Monday, September 29, 2008

320 years and counting

In the late 17th century accounting and audits were most likely based on subjective assessments of how much money should have been collected (and how it should have been shared). It is not surprising therefore that there were several disagreements among the field officers of the British East India Company and those sitting at headquarters. In fact, the second governor of Madras, Elihu Yale, was constantly harrassed by his London bosses. Streynsham Master, Yale's predecessor, had introduced taxes but after Yale took over, there was a considerable amount of friction over money matters, to the extent that the head office turned to outside help to rein Yale in. (There was quite a bit of ground fo their suspicions; when he returned to England, Yale is reported to have paid £24,000 - in 1699 - as duty for the goods he brought with him).

In 1687, Sir Josiah Child, the Chairman of the Company, succeeded in persuading King James II to issue a Royal Charter creating the Corporation of Madras to administer this new city. Persuasion must have been necessary for, until then, such an institution had not been created anywhere outside Britain and the King would have been reluctant to associate with an experiment happening so far away. But Sir Josiah did succeed and the Charter was issued on December 30, 1687. Yet, it took 9 more months before it could be implemented - the bulk of that period must have been taken up with Elihu Yale negotiating to keep many of his powers. And so, on September 29, 1688, the Corporation of Madras was inaugurated with the Mayor, 12 Aldermen and 29 Burgesses - a considerably mutiracial group they were, comprising Company officers, French, Portugese & Hebrew, as well as 'Gentu' merchants.

The 'experiment' has obviously been successful: the Corporation of Madras became the blueprint for setting up similar institutions in India and elsewhere - another instance of how Madras has been a torchbearer for the world!


Hilda said...

You mean your city government is a corporation? Now that is something totally new to me. I'm off to the link you gave to read up on it. So intriguing and interesting!

LVISS said...

The basics of acounting and audit still remain the same but for some changes here and there I suppose.

Shantaram said...

>> Hilda>> Ooops - hope I did not mislead you... Corporation is more a term like a city council, not necessarily a business corporation!

>> Ravindran>> Well, however you put it, it boils down to income and expense - CDOs be dammed!!