Indian railroading: floating railway companies in the late nineteenth century

Autor: Stuart Sweeney
Rok vydání: 2009
Předmět:
Zdroj: The Economic History Review. 62:57-79
ISSN: 1468-0289
0013-0117
Popis: This article provides a case study of four late nineteenth-century share flotations of Indian railway companies. It highlights an important gap in the historiography of Indian railway finance, which has focused on the period up to 1875. The role of N. M. Rothschild as lead underwriter and its relationship with the India Office, man aging agents, and investors is analysed. This gives an evolving picture of mutual dependence between the City and Whitehall in the financing of the British Empire's largest investment programme. Gentlemanly capitalists are shown to combine the self-reinforcing roles of arranger, investor, and informal government advisor. y 1908, Britain had invested ?274 million of capital in Indian railways, making L)it the largest single investment programme undertaken in the British Empire.' Railways made up 80 per cent of Britain's industrial investment in India, relying on Indian taxpayers to fund construction and early operations. While the historiogra phy of Indian railways is voluminous, the financing of these large public works over the later nineteenth and early twentieth centuries has received little attention. The flotation of a 'second wave' of guaranteed rail companies in the 1880s and 1890s shows representatives of the City and commerce exerting great influence on the India Office, in a manner that challenges Macpherson's benign view of their activities.2 Railway financiers and promoters could press commercial, strategic, and famine-protective rationales, leaving them immune to criticism when commercial returns disappointed. This was in contrast to those promoting investment in irrigation and canals, where more onerous financial targets were set, and guarantees were resisted. These later guaranteed railway companies provide valuable case studies for the scholarly debate on 'gentlemanly capitalism', with City financiers sponsoring and promoting a number of issues. The guaranteed bonds and equities offered London's investment elite financial assets that combined Cain and Hop kins's twin 'gentlemanly' characteristics of land and government stock.3 The appli cation of government guarantees to interest and dividend payments alone, rather than to principal, kept the majority of the liabilities off the balance sheet for the Government of India (GOI), not unlike modern private finance initiatives.
Databáze: OpenAIRE
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