Site Specificity and the History of International Business

Formally, this paper tries to bring two literatures, both about multilocational firms, closer together. One of these has studied British and European enterprise in colonial India, and the other represents an “eclectic paradigm” applied to foreign investment.Footnote ¹⁴ A connecting point between them is the question of how siting or location matters to the profitability, competitive advantage, and evolution of foreign firms, while posing specific challenges for them to overcome.

The Indianist scholarship explains the presence of foreign firms in the colonial Indian business landscape, with specific reference to the status of indigenous firms. One part of the literature stresses an informal alliance between the colonial ruling class and foreign businesses. The alliance created a hierarchical field in which ethnic Indian firms were potential competitors and faced a greater cost of capital.Footnote ¹⁵ “European big business in India,” writes one historian, “dominated the commercial scene primarily because of its racial affinity with the rulers.”Footnote ¹⁶ In turn, the affinity enabled a close interdependence between imperialists and British business. “British lobbies, whose access to the Government was made easier by racial affinities,” writes Claude Markovits, “[were] kept alive by day-to-day rubbing of shoulders in the clubs patronised by both bureaucrats and British businessmen.”Footnote ¹⁷

On the other hand, M. D. Morris read the coexistence of British and Indian business in less hierarchical terms, more in terms of their access to different sorts of capital: long-term industrial finance and transoceanic shipping in one case, and trading capital and overland routes in another.Footnote ¹⁸ These differences entailed distinct informational advantages. Indians dominated the farmgate trade in commodities but rarely participated in exports. Extending this line of interpretation, Bishnupriya Gupta suggests that the coexistence owed more to informational advantages and social networks. British firms dominated export industries with their global market knowledge, while Indian firms thrived in local demand sectors. Ethnic segmentation persisted as networks reinforced initial entry patterns.Footnote ¹⁹

Not disputing the significance of politics, ethnicity, networks, and access, these views about global firms are overly top-down, as if a uniquely powerful or unusually farsighted metropolitan decision maker directed events. These arguments do not readily answer how the specific sites where the firms chose to base themselves contributed to profitability and asset augmentation or posed challenges. In this particular case, the political setting was that of a princely state, so that references to colonial power would fit oddly or not well at all. Advantages like access to networks, alliances, or capital point toward ownership and ethnicity, rather than the geographical context. The comparisons with indigenous firms tend to be incomplete because they focus on ethnicity, alliances, and market access. A multilocational firm chooses sites from considerations that do not apply with the same force to indigenous firms in the same business. That decision would have been based on a comparison of other sites, and a trajectory of internalizing spatial details into the firm’s long-term strategy. For an indigenous firm organically linked to its geographical setting, learning would involve other things, not this process.

The eclectic paradigm provides a way to incorporate these factors. Contemporary extensions of the paradigm have studied mainly knowledge industries, showing that firms benefit from operating in multiple locations because knowledge is unevenly distributed and clustered, making access to diverse sites key to exploiting these advantages.Footnote ²⁰ Recent research in this area has identified several recurring patterns that shed light on the historical development of multilocational firms. One such insight is the “liability of foreignness,” the set of tangible and intangible costs firms incur due to unfamiliarity with a site.Footnote ²¹ Another is the tendency of multilocational firms to learn from, and build upon, the practices of their counterparts, thereby creating cumulative trajectories of organizational development. In India-bound business history, site-specific strategies have entered via analyses of the political risks faced by globally dispersed firms, particularly during the decades of rising economic nationalism across Asia and Africa, when new regulatory regimes made managing local political conditions decisive for corporate survival.Footnote ²²

The eclectic paradigm can help refocus attention on key themes relevant to multilocational firms of the kind considered here. The early multilocational firms were characterized less by technological complexity than by a heavy reliance on natural resource extraction. In such contexts, geography naturally shaped corporate strategy, regardless of whether they operated as foreign or domestic, multilocational or single-location enterprises. Yet foreignness mattered in specific ways.

Harrisons and Crosfield transformed from a tea trader to a tea maker to control blending for the market directly. Doing so would have been impossible or costly via intermediaries. While it became multilocal, the firm chose to locate near a natural resource base in a princely state with its own rule of law. In the process, it had created two problems for itself: dependence on a weak, geographically specific transport infrastructure and unfamiliarity with property rights. Access to shipping, which Morris considered one of the strengths of international business, was a particular problem. Corporate records reveal locational awareness in these matters, particularly. The area and the business (tea, tiles, rubber) did see the entry and consolidation of many indigenous firms. No indigenous firm was a significant exporter of tea and rubber, was multilocal, or came close to the scale of the company, so that the strategies of Harrisons and Crosfield cannot be fully explained as competitive responses. These are better understood as responses to its foreignness and related to the geographical setting.

In the long run, the records reveal a process of learning to adapt to the specific geography and institutional conditions. Its initial policy, a network dependency of sorts, to take over derelict European-owned premises saved transaction costs but could also go very wrong at times. Simultaneously, the firm also concentrated on other modes of asset accumulation, not obviously network related. Learning to deal with and meeting infrastructural challenges was a key feature of its evolution. Spatial knowledge comprised not only geographical information held by indigenous firms but also the institutional and political expertise necessitated by the condition of foreignness. Learning had a political dimension; alliance with princely rulers was a key part of its evolution. But that did not render obvious competitive advantages, nor was it present throughout. The political element took shape once the firm became a large player.

This overview helps to set two boundaries on the research that follows. First, the paper does not provide a general history of the company; it examines the interface between the firm and the place, or between economic geography and the history of international business, rather than the business side itself. Second, because the analysis is framed in this way, I draw only on corporate papers and confine the discussion to company policy. The operation of the plantations, along with labor or agronomic matters, lies outside the scope of this paper.

The Firm

Harrisons and Crosfield was founded in Liverpool in 1844 by the brothers Daniel and Smith Harrison and Joseph Crosfield, all of whom were active in the tea import business. At the time, tea came almost entirely from China, was rarely re-exported, and was mainly consumed within Britain. Over the next fifty years, Indian tea gradually replaced Chinese tea and became a dominant colonial commodity routed through Britain. By 1890, Indian tea accounted for over a third of the British import of 194 million pounds. By 1924, this had grown to 241 million pounds out of a total import of 394 million pounds.

As London became the global center for tea auctions, the company relocated there in 1853. In the 1890s, Harrisons and Crosfield entered the tea blending business. Blending had previously been done by grocers, who lacked the expertise of professional tea tasters. Trading firms employed skilled tasters who could blend and package tea more effectively. One of the managers, C. Heath Clark, recognized this opportunity, and the firm became a key exporter to markets across the British Empire.

Around the same time, Arthur Lampard began to push for global expansion. He was an early participant in the Asian rubber boom of 1910 and had already acquired estates in India and Malaya. Lampard and Clark, who joined the partnership in 1894, expanded the firm’s reach further by opening branches in Asia to procure tea and rubber, as well as in Australia and New Zealand to export tea from India. The original partners’ involvement waned around World War I. By 1917, after Hugh Crosfield’s retirement, the names Harrison and Crosfield were no longer listed on the London partnership and the entity ceased to be a “family firm.”

The first South Asian branch was established in Colombo in 1895, handling Ceylon tea. In 1900, a second branch, Lampard, Clark & Co., was established in Calcutta to deal with Assam tea. Talks had been ongoing about relocating the southern operations further north in Travancore, closer to rubber and tea supplies. Travancore fit with the company’s increasing interest in rubber, as operations in Malaya grew. In 1907, Lampard and his team began buying tea and rubber estates in Wayanad and Travancore (see Map).

In 1911, Harrisons and Crosfield acquired a tile factory and sawmill in Quilon, which had previously belonged to the Scottish Indian Coffee Co. The tile unit produced goods for the Ceylon market, and the sawmill made tea chests for highland estates. The following year, the company established an engineering unit to import plantation tools. Later, the unit would secure structural contracts. The Quilon branch expanded further into shipping, becoming agents for British India Steam Navigation and offering marine and insurance services. It also acted as the managing agent and owner of three major Travancore plantations: Malayalam Plantations, Nonsuch Tea Estates, and Greenham Estate Co.

Between the wars, Malayalam Plantations became a major player in this part of India. The firm expanded by acquiring estates from British planters who were returning to England. Its portfolio included eighteen tea estates, one tea trading company, six rubber estates, eight combined tea–rubber firms, and one rubber trading company. As opportunities for further acquisitions declined, the company focused on balancing tea and rubber production. As mentioned, the company’s India operations did not substantially grow after the 1920s. Within ten years of India’s independence in 1947, the company’s role had shrunk further relative to other firms in tea and rubber, eventually leading to a sale in 1988.

How the Place Enters the Company’s Records

It is not surprising that Kerala would attract British entrepreneurs. Despite frictions, Travancore state was a valued ally of the East India Company, and Malabar further north was one of the Company’s three earliest territorial acquisitions in India. Around 1800, the Scottish merchant Murdock Brown managed the Company’s spice estate in Anjarakandy, a few miles from Mahe, his base of operation. There is, however, little material available to write a chronological narrative of British enterprise before 1840.

Specific areas in the highlands of the present-day Kerala state territory were familiar to Europeans exploring tea and coffee prospects in the mid-nineteenth century. In 1841, the Madras trading firm of Parry developed land in Wayanad for coffee cultivation. By 1880, some of the coffee estates started growing tea. The shift may have been a result of the plant disease that destroyed coffee on a large scale in Ceylon in this decade. In the 1870s, an aspiring planter, John Munro, negotiated with a branch of the royal family a perpetual lease contract. Thus began what would become one of the largest plantation companies in the world, Kannan Devan. The son-in-law of one of the founders, Otto Baron Von Rosenberg, developed the Lockhart Estate. Lockhart had been famous for 80 years as a stopover on the route of the Duke of Wellington (Arthur Wellesley) in 1799 during a conflict with the Mysore state and a potential site for a British fort. James Finlay later acquired these lands. In the Peermade area, Donald Ross had acquired land for coffee. In 1889, James Darragh (pioneer coir processor) purchased Ross’s Wallardie Estate, which had a few tea bushes, and converted it into a tea estate. In 1904, J. J. Murphy and R. S. Imray planted rubber in Travancore. Both had brought the seeds from Ceylon.

This early history paved the way for Harrisons and Crosfield’s growth. They entered and expanded in tea and rubber, mainly by acquiring existing ventures—unlike Munro and A. W. Turner, who built Kannan Devan from the ground up. In 1907, Arthur Lampard bought several tea estates in Wayanad that belonged to Parry, Peirce Leslie, and individual planters. Thus began a group company, East India Tea and Produce. Within a few years, associates of the company purchased additional estates in Peermade. In 1921, the Malayalam Plantations Company was established, bringing together five other companies that grew tea and rubber. Early in the interwar period, several individual planters were mentioned in the company records, possibly as potential sellers or suppliers of leaves to the factory. One of them, a Hillman, entered the records because his personal property was managed for repatriation after his death by the company.Footnote ²³

Other acquisitions included the Chisholm Ewart assets in tile and coir manufacture, the property of G. Brunton of Cochin, and Ferguson in Calicut. Brunton’s was a trading firm that made losses in 1919 under the aging owner, served by an equally old head clerk who had been in the job for 42 years, employing “antiquated methods” to keep accounts.Footnote ²⁴ The company had trouble valuing the estate. Ferguson of Calicut attempted to develop coffee, but lost his capital, except for his real estate, and was subsequently funded by the merchant Haji Faker Mahammad and Sons, to the point that Ferguson became a salaried manager for the latter.Footnote ²⁵ Small and urban European firms were, in this way, dependent on Indian financiers and the sharing of assets, such as warehouse space.

Unlike this set, the company evolved quickly as a diversified conglomerate with an urban base between 1900 and 1920. In 1919, it had three main branches in Quilon, Cochin, and Calicut, as well as factories producing coir and tiles for export, the sawmill, tea estates, and an engineering department that offered both goods and services. Additionally, it provided financing to small-scale tea planters on a commission basis for sales and shipping agency services. Its engineering branch repaired and procured machines for its estates and operated pumps to remove excess water from the flooded lowlands, where paddy cultivation was possible but expensive because of waterlogging. These operations were directed from the town. That urban world was growing fast, centered around Fort Cochin. “We believe there are now [1919] something like 14 European Firms of one kind or another established in Cochin; when we came here first [1907] we think there were about 7 or 8.”Footnote ²⁶

In the interwar period, the company’s business grew rapidly. A fourfold rise in coir rope exports (leading to concerns over quality and overproduction), and growth of tea, rubber, and cardamom sales supported real estate acquisition, purchase of new hydraulic presses, and import of estate tools. The tile factory was showing signs of strain, with its old machines inherited from the previous owner. Initially, it was happy to take on commercial contracts for almost any of the local produce and worked closely with local merchants. Some of them extracted coconut oil and stored it in their warehouses. In 1918, the company entered into a contract with a dealer to purchase casks of oil and transport them to the company’s yard, where they were further distilled to remove sediments and then shipped to London.Footnote ²⁷ In ginger and pepper, local traders again brought small lots to the company’s yard, where the material was sorted for quality, packed, and shipped. These opportunistic retail trades declined as the profits from tea and rubber soared.

In the interwar years, even as the company acquired real estate, its prospects as a west coast business came into doubt. The Brunton acquisition happened against the backdrop of competition with Peirce Leslie over the shipping agency, rumours of Tata and Shaw Wallace of Calcutta investing in the region, and a disruption in management as several employees went on war duty. Assessing the situation, the company concluded that “with our connections and ramifications all over the world” and with investment in a railway connection with Madras happening, the future looked better than before.Footnote ²⁸ In 1927, the Company purchased Davenport and Co. of Calcutta, its first and only significant acquisition outside of Travancore and Malabar. Davenport was the managing agent for eleven tea estates in Darjeeling and Assam, with a total acreage of 9,032, and an agent for several engineering and tea-trading firms.Footnote ²⁹

The move signaled a plan to expand in eastern India. In 1927, the corporate office moved to Calcutta. I cannot find clear evidence explaining why the firm moved its Indian head office from Quilon to Calcutta. Although the Calcutta office predated the one in Quilon, the Davenport acquisition strengthened the bond. Further, the move was logical because Calcutta was the main tea auction center and the hub of the European-owned tea industry. Later sections of this paper suggest that efforts during the interwar years to make Quilon a major corporate center were not fully successful, although the town continued to serve as a major operational base.

The move reflected an uneasiness about Quilon. Where did the uneasiness come from? The towns in southwestern India were unlike the colonial port cities elsewhere, which had huge service-based economies and sometimes large factories. The advantages of Cochin, Quilon, and Alleppey were not their service economy or port infrastructure, but rather their resources, from food to backwater clay. In 1919, the branch explained to London that “the cost of living in Quilon is undoubtedly lower than it is at most of our Eastern Branches.”Footnote ³⁰ Their proximity to Colombo, “really the port for South India,” and Tuticorin port was another strength, if only in regional trade.Footnote ³¹ The company’s Colombo connection was close and sustained until the interwar expansion. First, the Ceylon Trading Company opened a branch in Cochin. Lee Hodges of Colombo wanted to engage in trading copra with an American firm, and possibly timber. Until 1917, these offices exchanged personnel. When the company’s chief engineer retired, it had already spotted a replacement in Ceylon.Footnote ³²

Literacy in the region was well above the Indian average (1921), which would make hiring Indian managerial staff easier at this site. The corporate office was, from the start, run with Indian personnel, which no doubt saved on cost. In 1917, Tata and Sons acquired land near Ernakulam to start a business in coconut oil and other products. To respond to competition, and to branch out from Quilon to Cochin, the Company would need to expand: “the trouble of course is that we have not got the necessary staff to spare.”Footnote ³³ The company requested permission to recruit Indians into managerial and supervisory positions, including those to head a branch. Its engineering branch operated in fields where interactions with landlords and labor contractors often happened. P. Joseph Panapallil was the Agent of the Company in Alleppey in charge of the pumping operations, “a man of considerable standing in the district,” who could “assure us that he could command any quantity of labour.” The Travancore government sold the rights to several thousand acres of land near the backwaters in Alleppey, and 1,800 of these were acquired by Joseph Panapallil.Footnote ³⁴ No doubt his connection with the firm mattered.

The head office in London did not understand that world, except through branch reports, and therefore, did not try to manage it. It acted more like a mediator than a leader. It was more engaged with European staff matters, including hiring, salary, leave negotiations, sickness, and the return of managers in India. It primarily served as the center for personnel management. The London Branch office also took the lead on procuring equipment from Britain, handling purchases and the return or resale of faulty or surplus machines. Almost everything else that the firm did locally, the headquarters only endorsed. After the War, the head office began processing statistical data as a new responsibility.Footnote ³⁵

A significant part of the correspondence deals with a problem, transport, that plagued the operations throughout.

Shipping and Railway

The town’s biggest drawback was that it had limited railway connections to the rest of India and no harbor. In the 1880s, British firms in the area, albeit a weak lobby, persuaded the two governments, India and Travancore, to invest in a line. In 1904, a meter-gauge railway started operating between Quilon and Madras. It was built by the South Indian Railway Company, the Travancore State, and the Madras Presidency to support businesses. Curiously, the line appeared rarely in company documents. Quilon, rather than Madras, was used for transhipment. Whether this was due to the small capacity of the line or the proximity of the Quilon port, it is not easy to say. A second port, Tuticorin, on the east coast, was closer to Quilon, but again, without a direct rail link, the two ports did little in terms of export trade business. Business towns on the west coast—Cochin, Alleppey, and Calicut—needed to maintain close contact. Not until much later would a coastal railway line connecting the three be fully functional. The coastal railway was built gradually, with the key sections finished after 1950.

A connection with the east coast mattered in crucial ways, however. The west coast had fertile paddy land but did not make enough rice for local consumption. Backwater clay made this place a natural choice for tile making, but there was no energy source on the west coast. The tile factory required a substantial amount of coal. Despite good clay, the tile industry suffered from a lack of access to coal or wood to fire the kilns. Coal was expensive because there was no railway link between the pit heads in Madras and the industry site. During World War I, as coal became more expensive, the Madras railways increased their use of wood, resulting in the rapid depletion of easily accessible timber in the Travancore state.Footnote ³⁶ Coal shortage persisted in the interwar years. Not surprisingly, this business was one of the first units to close after World War II.

Both Travancore and Cochin states promised to build railways, but this was not very credible given their finances. The South Indian Railway Co., meanwhile, operated on the British Indian side and had a bias for the east coast business. In the 1920s, Harrisons and Crosfield maintained steady correspondence with the government of Travancore and the Railway Surveyor of British India regarding the construction of an alternative railway connection between Quilon and British India. “This development is of considerable concern to us as it will necessitate big building programmes, harbour developments and the opening up of the country in all of which we should take a considerable part.”Footnote ³⁷ It is notable that after operating in this place for two decades, the firm was still concerned about “opening up the country.” In contrast to the earlier period, when various obscure firms dealt with the Travancore government, by the 1920s, Harrisons and Crosfield had taken the lead in negotiations. Their interest was not only in the movement of goods, but also in selling construction material to the project. Besides a connection between Travancore and Madras, two other projects, one connecting Quilon with Cochin Harbour via Ernakulam on the mainland (Cochin was an island) and another connecting southern Travancore with Alleppey, were also of mutual interest. These, however, would take decades to build.

To grasp the shipping issue, we need some background on international carrier operations at west coast ports during the interwar years.Footnote ³⁸ Although Kerala’s southern coastline had long been linked to West Asian trade, it lagged in international shipping infrastructure from the late nineteenth century onward. At the same time, coastal trade expanded, driven by rising rice imports and the emergence of key exports, including tea, rubber, spices, cashews, coir, and tiles. Many shipping ports along the coast were commercially active but not fully equipped as ports. Most lacked railway connections. Yet they thrived thanks to the backwaters near Quilon and Alleppey, which allowed access to interior goods but limited reach beyond the region.

Except for Cochin to some extent, all other ports were “roadstead” type, that is, ships anchored at a distance. With limited crane facilities and no jetty, headload workers and country boats brought cargo to the shores and loaded the ships. This was a seasonal and enormously labor-intensive operation. Outside the monsoons, anchorage conditions were good; and on the southwestern coast, a catadioptric light condition significantly enhanced visibility. All ships added a monsoon clause to the bill of lading to the effect that if conditions demanded, the cargo would be delivered “at such convenient ports as circumstances permit.” Usually, that meant Cochin. Cochin, just outside the Travancore territory and under another princely state, had a jetty and better anchorage thanks to inland water channels. It still did not have a harbor.

Alleppey was Travancore’s main port. All Travancore ports were overseen by a Port Officer in Alleppey, though staffing across the system remained minimal and poorly paid. It relied on two natural advantages: a seasonal sandbank that aided monsoon shipping and the light-reflection effect mentioned before. Ships anchored offshore, and cargo moved via dhows and flat-bottomed barges through the canal–lake system. Alleppey imported machinery, food grains, and estate supplies, while exporting coir products, dried fish, tea, rubber, and cashews. Trivandrum also had a roadstead port, supported by a pier and dugout canoes ferrying goods. Ships were anchored about a mile offshore. No exports passed through here, and the port closed in the monsoon season. Even in dry months, ships routinely invoked clauses that allowed delivery at alternative ports.

Quilon stood out as one of Travancore’s oldest and most commercially vital ports. Also a roadstead port, it benefited from natural shelter at Tangasery (modern Thangassery), once fortified by the Portuguese in 1519. A lighthouse was built here in 1902. Like Trivandrum, Quilon relied on dugout canoes, but it had two significant advantages: reliable access to almost all of Travancore’s trade hubs via the backwaters, and a rail link to Madras. Quilon was Travancore’s primary rice import hub, receiving shipments from Burma. It also imported raw cashews from East Africa, which were processed locally and re-exported to the US and Europe. Additional exports included tiles and timber, sent to Ceylon and Tuticorin.

Nearby smaller ports played niche roles. Colachel, south of Trivandrum, and Kovilthottam, just north of Quilon, welcomed mid-sized ships with pre-arranged cargo, mostly palmyra fibers. Both shut down during monsoon months. Kovilthottam also served the Travancore Mineral Company’s exports of ilmenite and other minerals. Neendakara, close to Quilon, and Kadiapattinam, at Travancore’s southern tip, occasionally saw country boats. In the late twentieth century, Neendakara became the principal landing site for cashews and for an Indo-Norwegian joint venture in maritime fishing.

The shipping operation and cost saving on that front depended crucially on the partnership between the firms and the carriers. Of course, the firms were keen to secure sole agency agreements with carriers. Besides commissions, the agency meant they would be informed about freight rate changes in advance and factor that into their financial planning. In turn, the carriers wanted to deal with a firm that part-owned and part-controlled the territorial transport system and could gather the army of workers and boat people that performed the ship-to-shore movement.

Harrisons and Crosfield ruled in the agency contract negotiations, but only in Quilon. They managed Lloyd’s shipping in Trivandrum and held the agency of the British India Steam Navigation, the largest shipping firm in Indian waters. These agencies were of little value. Ships of big carriers refused to call at Quilon, and if they called at Cochin or Alleppey instead, as most did, their longtime agents were other firms. If they worked in partnerships with other agents, not only did the company lose some commission, but working with rivals (principally Peirce Leslie) created a risk that they would prioritize their trade.Footnote ³⁹ The British India ships had high capacity but sailed less frequently than the trade in seasonal produce required. Besides, to rely on British India, local traders would have to arrange to send goods to Bombay first. Therefore, the trading firms attempted to establish partnerships with a series of smaller shipping companies dedicated to the western coast, primarily Clan Line, Ellerman Lines, and Hall Line.Footnote ⁴⁰

Cochin and Alleppey were crowded fields. Six Indo-European firms and two Indian ones held the agencies for major shipping lines: Aspinwall (Hall Line, Ellerman and Bucknall, British India); Darragh Smail (Holland Australia); Harrisons and Crosfield (Hansa, Clan); Madura Co. (British India Steam Navigation); Peirce Leslie (Asiatic Steam Navigation); Volkart (Blue Funnel Line, Silver Java Pacific, Lloyd Triestine, Norwegian Africa and Australian Line, Bombay Steam Navigation); and Dharamsey Wagjee and Rathilal Khimjee (Scindia Steam Navigation, Malabar Steam Navigation, Eastern Steam Navigation). Aspinwall, Volkart, and Peirce Leslie owned most of the boats that moved cargo between ship and shore.Footnote ⁴¹

Soon after the establishment of the Quilon branch, World War I began, and the government requisitioned many ships. After the War, with a shortage of boats persisting, another mini-war broke out on agency contracts on the west coast, and it seemed to continue into the 1930s. It began around 1919, when Peirce Leslie and Harrisons and Crosfield had an angry exchange on the point that the former’s staff were trying to entice the leading tea estates to shift from the latter.Footnote ⁴² Two big players, Volkart and Peirce Leslie, tried to monopolize the agency of some of the lines operating here, while also trying to block the entry of lines that did not join the coalition. Harrisons and Crosfield did not enter it and attempted to secure the sole agency of Mackinnon McKenzie, but the latter did not respond to the proposal. After the War, the Osaka Shosen Kaisha showed some interest in the west coast, and Harrisons and Crosfield was toying with the idea of entering into an agency with them. James Finlay was Osaka’s agent in Colombo. Again, this partnership did not mature, probably because the carrier’s main interest was cotton.

In December 1926, Peirce Leslie gave up the agency of the Clan Line in Cochin. The company made a tentative move to take the agency, delaying the decision because communication with London broke down, with the “most unfortunate” result that W. Goodacre and Darragh Smail, working closely with Peirce Leslie, took it instead. The company’s concern was that if a coalition of carriers and agents could share freight information before rivals knew, they could use landing cost as a tool for competition.Footnote ⁴³ Another issue during the interwar years was the rebates that shippers offered to merchants, which many Indian potential rivals in the ocean shipping business viewed as an oligopolistic practice. There was, however, no end to the rebates. If anything, they were reinforced on the west coast.

The only business that did not suffer from the competition over agency was tile. Harrisons and Crosfield’s tiles were exported to Ceylon and Tuticorin in coastal steamboats. The base for this traffic was Tuticorin. The coastal boats could only run during the dry season, from November to May. The exports had to wait for boats to arrive laden with tobacco or rice. To gain more control, save money, and mitigate the seasonal fluctuations in traffic, the Company sought to purchase two boats. These were also handy with the backwater traffic. However, they were not used very much and cost the firm serious maintenance issues.

The Travancore government and the company had entered negotiations on building a jetty in Quilon, which would give it better control of shipping and help its engineering unit access imported materials. In the background, several major infrastructure projects on the east coast, including the construction of the Tuticorin port, threatened to draw west coast cargo there.

In 1927 and 1928, harbor construction engaged the mercantile community and officers and engineers of the princely states in South India. An ongoing project to build a deep-water harbor in Tuticorin seemed to be going nowhere, whereas one for Cochin was deemed too expensive. Against this backdrop, smaller and affordable projects drew attention. The construction of a pier at Quilon involved the chief minister (Dewan) of Travancore, its Indian engineers, railway representatives, and Harrisons and Crosfield in a joint discussion. According to the engineers, the old sawmill site provided the most suitable ground for a pier. A “meeting of merchants of Quilon” was called in 1927 to discuss a pier for Quilon, a meeting “[we] will probably be required to address.”Footnote ⁴⁴

The pier happened, but it was too late. Under the financial and managerial leadership of the Government of India, Cochin Harbor commenced full operations between 1928 and 1930, following a complex construction plan that involved creating an artificial island, breaching a sandbar, and building a railway connection to the mainland. The 1930s saw the firm losing interest in Quilon as a trading hub. “The most economical and efficient centre for our import business is Cochin,” a 1941 letter explained. In 1943, Quilon was, “to all intents and purposes, dependent on its Estates Agency business.”Footnote ⁴⁵

Like with infrastructure, the company tried to understand local complexities in other areas too, again with mixed results.

Politics, Law, and Labor

Harrisons and Crosfield had a close relationship with the Travancore state. The company papers rarely comment on the relationship, but stray remarks suggest they saw economic advantages in operating from a princely state. One of these stemmed from taxation. In 1927, three of the company’s bases, Calicut, Cochin, and Calcutta, were taxed by British India at a rate of 14 percent of profit. Two others, Alleppey and Quilon, were in Travancore and paid tax at a rate of 7 percent. The company was eager to move its cargo operations from Cochin to Alleppey and Quilon.Footnote ⁴⁶ A year before, when debating whether to retain a property in a spot near Cochin (Palluruthy, now a southern suburb of the town), the Quilon branch explained that if the Cochin Harbour project took off, it would make sense to establish a base in a place outside the harbor limits to take “the advantage of escaping British India income tax.”Footnote ⁴⁷ These calculations, however, were not sustainable in the long run as the business expanded and estates spanned British India and Travancore.Footnote ⁴⁸

Imperial power was a distant thing, and of no apparent relevance. But the princely court valued the firm. In 1918, J. Mackie, head of Quilon, was appointed a member of the Travancore Legislative Council, a position he eagerly accepted, hoping it would be “a means of facilitating our dealings with the Government.”Footnote ⁴⁹ Indian princely states had limited access to public borrowing. The company purchased the Travancore government’s bonds on a large scale, and on two occasions considered selling these well below par (1925, 1926), suggesting that it was a goodwill investment rather than a profitable one.Footnote ⁵⁰ European companies contributed to the erection of a Town Hall in Trivandrum, on account of the king’s 60^th birthday. Other prominent institutions drew on their public spirit. When they needed help with the construction of a church, the head of the Syrian Church of Malabar wrote a letter to the London directors of the company, seeking Calicut’s assistance.Footnote ⁵¹

At the end of World War II, a new topic of conversation started: industrialization. The chief minister of Travancore was keen to engage the British firms in an industrial plan. The London office was also eager for Quilon to join the exchange, but anxious to draw a line between “industry” and “plantations,” which should carry on as before without government interference.Footnote ⁵² The industries in question were tile, sawmill, and structural engineering. In 1946, the company discussed obtaining a sole buying agency for the Travancore State, an idea London explored with enthusiasm. The backdrop was a credible news report that the government of independent India would impose sanctions on Travancore if it did not relinquish independence and join the Indian Union.

The state would have helped the firm in acquiring blocks of land in the high ranges, but in all other sales, land law was a potential problem. The company’s brush with the law, mediated by its real estate operations, again involved an institutional setup rooted in the local context. Land law was ordinarily opaque to most purchasers. Europeans preferred to purchase ready-to-use real estate from Europeans because they instinctively but mistakenly thought that it would entail the exchange of a good title. Further, “in the Indian areas, bungalow accommodation is almost unprocurable.” In Calcutta, with its long history of European settlement, this was not such a problem. In Cochin it was, in Quilon even more. In Cochin, the company acquired land and buildings formerly owned by the Dutch East India Company.Footnote ⁵³

In Quilon and the highlands, real estate abandoned by Europeans existed, but was not common. The Quilon branch had started by acquiring land from a defunct Scottish coffee firm and the premises of Chisholm Ewart. Chisholm Ewart operated in Quilon as a tile maker and exporter. The negotiations began in 1914 and continued until 1921. These deals were not easy because departing businesses had hidden debts and hidden rights. The Chisholm Ewart negotiations involved an inquiry into the rights of the landlord who had leased out the land, and another into the books of the firm, which were not in any order.

The hidden rights problem was revealed in the purchase of a major property in Calicut, then under Quilon’s management. In 1921, Harrisons and Crosfield bought Plantation House from Miss Hinde. In 1926, most businesses had moved to the South, so the company decided to sell Plantation House. However, they found out they could not legally sell it because their ownership rights were not clear enough for the market. When they asked the lawyers representing Miss Hinde and her sister-in-law (who were both living in England at the time), they discovered that the original ownership papers, as many as forty-two separate deeds, were missing. The company had bought the house without being aware of this problem.Footnote ⁵⁴

It took time to figure out what had caused this complicated mess, which dated back to 1853. The firm’s lawyer knew the story but was ill and living at his home in Palghat. The legal troubles with the house started when Leckie and Co. bought it from its European owners. After that, the property changed owners many times, sometimes in parts and sometimes as a whole. Sometimes Indian owners bought bits of it. Finally, Hinde and Co. (who were probably coffee planters) bought it in 1868. From then on, the property was used as collateral for loans on several occasions, either partially or completely. Because of this, other people (some living in England) also had claims on the land. To make matters worse, one of Hinde’s business partners, T. Ferguson, went bankrupt. The Company ended up buying the house and land from the remaining members of the Hinde group, thinking they had a good title. The Plantation House caused the firm more trouble in the 1940s because the building was collapsing, and the managers were unsure whether it would be worthwhile to repair it.

From the interwar period, the possibilities of expanding by acquiring derelict property were exhausted. Expansion occurred through the purchase of land from local landholders and developing it with the resources of the engineering unit.Footnote ⁵⁵ These rights were often long held and therefore more secure. But the managers had to tiptoe around the feelings of a landlord about to lose a precious property: “It is not advisable to press for a definite statement as anybody conversant with dealings with certain gentlemen in the East will understand.”Footnote ⁵⁶ The engineering unit began by buying land from Kesava Pillai, a Nair landlord of Quilon. In the same year, the Company started a Fort Cochin branch by renting a building owned by Mayan Kutty Hajee. From shortly after World War I, the Travancore government began converting low-lying areas near the backwaters into commercially usable land. With this move came a clear title, and the Company bought big chunks of land to develop warehouses and officers’ quarters.

Its tile unit needed backwater clay. When purchases from landlords, who were “only too anxious to have the clay taken off their property as it makes the land more valuable for cultivation,” were insufficient, the company bought backwaters land for its clay.Footnote ⁵⁷ Much of early 1919 was spent conducting complex negotiations with Hasbulla through his agent (vakil) over a plot of land he wanted to sell to the company. The problem was not the title but that the asset measured either 4 acres or 1.8 acres, depending on the season and the extent of monsoon flooding.Footnote ⁵⁸ Hasbulla wanted the price of four, and the managers thought that defied logic. All backwater land was like this. Land disputes and deeds from the 1950s suggest that this issue was addressed somewhat with a finer gradation of land quality.Footnote ⁵⁹

In the 1940s, as the business had consolidated, the company had a lot of unused land that it wanted to sell. The market had suddenly turned profitable, given “a lot of investing in land by Indians” with extraordinary war profits.Footnote ⁶⁰ These profits created another and more serious prospect. Not only land value but also share value increased during the War. During the interwar period, new estates had started with more financial backing than in the early years of the century. The Southern India Plantations Agency, a subsidiary of the London merchant banker Arbuthnot Latham, was one of the new managing agents. A report from the Quilon head during the War showed that Indian businesspeople made money and bought many company shares during the War. There was a new concern that some owners of privately owned European estate companies might want to sell their shares. This could hurt Harrisons and Crosfield’s role as a managing agent.

Because the business relied heavily on labor, managing workers—like law, politics, and infrastructure—required careful handling. Neither corporate office records nor the estate records suggest that industrial relations caused the firm much worry before the 1960s. “In the past, labourers considered the company as the sole protector of their interests.”Footnote ⁶¹ This statement, reported in a 2019 work, probably reflects the sentiment of people who had worked under the old firm. As mentioned earlier, the dominant preoccupation in London was staffing, primarily Europeans, but increasingly Indians in the 1940s. Contract rather than dispute resolution was the primary focus of these discussions.

Disputes did happen, though. The wave of strikes in Bombay and Madras early in the interwar years had an effect in Malabar. In 1918, in Madras, the Buckingham and Carnatic Mill temporarily closed in response to a workers’ strike. The industrial action, unprecedented in scale in South India, sparked a significant amount of media debate and inspired nationalists campaigning for Home Rule to hold public meetings and deliver speeches that linked the industrial problem to unfreedom. Workers in the tile works, sawmills and engineering shop, “led by some professional agitators,” struck work over failed wage negotiations.Footnote ⁶² These problems were quickly contained.

London was cautiously generous on wages to meet wartime inflation. Against the backdrop of wage renegotiations, a poor harvest in 1918 led to a rise in rice prices. The company needed to import rice from Burma, and generally keep a close watch on the local market price.Footnote ⁶³ These measures paid off. A year later, the Indian staff in Harrisons and Crosfield’s factory and office in Quilon sent a letter to the London Director on a visit: “It goes without saying that the establishment of the Firm in Quilon has done incalculable good to your Memorialists during the past eight years. Thousands of workmen have been able to find their living in the firm.”Footnote ⁶⁴

Throughout these episodes, the main class division in the factories happened along ethnic lines, between the European managers and the Indian clerks and workers. In the 1940s, the pattern had changed. The War forced more recruitment of Indians into management, though this was not a sudden development. A great deal more data is available on the wages and welfare of Indian staff in the 1940s. This data reveals that a higher proportion of graduates from Indian universities were appointed to supervisory roles over the years. Clearing of goods, storing, and forwarding tasks were usually assigned to an Indian employee.Footnote ⁶⁵ In 1945, the head of the accounts and the head clerk, both from Quilon, retired at a salary of INR 200 per month.Footnote ⁶⁶ The salary of a new clerical employee was Rs. 50, and of an Indian technical staff was INR 100. The average monthly income of India in 1943 was about INR 14 (or lower). These figures suggest that the salary differential among Indian employees was probably much wider than in 1920, whereas that between European managers and Indian managers had narrowed. Recruits into management received INR 400–800 depending on experience. Behind these numbers lies a story of the managerial labor market, which supplied more Indians than before and more Europeans with expertise in another Indian company than previously.

The company was a desirable employer due to its lucrative compensation and benefits. During the War, the company began paying a dearness allowance to its Indian staff. Many long-time Indian staff members in the Quilon office received pensions, and their spouses received family pensions.Footnote ⁶⁷ There was, however, no pension scheme properly speaking. These payments were technically “temporary allowances.” The War forced the company to take care of its Indian staff who escaped Singapore and Malaya.

It was a much easier task for the firm to implement a provident fund system for the foreign staff, as the payments were backed by bonds purchased from an international bank and paid in sterling. Organising a counterpart system in India presented additional complications, particularly in a wartime economy. Around 1942, Malayalam Plantations agreed to extend pension and provident fund schemes, which had been available to European officers for about 15 years, to the Indian staff. By 1945, this was in operation.

Although somewhat stagnant, the company was not in decline in the 1940s. But it faced new threats from politics.

Rising External Strains: 1942–1982

Two significant events occurred during World War II and the concurrent negotiations on Indian independence. With much more action happening in Cochin, Quilon was “getting more and more off the map.”Footnote ⁶⁸ In 1942, Stafford Cripps headed a mission to India to discuss independence. The mission failed to deliver but generated a public discourse on the shape of future economic policy. The left-leaning Cripps made no secret of his sympathy with the leading Indian capitalists, who wanted to reduce the role of foreign enterprise in India by using the power of the state, rather than the market. The Congress agreed on the assumption that its other primary constituency, labor, would get stronger job protection.

In 1941, the Associated Chamber, representing British industrial interests in India, contacted all European firms to solicit contributions for the establishment of a London Committee that would lobby the British government on behalf of British interests in India.Footnote ⁶⁹ That move failed, but the growing anxiety was beginning to find outlets. In South India, the United Planters Association of Southern India said in a report what a national government would mean for foreign business: “Indianisation” of staff; mandatory registration of companies in India; “labour legislation would receive a tremendous impetus”; and an end to “free trade,” tariffs, and other adversities.Footnote ⁷⁰ “Members,” the note concluded, “would be well advised to think ahead and prepare.” All these fears, and some more, came true in the decade after independence.

The transfer of power from the princely states to the Indian Union was traumatic for several parties. It created a problem for Harrisons and Crosfield, too. The Congress and the communists had for some time taken over the reins of regional politics. They represented national parties. They were not friends of the Travancore rulers, and by extension, their friends, the foreign firms. Around the time of independence, the Travancore rulers were negotiating the purchase of large stakes in several foreign firms. As the rule retreated, the foreign firms were exposed.

The company reflected on these shifts in politics, but did not see them as existential threats.Footnote ⁷¹ Between 1945 and 1951, it had steadily expanded turnover and net profits, earning a rate of return on turnover of about 3 percent in 1951.Footnote ⁷² It was almost certainly the single largest taxpayer in Kerala. It had raised the salaries of Indian staff substantially. It was narrowing the field of operations to South Indian tea. That decision had more to do with the fact that the biggest profit center was Quilon and the plantations division. Over three-quarters of the turnover came from tea, engineering and shipping accounted for 10 percent, and the other divisions were marginal.

On July 5, 1955, Harrisons and Crosfield sold a significant stake in Davenport to C. L. Bajoria, a businessman from Calcutta who built a fortune by acquiring British companies in the city, allegedly through shady stock market deals.Footnote ⁷³ It is unclear if management control was passed on or shared. By the 1960s, competition from local firms led to the closure of the tile unit and the sawmill in Quilon. The firm had a small interest in cashew exports, still based in Quilon. But it had shifted to processing raw cashew imports from East Africa. Its coir trading activity never seemed to grow. The company was reinventing itself by directing its operations toward Kerala and tea. With government directives restricting managing agencies, several tea companies managed by Malayalam Plantations merged, allowing the Company to adopt an expansion strategy that used highlands for tea and lowlands for rubber. Degraded estate lands or those prone to landslides were converted into rubber as part of a new push for environmental management.

A further area of engagement was industrial relations. In 1946, workers in Quilon went on strike twice, and estate workers also participated in the strike. In that year, strikes were all too common and ended as quickly as they began. The company took a soft line and settled the disputes without much fuss. However, these episodes reinforced the interdependence between the state and the firm. Travancore was eager to suppress communist unions, and the company was a significant beneficiary of this step. A second dispute in the company’s Cochin office arose in 1962, but it was settled by the court.

In the 1960s, the estates were significantly more turbulent, as communist influence spread in the newly formed state of Kerala. How do we read this trajectory? A left narrative on labor relations in the Indian plantations offers an answer. For a long time, European planters, aided by the backing of colonial power and brutal labor laws, had been exploiting the workers. After independence, the trade unions, usually affiliated with a national political party, discovered this abuse of power. Armed with new legislation and regulations introduced in the 1950s, they fought on behalf of workers, causing labor disputes to break out.Footnote ⁷⁴

The estate world was somewhat remote from the urban labor market for a considerable time, allowing for an informal kind of labor relations that had elements of paternalism and abuse. However, most of this scholarship overlooks basic facts of labor welfare. The estate wages were significantly higher than the average agricultural wage or average income for as long as we can measure, and estate work was year round, unlike most jobs in the countryside. In 1940, the lowest wage at Harrisons and Crosfield plantations, Rs. 15 per month, was above the national average monthly income.Footnote ⁷⁵ That imperialist power vitally helped the planters is an outlandish idea on many levels, including that Travancore was not in the British Empire.

It is not credible that the post-independence outburst of disputes came from the discovery of long-concealed abuses. The pressure the unions brought upon the owners had an element of political opportunism. They caused disputes because they could. Trade unions did not do much for the two longstanding victims of discrimination in the workplace: women and Dalit workers.Footnote ⁷⁶ In any case, as long as Harrisons and Crosfield was in business in Kerala, there is no evidence that labor disputes seriously stressed the company. The company was in control of the situation in Kerala. In contrast, it was powerless in Calcutta, where “labour is even less disciplined than before,” and striking workers made commercial operations at the port impossible on many occasions in the late 1960s.Footnote ⁷⁷

Strains came from a source outside the state. From the 1950s, export-oriented plantations faced mounting pressure as new rules made it harder to hire foreign staff, buy or sell property, repatriate profits, or work through managing agencies. The estates were already losing expatriates because remittance was harder to organize, and the rupee was losing value.Footnote ⁷⁸ Exchange rate overvaluation and import licensing repressed exports and delayed modernization in tea estates.

The records from the 1950s and 1960s reveal no particular anxiety over potentially adverse changes, such as the threat of a left-led land reform. Land reallocation in the high ranges had for decades worried the company, but it was not a vital issue.Footnote ⁷⁹ The company remained consistently profitable and made significant gestures to demonstrate its credentials as an Indian and Kerala-based firm. During the 1962 China War, the company made donations to the Indian Defence Fund, and donated money to the University of Kerala and the Trivandrum Tennis Club. With its South India assets still productive, London marketing in place, the Clan Line still in operation, and new contracts signed with a new set of shippers, the company in Kerala had no reason to feel overstressed. By almost entirely Indianizing top management, it was saving money in the 1960s. In 1973, it shared the news that Peirce Leslie shares were selling well below par, and some of its employees were seeking jobs elsewhere, wondering if Harrisons and Crosfield should consider taking over the beleaguered trading firm’s shipping agency.Footnote ⁸⁰ Calcutta quietened in the mid-1970s. A new government prohibited strikes (January 1973). And tea companies were back in business.

A storm broke soon after. About halfway through Indira Gandhi’s prime ministership (1966–1977), politics in Delhi started to turn hostile toward foreign firms.Footnote ⁸¹ Press cuttings from the 1970s sent to London contained harsh media campaigns against sterling companies. The Enforcement Directorate raided foreign companies allegedly over-invoicing imports or trying to transfer shares. The Reserve Bank imposed restrictions on reserves, commissions, and dividend payments, resulting in many employees and buyers’ agents being denied payment of their dues.Footnote ⁸²

In April 1973, a Joint Parliamentary Committee debated further control of foreign companies. The report, along with seven dissenting notes, supported a general plan for a new regulatory law. The goal was clear: the “drainage of exchange” caused by the “nefarious activities of foreign controlled companies through expansion and diversification” must end.Footnote ⁸³ In September 1973, Minister of Finance Y. B. Chavan promised “severe restrictions on foreign trading and commercial concerns.”Footnote ⁸⁴ Towards the end of 1973, the Foreign Exchange Regulation Act (FERA) came into force. It mandated that foreign companies transfer at least 60 percent of their shares to Indian ownership and prohibited them from borrowing in India. Sterling tea firms had to register in India but were allowed to retain a majority holding, provided they committed to meeting the export targets set by the government. Sri Lanka, and “even Pakistan,” the Parliamentarians noted, had introduced similar rules.

In 1977, Harrisons and Crosfield (India) Ltd. was created to manage plantation operations. Malayalam Plantations soon became a limited company. However, the Indian government ruled that, due to its substantial rubber holdings, the firm did not qualify as a tea company, and it was required to reduce foreign ownership to 40 percent. In 1984, an amalgamated entity called Harrisons Malayalam was formed, with 40 percent held by Harrisons and Crosfield PLC and the remaining 60 percent by the Indian public. But the wound was too deep for sticking plasters. In 1988, the firm sold its way out of India.