By Kasturbhai Lalbhai
Note: This article was originally published in year 1940. Here’s its reproduction.

The rationale of the development of the Textile Industry at Ahmedabad is difficult to comprehend at the first thought. Ahmedabad does not have any of the advantages, usually associated with a big industrial centre. Unlike Bombay, it is an inland town, without the advantage of even a large river. Unlike Cawnpore(Kanpur) again, it is not situated on the foci of railway lines. The land around it is rather dry, and excepting the south, salt marshes are not far away. It is not even endowed with good or favourable seasons; the winter is cold, while in summer scorching winds sweep over its soil of loose dust. Generally, the monsoon is not kind, but even when the rain clouds burst, its soil is too parched to glisten like the mellow earth of the Northern plains. Altogether, Ahmedabad is not a place in which an industrial pioneer would have placed his faith.

And yet, to a person with an eye for the preserving spirit of the people, this place had obvious advantages. It is situated on that borderland between the deserts of Marwar and the fertile plains of Gujarat, where people cannot forget that life is a continuous hard struggle, and still cannot but realise that life is not all bitterness. It has therefore a happy ensemble of temperament. It has a firm grip on the problems of life, with a dominant
common sense to spot advantage even at a distance. On the other hand, it is sufficiently cautious not to be carried away by nimble imagination. As events have proved, it is an ideal temperament for an old industry like the Textiles. It does not require the bold vision of a Tata or a Ford, nor does it require the gambling instinct of a Rockfeller. Its prizes are quite certain, and it can be started in a small way. But it requires an inflexible perserverence, an unflinching attention to each process, and unflagging effort to pass to perfection from one stage to another. In Textiles, one therefore never awakes to success; one works on to it, and if there are any people suited by nature to do it, they are the people of Ahmedabad. Consequently, like good artisans, they have forged one stage after another to their present greatness.

The first step in this process was taken by Rao Bahadur Ranchhodlal Chhotalal, C. I. E., who founded the Ahmedabad Spinning Mills in 1859. This decision was opportune in several ways. The old conventional society was beginning to show the signs of a break-up under the stress of the more powerful Western Civilization, and as handicrafts were disappearing, a floating supply of people had begun to come out to sell their services. At the same time, the Hand-loom Industry was still holding its own position, and there was a fairly large market for the supply of the yarn. Abmedabad was also getting linked to other centres by the development of the Railways, thus making it possible to reach more distant markets. Thus, the birth of the Ahmedabad Textile Industry was marked by the modest beginning of a small spinning mill, and during the next fifty years that followed, as conditions were found favorable, one by one, more mills were added, and the character of the production changed. The disappearance of the yarn trade of China between 1908 and 1912, convinced the people of Ahmedabad that a greater future lay in supplying cloth instead of yarn. All the development was however characterised by one dominating influence. Ahmedabad had no desire to venture into the unknown to seek out markets, which were not under its direct eye. Consequently, while first its zone of operation embraced only Gujarat and Kathiawar, and later on extended to other parts of the country, it catered for the coarse and heavy stuff, which was not sufficiently interesting to Lancashire and which was sure to be taken up by the poor sections of the country. Gradually, it acquired a strong hold over the market, but its success was so unassuming that it struck no one in the eye. Till almost the outbreak of the last War, the existence of the industry did not count either in economic or political matters, and at best, it was considered a provincial industry, useful but not striking, and managed by people who appeared to be clever in their small way, but too commonplace to compel admiration.

It was the World War of 1914-18 and its aftermath which helped the Ahmedabad Textile Industry to its second stage of progress. The stoppage of the supplies from Lancashire was a godsend to it, as it knew its markets and already had an extensive organisation to serve it. Having had no export trade outside India, whose loss would be embarrassing for the moment, it could concentrate all its energies on the Home Market, which it did, with such success, that it fairly entrenched itself in. the trade in medium-priçed Sucis, Dhoties and Shirtings. Simultaneously, it laid the foundations of a future and a greater success. Even though the people found that over-night they were able to secure incomes, which could not have entered their wildest imagination earlier, true to their traditional make-up, they did not lose their grip on the essentially temporary character of the phenomenon. While their standard of living did not remain entirely unaffected, much the major part of what they earned they saved, with the result that after the frenzied period was over, not only were the people themselves moderately rich, but the mill companies also could show enviable reserves. Again, on account of the hereditary element in the Industry, the higher earning power or the larger reserves were not cashed by overcapitalization, and in the face of overwhelming temptations, scarcely any mill changed hands. In this way, the War converted the mills and the agents into powerful industrialists. Still, in keeping with traditional policy, this success was achieved so quietly that even competent observers failed to notice that Ahmedabad was destined to play a very important role in the near future.

The period following the War was one of intense political ferment. For the first time, Ahmedahad began to take interest in these movements, directly through its representative in the Assembly, and indirectly through its well-to-do middle class people, and came to be considered as a factor to be counted. Then came Protection and the Swadeshi Movement. With its well-filled reserves, with its extensions and improvements of machinery, and with its wide market organisation, Ahmedahad was ready to take an advantage of both these movements. In this, it was not hampered by labour troubles, as with a characteristic genius, it had already evolved a machinery, which assured satisfaction to both Labour and Capital. So, it had an uninterrupted period of expansion, both regarding Working Units and the consuming markets, till in 1935, it could look back and say that in Textiles, it was leading the rest of the country. No less than the Secretary of the Manchester Chamber of Commerce, wrote the following remarks in this connection:

“If this is the Manchester of India, then all Manchester (the original) can do is to offer admiring and congratulatory salutations.”

It may be remarked that this would only show that Ahmedahad has been more fortunate than other centres, but that would not be correct. Industrialists at Ahmedabad have made the best use of their chances, like other businessmen, but they have not depended on them. On the contrary, they have always been ready to meet any change in the technique of manufacture, or the demand of the market by a constant transformation, and renovation of the industry. In this, they have been certainly helped by their large reserves, but two other factors have contributed more. It is the traditional Ahmedabad practice, to start with a small unit, and then expand it as circumstances permit. This offers them many more chances to review the imperfections and to correct them than could be had by another industrialist, who gets committed to a process or machine at the very first instance. Again, it is usual in Ahmedabad to make an ample provision for renewals and repairs, out of which there is a continuous replacement of the older machines. Thus, all along the line, a ceaseless change is always going on, so that without any obvious efforts or unusual spurt of activity, it transforms the technique and the character of the industry, and endows it with a resilience to maintain its position in the flux of circumstances.

In this way, Ahmedabad tried one system after another, to get over its extreme changes of the weather, and it can now be said with confidence that though its practices in humidification and ventilation do not compare anywhere with such practices in the U.S.A., its experience has enabled it satisfactorily to surmount this dificulty. To-day, a major part of the Ahmedahad Mills are equipped with Carrier Plants, and one or other system of humidification. Similarly, in the matter of power, unendowed with any cheap Hydro-Electric supply, it replaced the older engines with turbines, and later with Diesel Engines. In Spinning, Ahmedabad did not start with any mules, but in Ring Spinning it has always sought out the improvements, till today, no other centre would have so many spindles on the High Draft System. High Speed Winding and Warping are generally unsuitable for higher counts, but here again, by perseverance, it succeeded and scrapped the older machines. Simultaneously with this, it has also been changing the quality of manufacture. Starting with the coarse yarn and cloth it has been gradually going fine, and has equipped itself for the task. Ten years back, probably, there were no Combers, while today, no mill doing fine counts will do without them. About 1920, it started bleaching its goods, first with the help of country Dhobis, and then with the machines, and within a short period, penetrated into the trade in ‘Whites’, which was so far considered a speciality of Lancashire. This change has been remarkable both for its rapidity and its extensiveness, as, to-day Ahmedabad is the leading centre in India for the manufacture of bleached goods. More recently, it has extended its operations into the trade in printed goods, almost the only trade in which India still imports large quantities from foreign countries, and is working its way to it with its usual thoroughness. While, therefore, before the War Ahmedabad could offer only coarse and heavy cloth, to-day it has a wealth of textures, designs and colours.

Running through this transformation, there is a remarkable continuity of design, which perhaps would not have been possible, but for the system of management in Ahmedabad. The Managing Agents in Ahmedabad were primarily merchants for generations, before the coming of the Textiles. They were leaders in their own profession, and had amassed a considerable wealth. When they, therefore, took to the Textiles, they brought with them a rich inheritance of family traditions, which, while conservative, Was also tinged with the basis of human charity. Being possessive, it considered the mills as a family trust, which was to be conserved and handed over to the next generation. Being humane, it kept an eye on the more permanent aspect of the problems that it had to face. While it cannot be said that the Managing Agency system has no faults, the survival of these traditions has overwhelmed them, and contributed in no mean way to the present success of Ahmedabad. It has secured for the industry an identity of interest and purposiveness normally absent from corporate management.

It has also secured a management which is ever watchful and which is never tired of work. Altogether, it has so influenced the ideals of management, that, even to a casual observer the methods and practices followed at Ahmedabad appear different from those elsewhere, and the industry as a whole seems to be placed in a setting of its own.

This impression is strengthened by certain other factors. One of them is the peculiar method of financing the industry. The usual method is to raise sufficient share capital to meet all the expenditure, or to make up the deficiency of the share capital by Bank loans. In Ahmedabad, on the other hand, the share capital is usually small, and the major part of the outlay is financed by deposits from the agents, their relatives and others. One great advantage of the system is, that it enables the plant to have a gradual expansion, with a comparatively cheap credit. It is obvious, however, that the system has disadvantages, and it cannot work in a centre where depositors do not have absolute confidence in the people to whom they entrust their money. It is, therefore, to the immense credit of Ahmedabad, and particularly, to its Managing Agents, to have inspired and retained this trust, inspite of the continuous changes in business conditions. It is also to their credit that there have been few occasions, when the depositors have been deceived in their trust and have lost their money.

The other distinguishing feature lies in the relations between Labour and Capital, which have received praises even from the Secretary of the International Labour Office at Geneva. Ever since 1917, both the Labour and Capital have come under a strong influence of Gandhiji, and though it cannot be said that they have fully imbibed the ideals of Gandhiji, regarding the Trusteeship of the industry, they have learnt sufficiently by his teaching and their own experience, to realise that only evil can come out of industrial strife. So, an elaborate machinery of arbitration has been devised both for major and minor issues of differences between Labour and Capital, whose one aim has been to avoid strikes or lockouts at any cost. Naturally, the result has involved compromises on both the sides, and as such, has not always been of a type that would please a finical theoretician, but it has certainly succeeded in avoiding strife. Its more positive contribution has been towards the development of a new outlook on the relations between Labour and Capital, -an outlook which believes that the future of the production of wealth lies in an integral partnership between Labour and Capital. As there have been no strikes of any magnitude since 1917,-excepting the one in 1923 lasting for about ten weeks,-even if Ahmedabad had made no other contribution to the industrial growth of the country, this approach to industrial peace is enough to deserve a creditable mention in the history of any country.

Discovery of Gujarat Series
– DeshGujarat
Note: This article was originally published in year 1940. Here’s its reproduction.

Editor’s note: The article was written in 1940, but even today many values mentioned in this article form core part of industrial ethics/atmosphere in Gujarat – (1) dominant common sense to spot advantage even at a distance, (2)the traditional Ahmedabad practice to start with a small unit, and then expand it as circumstances permit, (3)lot of saving going together with lot of earning, (4) difference between Ahmedabad and elsewhere when it comes to the methods and practices followed for management, (5) new outlook on the relations between Labor and Capital, (6) understanding that only evil can come out of industrial strife, (7) Gandhiji’s strong influence over the Labour and Capital, (8) the peculiar method of financing the industry found here…… these observations made by late Shri Kasturbhai are very much relevant and present even today. In one para Kasturbhai observes, “Industrialists at Ahmedabad have made the best use of their chances, like other businessmen, but they have not depended on them.”

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