The early stockbrokers
Even as the Madras Stock Exchange heads towards its 75th year, one of its founding members, Paterson & Co., is celebrating its 75th year, I'm reminded of both because, as I had expected, M. Amarnath, CEO of Paterson's, came through with more information about one of the pioneer stock broking firms in Madras, Huson, Tod & Co., to whom I had referred in Miscellany on August 16.
Tod & Tod, a firm dating to at least 1892, is listed in 1903 as dealing with Government securities. A few years later, the directories list Scott & Tod as brokers doing business in stocks and shares. Shortly before the Great War, the name of another firm of brokers is found, Huson and Robinson. And by 1919, soon after the end of the War, the two firms had merged as Huson, Tod & Co., who appeared to have almost a monopoly of the business.
In April 1920, Madras's first stock exchange was founded with about 100 firms on its rolls, though only a quarter of them were major players, with Huson & Tod leading the pack.
But with the Great Depression, all the firms began to suffer. By 1926, only two were still in business, Huson & Tod, in the old Chartered Bank building (now renovated on NSC Bose Road) and Kothari & Sons in a building now occupied by the Central Bank on Broadway.
By the early 1930s, the Great Depression, overtrading and speculation affected the market severely and Huson, Tod & Co found itself in trouble. Hubert Hadow (was Haddow's Road named after him?), a partner of the firm, was in England at the time and he, demonstrating great principle, liquidated his assets there to meet the liabilities of the firm.
It was a gesture that earned even the appreciation of Justice J. Mockett in his judgment in Madras ordering the liquidation of the firm in 1935. Huson, Tod closed down, even though in the previous year it had made a profit of Rs. 90,000.
R.C. Paterson, an assistant at Huson, Tod's at the time, a firm with which he had worked from the time of his arrival in Madras in 1926, took over the business of Huson, Tod with the backing of the Chartered Bank and established in September 1935 Paterson & Co, a firm which to this day is one of the leading stock broking institutions in South India.
When the Madras Stock Exchange was registered on August 12, 1937, Paterson's, Kothari's and three others were the founding fathers. Eighty-four companies were listed on the Exchange, besides Government and other securities, when trading began.
When Paterson retired from the firm in 1951 to join Consolidated Coffee, K.S. Vaidyanathan, who had joined the firm as an assistant in 1941, and Hadow who had returned to the fold as a partner in 1937, took over the firm. Paterson's was to be responsible for the first public issue in Independent India when, in 1948, it handled the assignment for India Cements.
Hadow retired in 1961 and E.V. Rajagopalan joined as a partner. In 1968, Vaidyanathan decided to follow Paterson into coffee, concentrating on his 5,000 acres of estates, and Rajagopal became sole Proprietor till Vaidyanathan's son, V. Sri Ram, who had been with the firm from 1964 as an assistant, became a partner.
In 1993, the partnership became a private limited company, one of the first among Indian stock broking companies. Sri Ram retired as chairman of the Board a few months ago after 46 years with the firm.
In 2009, the Hinduja Bank (Switzerland) took a controlling interest in the firm and Amarnath, who had joined the firm in 1987 and became a partner and then a director, was named its CEO.
***
When the postman knocked…..
* M. Pakkiam, referring to my mention of Eardley Norton in last week's Miscellany, says he thinks the Nortons had an earlier home, The Grange , now called Kanchi , on Greenways Road. Indeed it was. What became known as The Grange , around 1907, was built in 1853 as Norton's Gardens by John Bruce Norton, the successful lawyer who later became Advocate-General.
He was the father of Eardley Norton. John Norton had built the house on land that had once belonged to the Kodari and Kumareswara temples. It was later sold by the Nortons to a Mackenzie, a partner of Arbuthnot's, who sold it to the Maharajah of Vizianagaram, who sold it to P. Venkatachellum, who sold it to the Government in whose possession it now remains.
The Nortons after the sale of Norton's Gardens bought what was called Admiralty Gardens , a much bigger property, and that became the new Norton Gardens .
Curiously, when the government bought what had become Mackenzie Gardens , it was intended for a Rajkumars' college but that never materialised; today it has indeed become a college — for administrators.
* District Grand Master K.R.N. (Ravi) Menon tells me that Rajaji was a member of the Salem Lodge and not of the Lodge of Perfect Unanimity.
When Rajaji lost his wife he is believed to have moved into the Salem Lodge premises as he could not afford the house he was living in (that was around 1925).
The lawyer then began to dabble in politics and Sir Archibald Campbell, the Chief Secretary but more significantly, in this context, the District Grand Master, informed him that he could not remain a Freemason as their constitution forbade a Freemason from participating in politics.
Rajaji accepted the decision — and, Ravi Menon adds, never ever held it against the fraternity.
