Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Standard view
Full view
of .
Look up keyword
Like this
0 of .
Results for:
No results containing your search query
P. 1
Introduction From Financing India's Imperial Railways

Introduction From Financing India's Imperial Railways

Ratings: (0)|Views: 224|Likes:
The introduction from Financing India's Imperial Railways
The introduction from Financing India's Imperial Railways

More info:

Published by: Pickering and Chatto on Aug 01, 2011
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less





– 1 –
By 1908 Britain had invested £274 million o capital in Indian railways, mak-ing it the largest single investment programme ever undertaken in the BritishEmpire.
Railways made up 80 per cent o Britain’s industrial investment inIndia, relying on Indian taxpayers to und construction and early operations.Te size and prominence o this public works project has prompted a continu-ing scholarly debate on the motivation and results o Indian railways, since LordDalhousie’s original railway minute o 1853. However, most o the analysis hasocused on the earlier period o railway construction up to 1875. Like muchhistoriography o the colonial Indian period, analysis has been characterizedby subjective responses to British Imperialism. For example, Daniel Torner’s work on government provision o early Indian railway guarantees comple-mented Indian nationalist writing on railways, as part o the ‘drain’ debate. obe air, Torner was sensitive to the di culty o pursuing development policiesin British India given the political landscape at Westminster. Aer all, the IndiaO ce was not unique in guiding colonial enterprise towards dependence onmanuacturers and nanciers at the metropole. In contrast, the ‘new Imperial-ist’ scholars, reinterpreting British railway policy as liberal, sensible and benignhave ignored the most compelling aspects o Indian nationalist critique. Dutt,Naoroji, Ranade and Wacha may have overstated their case at times, but thecomplaint that Britain pursued railways in isolation rom other legitimate devel-opment concerns has never been rebued.
Te opportunity cost o railways, ina balanced budget environment, in terms o irrigation, sanitation and educationexpenditure oregone was considerable.Indian railways have been criticized or absorbing more than their air shareo India’s tax receipts. Tey have also been seen as stifing industrial develop-ment and wealth creation in India. It is true that nationalists underestimated thechallenges in converting India’s eighteenth-century artisan textile businesses into western-style industry. Nevertheless, India’s industrial stagnation in the nine-teenth century is an awkward act or apologists o Empire. Te British neglecto Indian industry aer the all o the Company is beyond debate, but the extentto which this was understood to place limits on India’s growth potential is still
 Financing India’s Imperial Railways
discussed. Even Keynes had seen the terms o trade moving in avour o India’sagricultural base over time.
Modern globalization theory has stressed the ben-ets o rigorous international specialization. Victorian railways in India wereconstructed to accelerate that process but, uniquely, India became a major rail- way power without beneting rom the normal accelerator and multiplier eectso capital investment. Te cataclysmic amines o the 1870s and 90s were themost dramatic evidence o the ailure o the Raj to create economic growth andcombat extreme poverty in India. Over 1875–1913, or example, China gener-ated comparable economic growth to India, without a railway network, whileboth countries underperormed the average or developing nations.
At thesame time, the British ocus on overseas capital exports, o which Indian railwaybonds and equities made up a signicant share, created longer term problems orthe UK economy, which suered rom the opportunity cost o capital directedat ‘rentier’ empire pursuits, rather than new domestic industries like electricity,chemicals and motor cars.
During the late nineteenth century the British were prepared to questionthe benets o rail investment at public committees and commissions. However,by 1909, in a memorandum detailing the achievements o the Raj in the hal-century since the Mutiny, sel criticism had ceased. Railways were emphasizedas one o the great achievements o the period since the abolition o the EastIndia Company (the Company). Aggregate gross earnings were £30 millionand the benets o the railways were estimated at a spectacular £100 million perannum, incorporating savings in transport ares per mile travelled but excluding additional benets o spared time. Te railway network employed some 525,000 people o whom 508,000 were Indians. Railways had produced a return that yearo 4.33 per cent. Like modern scholars o the Imperialist school, the report ailedto consider alternative uses o the enormous capital expended. Indeed, the report pointed to returns o some 8 per cent on more recent irrigation expenditureon an aggregate capital programme o only £32.5 million. Tese were returnsunheard o in the Indian railway sector, outside the Bengal regional monopoly,the East Indian Railway (EIR). Te India O ce/GOI had over previous yearschannelled ten times as much capital into the lower yielding railway businessin a policy which ignored considerations o market-based returns.
One aim o this monograph is to explain the strength o support or this railway investment programme across large sections o British decision-makers without resorting toa partisan view o the rights or wrongs o the project.
o do so it is necessary tolook in detail at debate surrounding the three rationales used by the British to justiy prioritization o Indian railways: trade and commerce, amine protectionand relie, and military/strategic benets or the deence o India. Te triumvi-rate o early rail enthusiasts, W. P. Andrews, Macdonald Stephenson and JohnChapman used all three aspects in promoting Indian rail projects.
Tese three
rationales provide a helpul ramework or interpreting the period aer 1875 when similar arguments persisted.Te commercial rationale or railways had been called into question by 1875.Te rst generation o government-guaranteed companies, with the exceptiono the EIR and Great Indian Peninsula Railway (GIPR), had ailed to meettheir 5 per cent guarantees and absorbed large GOI subsidies. Tis prompteda shi to direct state unding under the Liberal Viceroy Lawrence, a decisionreversed in the early 1880s in an attempt to move railways o the government’sbalance sheet. Te second generation o guaranteed companies provided ampleopportunities or City underwriters, nancial advisors, stockbrokers, rail pro-moters, managing agents/traders, shippers and insurers to generate serviceindustry revenues. Tis was achieved in parallel with large manuacturing ordersor locomotives, wagons, steel railings, steel lines, bridge contracts and gen-eral engineering products. Te extent to which Indian railways could act as acounter-cyclical source o demand during the ‘great depression’ o the later nine-teenth century was much discussed at the parliamentary commission hearingson the depression o trade. She eld, Glasgow, Manchester and London Cham-bers all had signicant representation in parallel with the Indian chambers. Tebook will attempt to disentangle these dierent interest groups, to draw con-clusions on the relative strength o service industry and manuacturing lobbies.Tis should contribute to the active debate on gentlemanly capitalism which hasdeveloped in recent years.
 Given that India made up over 80 per cent o the population o the BritishEmpire by 1900, Cain and Hopkins made clear that ‘no plausible explanation o the purpose o empire-building can aord to stumble over the sub-continent’.
 Tis makes the sub-continent’s largest industrial project central to any critiqueo the ‘gentlemanly capitalism’ paradigm. Indeed, Dumett criticized the lack o attention paid by the two authors to railways and shipping across the BritishEmpire. He saw their reerences as ‘brie’ and argued that the writers ailed tolink transport technology to ‘the wider industrial revolution’. Further, he ques-tioned positing a close relationship between the City and politics, apart romthe prominent Bank o England/reasury relationship (where the requirementso public unding brought them together). Tere was a lack o ‘representativeexamples’ where City people had demonstrably infuenced ‘overseas politi-cal, military and naval operations’ or ‘the building o new colonies and theextensions o empire’.
Indian railways provide a test case or these gaps in gen-tlemanly capitalism’s historiography. Equally, scrutiny o British manuacturing lobbies, which pressed railways, should allow consideration o Clive Dewey’s view that manuacturing infuence in British India was declining by the late Vic-torian period. Dewey argued that the ‘eclipse o the Lancashire [cotton] lobby’could be traced back to 1870. Lancashire’s success in overriding ‘inant industry’

Activity (4)

You've already reviewed this. Edit your review.
1 thousand reads
1 hundred reads
Mallika Grover liked this
hriaum liked this

You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->