Financing India’s Imperial Railways, 1875–1914 by Stuart Sweeney (review)

Stuart Sweeney’s Financing India’s Imperial Railways, 1875–1914 studies the political debates and cultural conflicts surrounding British railway investment in India in the years of high imperialism. The contested policy issues include the appropriate roles of public and private interests in railway construction and operation, the distribution between British and Indian interests of the tax burden arising from guaranteed shareholder returns, and the importance of central and regional planning in the appropriate choice of railway routes. The study is embedded within a long tradition of writing on Indian history and on the history of British imperialism in general.

The book comprises seven chapters and some short appendices. Chapter 1 introduces the concept of gentlemanly capitalism; it examines the opportunities for private profit that railways generated, and the attitudes of those who exploited them. Chapter 2 examines the connection between railways and famines, considering whether or not railways played a useful role in avoiding famines or alleviating their effects. Sweeney suggests that some of the capital invested in railways would have been better spent if it had been directed to agricultural development.

Chapter 3 examines the military motive in the construction of Indian railways, particularly in the north of India, where the threat from Russia and Persia was most acute. Sweeney demonstrates that Russian railway building was perceived as a direct security threat to the British Empire and that certain railway schemes were promoted as a direct response to this threat.

Chapter 4 is relatively short, and concerns the floatation of a new generation of railway companies with guaranteed returns in the 1880s. The author argues that this exercise merely repeated the mistakes made with the first generation of companies. the profits were not as high as expected, and were made good by introducing restrictive business practices that implicitly taxed the Indian peasantry.

Chapter 5 presents a case study of social networking and political intrigue, based on the career of Thomas Douglas Forsyth—one of the “men of the second rank” in the history of British India (115). It describes the people with whom Forsyth collaborated or negotiated during his undistinguished career—his main concern was the value of his pension, it seems.

Chapter 6 studies the career of Richard Strachey, chairman of the East India Railway and the Assam-Bengal Railway. He was a forceful advocate of railway construction, and was disliked for his methods. But he was popular with investors, the author contends, because he always put their interests before wider social considerations.

Chapter 7 presents a tightly focused case study of the Mackay Committee of 1908, the first parliamentary committee on Indian railway finance. The conclusion to this chapter provides a useful summary of underlying themes in the preceding chapters. The main protagonists from the business community were instinctively in favour of free trade and against state intervention, but nevertheless they were willing to press for government investment in Indian railways if it were underwritten by the Indian taxpayer. They adopted this two-faced attitude because it furthered the private business interests they represented. The Mackay Committee was a forum for developing business deals, and its timid conclusions represented the triumph of self-interest and expediency over ideology. “Financiers,” Sweeney writes, “negotiated attractive concessions and long-term contracts for their rail companies, whilst advising … on the provision of credit to the same companies. Managing agents pressed for 100,000 miles of rail infrastructure with foreign trade oriented freight tariffs, which accelerated India’s ‘de-industrialisation’” (177–78).

In the concluding chapter, the author summarises his views on gentlemanly capitalists. He finds that they revealed a range of preoccupations, including “Russophobia, fear of internal revolt, social concern at peasant starvation, feudal preoccupations, land values, foreign-exchange stabilization, free trade, Ricardian comparative advantage, technophilia, enhanced pension opportunities or simply the pursuit of railway mileage for its own sake” (180). Overall, he concludes that London-based financiers profited from government subsidies to the railways, ultimately paid for by...