About 1620 the East India Company established another factory at Masulipatam on the eastern side of India. The Hindus along the coast of Coromandel were famous for painting muslins and calicoes, and there was a growing demand for such goods amongst the eastern islands, whilst valuable cargoes of nutmegs and other spices could be obtained in exchange. But Masulipatam was seated in Mohammedan territory. A Sultan of the Deccan, reigning at Golconda, had extended his dominion eastward to the coast of Coromandel, and established the port of Masulipatam for the importation of horses from the Persian Gulf. The traders at the British factory were therefore cramped and worried by the Mohammedan authorities, and yearned to effect a settlement on the territories of some Hindu Raja further south, where they could fortify a factory and mount it with British cannon without the interference of local authorities. [Sidenote: British territory and fortress at Madras, 1639.] §3. In 1639 a British merchant named Day bought a strip of territory on the Coromandel coast, about 300 miles to the south of Masulipatam. It was within the dominions of a Hindu Raja, and was about six miles long and one mile inland. It included a small island, which faced the sea and was defended on the land side by a river. Mr. Day agreed to pay the Raja a rent of 500_l._ a year in native coin known as pagodas, and the transaction was duly engraved on a plate of gold. A factory of brick was built upon the island, and mounted with cannon, and called Fort St. George. The Raja was perfectly content. He was too glad to get a rent of 500_l._ a year to raise any difficulty as regards fortifications or cannon. [Sidenote: Fort St. George and Black Town.] This factory was the germ of the city of Madras, on the coast of Coromandel. Weavers, washers, painters, and hosts of other Hindu artisans, flocked to the spot and eagerly entered the service of the British, and began to set up their looms and to weave, wash, and paint their cotton goods in the open air beneath the trees. Villages of little huts of mud and bamboo soon grew up on the sandy soil to the north of the island and factory. Each avocation formed a caste, which generally had its own quarters and its own headman. In this manner a Hindu settlement grew up by the side of Fort St. George and was known as Black Town; and the whole locality, including Fort St. George and Black Town, was called Madras, and was the first territory acquired by the East India Company in India. [Sidenote: Despotic rule.]