jamshedpur immediately, Chakravorty sent Suren Halder, Nimal Chatterjee and Padmaraj Jain in his place (Ghosh 1973, p. 3).
- 7.
Tutwiler to R. D. Tata, 2 March 1920, IR Papers, File 15, p. 38, TSA.
- 8.
Jamshedpur Strike Report, Part 2 by Deputy Commissioner of Singhbhum, IR Papers, File 14, pp. 17–25, TSA.
- 9.
Tutwiler to R. D. Tata, 2 March 1920, IR Papers, File 15, p. 41, TSA.
- 10.
The directors of TISCO in 1920/21 included D. J. Tata (chairman), Sassoon David, Cowasji Jehangir, Vithaldas D. Thackersey, Fazulbhoy Currimbhoy, Narottam Morarji, M. A. Tata, Lalubhai Samaldas, F. E. Dinshaw (debenture director), R. D. Tata, and A. J. Bilmoria (special director) (TISCO, Annual report of TISCO (ART), 1920/21, TSA).
- 11.
Tutwiler to R. D. Tata, telegram, 12 March 1920, IR Papers, File 13, p. 59, TSA.
- 12.
Tutwiler to directors of TISCO, 17 March 1920, IR Papers, File 14, pp. 27–39, TSA; Appeal to the members of the Indian Legislature and the public of India by Jamshedpur Labour Association, IR Papers, File 44 part 2, pp. 69–87, TSA.
- 13.
“The Jamshedpur Strike: Full Story,” The Statesman, 18 March 1920, IR Papers, File 4 part 2, pp. 219–21, TSA. Another source reported that there were 23 wounded (GoUK 1930, p. 120). The anonymous author of the news article interviewed Tutwiler, Laycock, a commissioner, J. E. Scott, a deputy inspector-general of police, and two strike leaders in preparation for the piece.
- 14.
IR Papers, File 4 part 2, p. 250, TSA.
- 15.
ibid, p. 255.
- 16.
Incidentally, in response Tata’s sentiments, workers’ adviser Halder is described as “not for a moment question[ing] what the Company had done for its employees,” but also forced to remind the Chairman that “the fact remained that the strike had taken place and the conference was held to see how it could be ended” (ibid.).
- 17.
J. E. Scott, Report on the situation at Jamshedpur by deputy commissioner of Singhbhum, 26 May 1920, IR Papers, File 6 part 1, pp. 4–11, TSA.
- 18.
Notes of a meeting held in the general manager’s office on 26 May 1920, IR Papers, File 6 part 1, pp. 12–9, TSA. Underlined portion in the original.
- 19.
Copy of secret telegram on 23 June 1920, signed by Peterson, IR Papers, File 6 part 2, pp. 153–4, TSA.
- 20.
ibid., p. 153.
- 21.
Tutwiler to Padshah, 22 April 1920, IR Papers, File 4 part 2, pp. 341–2, TSA.
- 22.
Bombay Chronicle, 11 March 1920, IR Papers, File 13, p. 41, TSA.
- 23.
Ghosh worked as a chemist at TISCO, while Sathy worked as a draftsman (Ghosh 1973, p. 3).
- 24.
Jamshedpur Labour Association established 1920, IR Papers, File 7, p. 14, TSA.
- 25.
ibid., p. 15.
- 26.
The employment of outsiders as union officials was common in colonial India, as stated by Bagchi, “There is plenty of evidence of workers’ agency, with or without the help of ‘outsiders’, in the history of labour in colonial India” (Bagchi 2002, p. 215).
- 27.
IR Papers, File 4 part 2, p. 254, TSA.
- 28.
R. D. Tata told T. W. Tutwiler on August 1921 that the company had recognized the JLA at that point in time. Letter from Mr. R. D. Tata to Tutwiler, 2/3 August 1921, T53/DE5/T34/Minute/3, Box 509, p. 142, Tata Central Archives, Pune, India (TCA).
- 29.
As detailed in Chap. 7, the JLA’s representative capacity began to be questioned by the workers themselves during the second half of the 1920s, leading to a historic strike at Jamshedpur in 1928.
- 30.
Tutwiler to Peterson, 19 September 1921, IR Papers, File 12, p. 6, TSA.
- 31.
Appeal to the members of the Indian legislature and the public of India by Jamshedpur Labour Association, IR Papers, File 44 part 2, pp. 69–87, TSA.
- 32.
Chamanlal was a founding member of AITUC and a member of the central legislative assembly beginning in 1923.
- 33.
The strike of 1922 and the Chamanlal’s role as mediator is thought to have failed in improving working conditions at TISCO (Bahl 1995, pp. 258–60; Datta 1990, pp. 219–20); however, the strike was successful in enabling the JLA to enlist an influential political outsider to participate in the negotiations.
- 34.
Resolution, IR Papers, File 12, p. 53, TSA.
- 35.
Peterson gives us the context in which the company was forced to accept the proposal. “In consequence of some propaganda work done by the Labour Association among members of the Indian Legislature at Delhi and Simla in March 1924, the late Mr. R. D. Tata had several conversations with leading members of the Assembly and the Council of State interested in the subject, and, as a result, a Conciliation Committee was formed consisting of representatives of the Tata Steel Company and representatives of labour at Jamshedpur’ (Note regarding the Labour Association at Jamshedpur, 23 May 1928, IR Papers, File 45, p. 29, TSA).
- 36.
A newspaper cutting from Times of India on 28 April 1924, IR Papers, File 44 part 1, p. 21, TSA; Ghosh (1973, pp. 10–1).
- 37.
A newspaper cutting from Times of India on 28 April 1924, IR Papers, File 44 part 1, p. 21, TSA.
- 38.
Meeting held on 1 July 1924, Minute 4, Box 509, p. 45, TCA.
- 39.
Some notes taken at the meeting of the Conciliation Committee on 20 August 1924, IR Papers, File 44 part 2, pp. 197–222, TSA. According to the main report of the Royal Commission of Labour in India, the views of Das and Andrews seem to have been gradually accepted during the early 1920s. To wit, “Employers frequently announced their readiness to treat with unions led by their own workmen, but refused to recognise any outsiders. This claim had some support in the attitude of Government prior to 1920 toward unions of their servants; but the official position had been defined with a view to the pre-war organisations which catered mainly for the upper ranks of Government servants and, in 1920, the Government of India conceded the principle of the right to employ outsiders…At a later date, the legislative recognition of the right of registered unions to employ such persons and to include them in their executive, did much to diminish these objections” (GoUK 1931, p. 317).
- 40.
ibid., p. 203.
- 41.
ibid., p. 201.
- 42.
R. D. Tata to Motilal Nehru, 20 April 1925, IR Papers, File 45, pp. 69–71, TSA.
- 43.
Andrews’ election was reported in the Indian Daily Mail on 25 March 1925 (IR Papers, File 45, p. 14, TSA).
- 44.
- 45.
Motilal Nehru to Andrews, 31 May 1925, IR Papers, File 45, p. 101, TSA.
- 46.
A newspaper cutting from Indian Daily Mail on 15 August 1925, IR Papers, File 45, TSA. Shorter excerpt of the Gandhi’s speech is cited in Simeon (1995, p. 40).
- 47.
Labour Association: Note of decisions arrived at on 9 August 1925, IR Papers, File 45, p. 18, TSA.
- 48.
Peterson to Alexander, 4 September 1925, IR Papers, File 45, pp. 170–1, TSA.
- 49.
NDP deflator was calculated based on Sivasuburamonian’s statistics (Sivasuburamonian 2000).
- 50.
The sharp rise in price indexes over the two years was caused by a sudden expansion in the money supply (see Chap. 4). According to Nomura (2000), the NDP deflator correlated with the monetary supply from the year 1900 to the year 1947 (R² = 0.61), while the money supply, based on data compiled in Banking and Monetary Statistics, expanded by 50% from Rs. 4,067 million to Rs. 6,455 million from 1917 to 1919; thus, the sharp rise in prices from 1917 to 1919 was caused by monetary expansion. Because India employed the gold (exchange) standard at the time, the expansion of the money supply followed the growth in foreign exchange reserves, while at the same time expanding due to increasing bank deposits held by private financial institutions. The sudden expansion of the money supply in 1917–1919 was jointly caused by an expansion of rupee paper currency from Rs. 7,877 lakhs to Rs. 16,587 lakhs, an expansion of rupee coins from Rs. 27,700 lakhs to Rs. 36,200 lakhs, and an increase in private deposits from Rs. 17,469 lakhs to Rs. 23,654 lakhs. Thus, two-thirds of monetary expansion during 1917–1919 was caused by the expansion of cash currency, which was strictly controlled by the amount of foreign exchange reserves demanded under the gold standard, bringing us to overall conclusion that inflation during that time was largely the result of an increasing trade surplus enjoyed by India during the War.
- 51.
Given the data presented in Chap. 2 showing that skilled and semi-skilled wages began to rise from the early 1920s on at the latest, we have no reason to believe that similar wages at TISCO did not follow that trend.
- 52.
General Managers’ Correspondence (GMC) Papers, File 103, pp. 37–96, TSA.
- 53.
GMC Papers, File 111, pp. 37–60, TSA.
- 54.
ART, 1913/14 and 1923/24.
- 55.
GMC Papers, File 136, p. 321, TSA.
- 56.
List of apprentices who have been taken into the Works, 5 June 1921, GMC Papers, Files 110, pp. 142–61, TSA.
- 57.
Gospel has categorized management-labour relations in modern business corporations into “three broad interconnected areas---work relations, employment relations, and industrial relations. Work relations are taken to cover the way work is organized and the deployment of workers around technologies and production systems. Employment relations deal with the arrangements governing such aspects of employment as recruitment, training, job tenure, and reward systems. Industrial relations are taken to cover the voiced aspirations of workers and institutional arrangements which may arise to address them, such as joint consultation, works councils, trade unions, and collective bargaining” (Gospel 2009, p. 420). This is what is meant in this monograph by “labour management system.”
- 58.
Datta correctly notes in passing that the establishment of the Labour Employment Bureau was the first step in internalizing the labour market, although he does not go into detail on the subject (Datta 1990, p. 31).
- 59.
Marshall to R. D. Tata, 28 February 1920, GMC Papers, File 101, pp. 98–9, TSA.
- 60.
Tutwiler, general manager of TISCO, to the board of directors, 14 June 1921, GMC Papers, File 110, p. 101, TSA.
- 61.
This passage is also quoted in Datta 1990, pp. 87–8.
- 62.
An even earlier, well-known attempt by private business to set up an educational centre in colonial India was the Victoria Jubilee Training Institute established in 1882. For a review of the development and stagnation of technical education in colonial India, see Bagchi 1972, pp. 150–6.
- 63.
Walford, inspector of technical schools of the Government of Bihar and Orissa, to Shover, general manager of TISCO, 1 December 1915, GMC Papers, File 66 part 1 (July-September), pp. 518–21, TSA.
- 64.
GMC Papers, File 66 part 1 (July to September), p. 477, TSA.
- 65.
GMC Papers, File 111, pp. 233–6, TSA.
- 66.
Staff Training Department Break New Ground, Supervisors’ News Letter, vol. 5, no. 5, 15 February 1960, p. 7, TSA.
- 67.
Marshall to directors of TISCO, 7 June 1920, IR Papers, File 6 part 1, pp. 76–8, TSA.
- 68.
Marshall to directors of TISCO, 15 June 1920, IR Papers, File 6 part 2 end, p. 104, TSA.
- 69.
Tutwiler to Board of Director of TISCO, 21 September 1921, IR Papers, File 12, pp. 8–9, TSA.
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Nomura, C. (2018). Labour Unrest and the Introduction of a Direct Labour Management System. In: The House of Tata Meets the Second Industrial Revolution. Studies in Economic History. Springer, Singapore. https://doi.org/10.1007/978-981-10-8678-6_5
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