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Labour in Jamshedpur– The Other Side of the Picture

Updated: Sep 17, 2023

This Article was written by Subhash Chandra Bose and was published in the THE MODERN REVIEW FOR FEBRUARY, 1936.


Tata Steel Workers' Strike, 1928


The article from the pen of Mr J.L. Keenan, the General Manager of the Tata Iron and Steel Works of Jamshedpur, in "The Modern Review' for December, 1935, is interesting for more reasons than one. It is interesting for the digressions from the steel-making into the domain of historical and sociological research-interesting for the placid self-complacency which inspires the writer-interesting also for the many contradictions in which the article abounds.


A word about historical and sociological matters. When Mr Keenan talks about steel-production, he is on solid ground and his self-confidence is an asset. When he digresses into the thorny domain of Ancient History or sociology, his self-confidence becomes a handicap. Says Mr Keenan: 'He (J.N. Tata) realized that India from the time of Manu was condemned to be a country of capitalists and slaves' (p. 705). It is a truism in economics that capitalism is a recent growth in consequence of the advent of large-scale production. How there could have been a capitalist order at the time of Manu and after, passes my comprehension. Even landlordism as we see it today in India is a recent growth. Further, even the state in ancient times did not amass wealth-the prevalent idea being that the state (whether monarchy or a republic) should give everything to the people. A typical example of this was King Harshavardhana. who emptied the Royal treasury once in five years.


Then Mr Keenan goes on to say: "We (Tata) know that in India before his time the mere name of a labourer must be expressive of contempt' (p. 705). If Mr Keenan has used the word 'labourer' in the sense of artisan, he is mistaken. The artisans in the Indian village economy-whether carpenters or blacksmiths or potters-were never looked down upon with contempt. They were indispensable elements of the village economy and their sable elements of the village economy and their relations with the rest of the village population were perfectly friendly and cordial. Labourers in the sense of industrial proletariat are an excrescence of capitalism and not an Indian phenomenon as such. If labourers (industrial proletariat) are looked down upon in India, similar is the case in other countries. I have heard from Indian apprentices in European factories that the gulf which separates workmen from officers in European factories is very wide.


Mr Keenan is also wrong when he goes on to say 'that a labourer was a rule forbidden to accumulate wealth and, though he was a slave, even if his master gave him freedom, he was still a slave' (p. 705). I wonder from where Mr Keenan culled this valuable piece of information. We know, on the contrary, that in India low-born people often rose to the highest positions by dint of their personal qualities. If we investigate the past history of some of the present Maharajah and landed aristocrats, useful information can be collected in this connection. I may also point to examples like that of the alleged Kaivarta Kings of Bengal, who came from a so-called low stratum of society.


The distinction, between 'Labour of Necessity' and 'Labour of Progress' which Mr Keenan has drawn is artificial and if I may say so, fantastic. Even in ancient times, all labour was not labour of necessity. People did not work only for hunger, nor did they always get starvation wages. Most people worked partly because of hunger, and partly because of the pleasure in working; and it is too much a to say that labour in the good old days was always sweated. The huge monuments of art that still live-Mohenjo-Daro, Harappa, Taj Mahal, Madura, Kanarak-do they not represent labour of progress as well? It is true that industries in the old days did not pay huge dividends as they sometimes do now. But we have to remember that huge dividends are exclusively the product of the industrial revolution-that is of large-scale production. Moreover, this phenomenon of huge dividends can hardly be called an advantage or an achievement. Thinking men everywhere are now coming to admit that the evils resulting from industrial capitalism are due largely to the accumulation of wealth in the hands of a few, and to abnormally large dividends which are gathered either at the cost of sweated labour or at the cost of the exploited consumer in colonial or semi-colonial countries.


Mr Keenan transgresses the limits of decency when he refers to President Roosevelt 'assisted by a group of asinine Professors' trying to find a way out of the present depression. I do no hold any brief for President Roosevelt nor does the noble President stand in need of it. But is there anyone who can deny that the biggest experiment to end unemployment and depression that is going on in the world today outside Russia is in the U.S.A.? I would refer the writer to the excellent treatise written by Mr H.G. Wells, The New American in the World, in which he discusses the American experiment and compares it with the Russian. Incidentally Mr Wells refers therein to the question as to why President Roosevelt sought the help of some professors, whom Mr Keenan in his self-complacency calls 'asinine." Possibly what has annoyed Mr Keenan is that President Roosevelt is laying his hands on the large dividends with a view to dividing them, in part at least, among the exploited proletariat and that he (President Roosevelt) maintains that the employers should recognise organized trade-unions and treat them as equals.


Mr Keenan is not only self-complacent, he is more. He says that 'as far as making steel in India is concerned that Company (Tatas) has ended the depression in that trade and I think that Company should be proud of this fact' (p. 707). But let me ask Mr Keenan what after all, 'ending depression under a capitalist system' means. It means finding more markets and also sufficient capital to keep a concern going until more markets are found. The Huge bounties given by the Indian people through the Government of India in the lean years helped the Company to keep going until more markets or orders could be found. That the Company today is able to make more profits is due to two factors: firstly, the duties imposed on foreign­­­–especially continental–steel, which make it possible for the people to patronise Tatas, and secondly the orders directly placed by the Government of India with the Tata Iron and Steel Company. It is therefore the people and the Government of India who are really responsible for ending the depression in the steel trade–if really it has ended. Mr Keenan has not a word of thanks for either of them, though he congratulates the Company, and therefore self, for the recent improvement.


I happen to know something about Tatas since September,1928, and I should like to enquire if the Tata Iron and Steel Company would have been alive today but for the heavy state bounties which kept the Company going during the lean years and provided the fat salaries for the covenanted officers at a time when thousands of workmen were thrown into the streets, without unemployment, dole, or insurance benefit. I should also like to enquire if the Company would have been able to end the depression, as the General Manager claims it has done, without the aid of the heavy duties levied on imported steel and without the sympathy and support of the public and the Government of India. The confusion of thought which the writer shows in some places is pathetic, and makes one wish, that he would devote more attention to the study of economics than to history and sociology. Here is a specimen of his reasoning: 'in 1929 and in 1930, our monthly staff with the exception of a few whom you could count on the fingers of two hands, were "labourers of progress." The Steel Company earned dividends last year and this Steel Company, rightly, paid their "labourers of progress" a reward for their extra effort which they had put forth’ (p. 707). A perusal of the above would lead one to think that the financial improvement of the Company was due to improvement in the work put forth by the employees in 1931 and after. The fact is that the financial improvement was due solely to the larger orders secured by Tatas, as explained in the previous paragraph. If one were to go round and examine one employee after another, one would not find any difference between his work in 1929-30 and his work in 1931-33. I clearly remember that in 1929 and 1930 the General Manager used to complain of lack of orders which forced him to reduce wages–to order sweeping retrenchment and to shut down certain department of the Tata Iron and Steel Company in Jamshedpur.


The writer remarks in one place as follows: 'At the present time, in my opinion, due to economic factors, the entire labour of the steel world, with the exception of the labour in the Tata Iron and Steel Company Ltd., have forgotten that they are "Labour of Progress" and they are "Labour of Necessity"... There is nobody in the United States of America today, in my opinion, at least in the ranks of Labour, who are attempting to get out of the category of "Labour of Necessity" There is no doubt that each and everyone of us realise that we have had a depression from 1928 until 1933 in India. The same depression exists in other countries. The Tata Iron and Steel Company, in my estimation, is the only company in the steel trade which has advanced (pp. 706-7).


The above statements would lead one to expect that Jamshedpur has become a paradise for steel workers-an object lesson for steel companies in other parts of the world. But what are the facts? Earlier in the article the writer states that American steel workers are the best paid in the world. Quoting a report of the American Iron and Steel Institute dated the 30th January, 1935, the writer says: 'American workers …earned an average of 64.7 cents an hour in November 1934... The Japanese wage rate was 9.7 cents per hour and in India 8.6 cents per hour in 1933." (The figure for European countries are in the neighbourhood of 25 cents per hour.) If the average for India is one-eighth of that of the United States of America and if the Tata Iron and Steel Company is by far the biggest steel industry in India, I think the General Manager of Tatas should hang his head down in shame instead of indulging in meaningless bragging.


That the writer was conscious of his company's shortcomings when he first sat down to write is clear from the following remarks on p. 705: "We think we are doing good work; we brag about our hospitals; we boast about our wages paid, but do we stop to think and make a comparison between India and Europe or America? I certainly can state that we do not... We must compare the emoluments we pay our workmen with the wages that are paid in Europe."


I shall now come to the more serious charges that can be levelled against the Tata Iron and Steel company. These charges are under the following heads:


1) Their attitude towards Indianization.


2) Their inefficiency in the matter of checking wastage.


3) Their attitude towards Labour.


I should preface my remarks under the above three heads with the statement that the Directors of Tatas always claim that theirs is a 'national' industry and on this ground they have taken the fullest advantage of the sympathy of the unsophisticated public. But I shall presently show that Tatas' concern in Jamshedpur is much less 'national' than even the textile mills of the Indian industrial magnates for whom 'nationalism' or 'patriotism' is often a convenient excuse for robbing the public.


When the Steel Company was first started about 25 years ago, a large number of foreigners, mostly Americans and Britons, were appointed to the higher posts on a covenant. They were given princely salaries with equally princely bonus-and I know of cases in which the bonus was even higher than the salary and was independent of production or profit. If I mistake not, the General Manager himself draws Rs 10,000/- a month-equal to what the Governors of the major provinces in India get. The public were given to understand that as soon as a sufficient number of Indians would be trained, they would take the place of the covenanted officers. This promise has not been redeemed. Between 1928 and 1931, we made repeated requests for Indianisation but without much success. The position today is that in many departments Indians are doing the same work as covenanted foreigners but at half or one-third the total emoluments enjoyed by the latter. Moreover, during this period, when I was in close contact with the General Manager, I complained that the contracts of several covenanted officers were being renewed for a further period, though there were competent Indians to take their place–but to no purpose. If an impartial investigation were made today into the number of foreigners employed at Jamshedpur and the emoluments they draw–the Tata Iron and Steel Company would stand condemned.


Tata Iron and Steel Company is undoubtedly a very big concern and therefore there should be very close supervision in order to prevent wastage. But on this point, too, the situation is far from satisfactory. The Directors are all absentees and have very little knowledge of the inner working of the concern. They are all busy men with several irons in their fire and have not even the desire or leisure to know more of the working of the Jamshedpur machinery. The result is that the actual working of the vast machinery is left in the hands of foreigners who have no responsibility to anyone except the absentee Board which is entirely under their thumb. I first realized the helplessness of the Board when I had to discuss the terms of settlement on behalf of the strikers in September, 1928. If on any point the General Manager said 'yes,' the Board would consent. If, on the contrary, the General Manager said 'no'–it was also 'no' from the Board.


That a settlement did take place after all was due to the fact that the then General Manager, Mr Alexander, felt disposed to welcome it. Not long after settlement, I once suggested to the Chairman of the Board of Directors that he and the Board should have more contact with the workmen and for that purpose, it would be good for him to go round the works without being chaperoned by the Company's officials. The Chairman seemed agreeable to my proposal but my suggestion could not be given effect to, because the General Manager was opposed to it. Nevertheless, the Board began to realize their position, I think, because not long after that, they sent one of the Directors to Jamshedpur–and later on to Calcutta–to act as a liaison officer between the Board and the Management. Since his appointment, there has been some ad ministrative tightening-up in Jamshedpur. And in Calcutta and elsewhere most of the papers have been won over with the help of advertisements, with the result that today one finds very little criticism of tata Iron and Steel Company in the nationalist press. But the real trouble–viz., wastage and inefficiency–continues.


The above-mentioned Director is an ex-I.C.S. and an able administrator–but he lacks technical knowledge without which it is impossible to force the hands of the Management. One of the results of this is that in the matter of Indianisation the progress so far made has been unsatisfactory. There are any number of covenanted officers whose places could easily be filled up by competent Indians, at a much lower rate of pay. I have quoted above the-average Indian wage-rate as being 8.6 cents per day for the year 1933. But if we exclude the highly paid foreigners, there can be no doubt that the average would fall much lower.


The top-heavy administration represents, however, a small item in the wastage that has been going on in Jamshedpur. If one would go over the stores department and see the amount of capital lying uselessly idle there, and would also examine the annual orders that are sent out for machinery, spare parts, etc., one would have some idea of the wastage that goes on in Jamshedpur. About 7 or 8 years ago, the services of the Indian Chief Electrical Engineer–one of the most popular officers of the Company–were suddenly dispensed with and a foreigner was imported in his place. Then followed a period during which wastage took place in the Electrical Department owing to faulty and unscientific methods of handling. Fuel-consumption is another important source of wastage. For a huge concern like Tata Iron and Steel Company, it is absolutely necessary to make use of the latest scientific devices for reducing fuel- consumption and also to carry on continuous research in this matter. But Tata Iron and Steel Company are backward in this respect. It is because of wastage combined with top-heavy administration that the Tata Iron and Steel Company cannot stand on its own legs and must always depend on the state for either bounties or protective duties. In a country where labour is so cheap. any well-organized steel concern should be able to maintain itself without being spoon-fed by the state. There are independent concerns in Jamshedpur which buy raw materials like scrap-iron (or electrical power) from Tatas and make a profit out of their products, only because they avoid wastage and top-heavy administration.


The last–and to our purpose the most important point to which I shall refer is the attitude of the Tata Iron and Steel Company towards labour. The first trade union was organized in Jamshedpur in 1920 and by that time so many grievances had accumulated that the years 1921-22 witnessed serious labour trouble there. About this time, the late Deshbandhu C.R. Das's sympathy was drawn towards the Jamshedpur workers and as long as he was alive, he gave them the fullest support. But this support was of no avail until the Swaraj Party emerged as the most powerful element in the Indian Legislative Assembly in the 1923 elections. Deshbandhu Das was joined by Mahatma Gandhi and Pandit Motilal Nehru and Tatas then found it necessary to come to terms with these nationalist leaders because the Assembly would soon consider the question of a state-bounty for Tata Iron and Steel Company. Tatas then agreed to recognize the trade union (called the Labour Association), to collect the union subscription on payday and generally to ameliorate the condition of the workers. For some time, the position of the workers saw a decided improvement but after the death of Deshbandhu, things began to grow worse again.


Deshbandhu's place was taken by Mr C.F. Andrews who kept the flag flying with the moral support of the Congress Party in the Assembly–but the unsympathetic and callous behaviour of the Company's officials led to a serious strike in 1928. Since then, the Company's attitude towards labour has been one which would be worthy not of a 'national' industry but of the worst bureaucratic Government. My connection with Jamshedpur labour began in August 1928, when the strikers and their leader, Mr Homi, put irresistible pressure on me to espouse their cause. When the Company found themselves in a very difficult situation as a result of my joining the strikers, they agreed to accept the demand of the workers but only on condition that the Company did not have to negotiate with Mr Homi, against whom personally, they said, they had many grievances. Mr Homi at first agreed to stand out if a settlement helpful to the workers could be arrived at thereby. But when the settlement was actually drawn up and ratified by the workers at a mass-meeting, he changed his mind and set up a new organization to oppose the settlement.


Soon after the settlement the Company refused to give effect to some of the important terms, as a result of which a large number of the workers went over to Mr Homi's party. For a few months the Company refused to recognize Mr Homi's organization but one fine morning their tactics were changed. Their erstwhile enemy Mr Homi was invited by the General Manager, and his organisation was recognized. The old organization, Labor Association, was ignored and those who had drawn up the settlement and had stood loyally by it were left alone. After some time, the scene changed once again. Prosecution was launched against Mr Homi under various charges, and he found himself in prison; with the disappearance of Mr Homi, his organization became a shut-up shop.


The withdrawal of the Congress Party from the Assembly in January, 1930, led to a definite stiffening of the Company's attitude towards the workers. After Mr Homi's imprisonment, whenever a worker's meeting was held, a band of goondas armed with sticks and other weapons would appear on the scene and break up the meeting by force. In 1931, I was presiding at such a meeting which was broken up in this way and I can therefore speak from personal experience. This situation continued for some years and even in 1934, things were so bad in Jamshedpur that during a visit to that town, Mahatma Gandhi was constrained to remark in a public meeting that he was 'grieved to learn that the issues between the employers and the employed were being settled at the point of the lathi.'


It can be alleged on behalf of the workers that since 1930, the Company has been following a ruthless policy towards them. Recognition was withdrawn from both the workers' organisations–the collection of subscriptions on pay-day was discontinued and employees connected with the trade-union movement were either victimized or transferred to places far away from Jamshedpur. In January, 1934, when the local Government officials in Jamshedpur prosecuted a gang of about 40 goondas, high officials of Tatas were found to take interest in the affair for settling the matter out of court.


The climax was reached in 1935, when the Company served a notice on the Labour Association demanding arrears of rent for 4 years for the premises used by the Secretary and by the office though 4 years ago, a clear understanding had been arrived at between me and the Managing Director, Mr Dalal, that the Company would waive their claim for rent. The Company thought that the Association would not be able to pay and could thereupon be ejected and since all the houses in Jamshedpur are virtually owned by the Company, the Association would cease to exist for want of a habitation. The Secretary of the Association went so far as to offer to pay rent in future and also to pay the arrears by instalments-but the Company refused to accept any compromise, proving thereby that what they really wanted was not rent, but the liquidation of the trade-union organization in Jamshedpur.


The Company were going on merrily with their game when suddenly the Congress Party decided once again to enter the Indian Legislative Assembly. The Company knew from experience that two or three M.L.A.'s were in the habit of raising inconvenient questions about their treatment of labour, and they felt it advisable to change their tactics once again. A new group called the Metal Workers' Union, thereupon came into existence under the Company's patronage and the workmen in the factories were ad vised by the officials to join this group. This group is still in the good books of the Company, and one of its principal activities is to give tea-parties to Government and Company officials and to wait on deputation on the General Manager. The object of this new policy on the part of the Company is to show to critics in the Assembly an elsewhere that Tata Iron and Steel Company do not suppress all trade-union activity.


I have dealt at length on the attitude of the Company towards organized labour and shall now say a few words about their treatment of the individual workers. I have before me a printed copy of the memorandum submitted by the Metal Workers' Union (which in Jamshedpur is called a 'Company's Union') to the General Manager which contains the following remarks:


"The service conditions of the majority of the workers employed in the Tata Iron and Steel Company are not sound as many of them are given notices of discharge, compulsory leave, etc., without sufficient consideration. For example, the workers of the old Rolling Mills who have long service with the Company and who have contributed towards bringing the Company to the present position it occupies among its sister industries... are laid off on compulsory leave…


The Company recently started a policy of employing men "temporary" and it is interesting to note that this "temporary" has no limited period. Cases of such men who have put in more than two years of service are not uncommon. By this, the Company is able to save a good deal by non-payment of bonuses and non-extension of privileges according to Works Service Rules, Provident Fund, etc., which can be enjoyed only by permanent employees…


Suspension of a worker from his duty extending to weeks is common. In spite of several rulings of the Management to afford a chance to the worker to defend a charge brought against him, the rules are either not followed in several cases, or prompt attention is not paid to the explanation submitted by the party Similar remarks would apply to such other exemplary punishment such as reduction of salaries…


There is no regular system by which employees can get promotions and increments in their wages. For some time past it has become a policy of the Company to abolish as far as practicable higher-rated posts, when vacant and lower-rated men are made to undertake the extra work without adequate compensation…


While we appreciate the spirit of encouragement underlying the Bonus schemes, we feel it has been restricted only to some workers. Then again a distinction has been made between Operating and Maintenance Department in respect of Departmental bonuses…


The system of weekly paid labour was introduced when the Company was in need of men to do some seasonal work. But for some time past we find weekly labour is employed in permanent force in certain departments whose total number at Jamshedpur comes to about 5000 (including both male and female labour) thus forming about 20 per cent of the total number of employees. Most of such employees have already put in service of over 5 years. Most of such weekly paid labourers get rates varying from 5 annas to 8 annas per day. According to the following statistics showing the minimum of expenditure for a family of 5 members as shown in the Report of the Royal Commission on Labour, it will be clear that the cost of living at Jamshedpur is by far higher than that of the two places quoted-Sholapur and Ahmedabad...’ (Then follows the statis tics showing that the monthly expenses in Sholapur come up to Rs 37-13-11 and in Ahmedabad to Rs 39-5-8. But 5000 Jamshedpur workers get a daily wage varying from 5 annas to 8 annas.)


In view of the above statements made-not by hot-headed agitators-but by a loyal 'Company's Union,' may I ask Mr Keenan how many 'labourers of progress' there are in Jamshedpur? I am afraid that excluding the General Manager and the covenanted officers, very few Indian employees could be classified as 'labourers of progress.'


The only portion of the article for which I feel thankful is where the writer refers to the appalling condition of the workers in the Tata Mines. I do hope that with the sympathy of Mrs Keenan behind him, the General Manager will be able to bring about an increase in the wages of the poor mine-workers.


The writer has evidently referred to the iron-ore mines only. But what about the coal mines? A few years ago when I was working as the President of the Tata Collieries Labour Association I happened to look into the conditions in the Tata coal mines. At that time some mines were being closed down, and thousands of workers were being thrown out of employment. We naturally wanted the mines to continue working, but two arguments were urged by the Company in opposition to our demand-firstly, that the Company had long-term contracts with some collieries, and after taking this supply, the Company did not require an additional supply from their own mines; and secondly, that the cost of production in the Company's mines was rather higher as compared with the prevailing market rate.


It is difficult for an outsider to understand why the Company went in for long-term unprofitable contracts and at the same time invested capital in buying collieries. Firstly, it was wrong to go in for long-term unprofitable contracts. Secondly, if they did go in for them, they should not have bought any collieries. Thirdly, once they started working these collieries, they should not have shut down-because it costs a lot of money to keep mines in proper order when they are not working. Fourthly, there is no reason why they should have had a top-heavy administration in the Collieries Department also-and thereby put up the cost of production. The result of all this inefficiency is that the people and the state have to pay for the sins of the Company and the Indian workers have to be content with low wages.


If Tata's employees at Jamshedpur are to become 'Labourers of Progress' then the top-heavy administration has to be rectified, the covenanted officers have to be got rid of and wastage and inefficiency have to be eliminated. The paltry bonus thrown at a section of the ill-paid Indian employees for their last year's work does not appreciably alter the position of the workers in Jamshedpur, not does it entitle the Company to claim that they are better employers of labour than any other.


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