But other districts decayed. The cotton has given way to the corn. just as important are only waiting for the like assistance to show the same activity. Of the whole 10,144 miles open on December 31, 1882, only about 150 (the Nagpur and Chattisghar) can be said really to enter the great wheat-lands of the Central Provinces, and this after thirty years of railway operations. It is said that the line from Gwalior to Bhopal would bring down 1,000,000 quarters every year. Great complaints prevail as to the management of the great lines of railway by reason of the dual control' which exists. As it is well put-19 The agent of the company can incur no expenditure and practically can do nothing without the concurrence of the consulting engineer, and the two are just as likely as not to differ. Should they not agree, or should the proposal be beyond the limited powers of either, it involves, on the one hand, a reference to the Board of Directors in London, and, on the other hand, to the Government of India, and frequently to the Secretary of State. I wonder what the manager of a metropolitan line would say if he were called upon to work his traffic properly, and, at the same time, were not allowed to draw up a new time-table, or to alter a rate without the concurrence of an officer of the Board of Trade, and the sanction of the Board of Trade sitting at Vienna, and without the approval of his own Board sitting in Calcutta. It was only the other day that a reduction of rates could not be carried out on one of the Indian lines, as nearly all the directors were away, and no quorum could be got together in London. Even the State railways have their defects, and the whole question of management as well as extension demands the immediate consideration of Government. In his speech last June to his shareholders the chairman of the Great Indian Peninsula Company admitted that his line was choked with grain. There is also a frequent block at certain seasons on the East Indian, and there can be no doubt that additional lines are needed on all the great lines as the coast is approached. Probably a great extension of double lines will be required throughout India. Nothing causes more irritation and loss than these delays of produce.20 It is not, however, the railway alone that is in fault. The state of the harbours is a very serious matter. Great improvements are called for at Bombay, and Colonel Stanton (p. 57) admits the inadequacy' of the accommodation at Karrachee. If we wish to compete with America we must provide all requisite facilities for a trade that seems likely to be enormous. 6 If we may assume that we have in India a vast area which can produce excellent wheat, but which is not developed by the existing 19 Indian Wheat v. American Protection, p. 32. 20 See Bombay Chamber in loc. cit., p. 16. Speaking of 'forced stoppages' of wheat at stations, they say, 'It is impossible to adequately describe the indignation of the mercantile community at the culpable remissness and indifference to the interests of India of those who are responsible for such a state of things,' railways, there seems to remain only the question whether the capital can be easily raised, and without serious risk to the Government. It may, however, be interesting to insert a few words on the advantages to India and to England of further developing this great industry. To be able to sell surplus produce now unsaleable, and to procure a market for a greatly increased production, must be a direct and most important gain to India. The more she has to sell the more she can buy, and the more she sends to Europe the less will be her loss by exchange, because the greater will be the demand for the means of remittance from Europe to India. The only conceivable injury to India which can be placed on the other side is that of incurring too heavy a debt, and especially a debt payable in sterling. Lord Lawrence, when Governor-General, was strongly impressed by this danger before the fall in silver in Europe had opened our eyes to the danger of borrowing in gold, when we receive our revenue in silver.21 Probably, however, had he seen our present balance-sheets, he would have felt differently. The interest on the uncovered debt of India is hardly more than 2,500,000l. a year, and it seems absurd, as I have already said, to argue that such a charge can render the risk on guarantees, carefully selected, at all serious for such a country as British India. The loss by exchange raises other considerations, and I do not wish to propose that we should guarantee in sterling. I would merely suggest that a loss of interest must be incurred if loans are raised in silver, and that any important loss of interest in a long course of years might, and probably would, involve much more loss than even the loss by exchange. And it should be added that the more the trade of India is developed by the extension of markets for her products, the more easily will the loss by exchange be borne, to say nothing of the great probability that this development would tend to reduce that loss. Even since 1873 the total interest on the debt has fallen 1,000,000l., and the Government, which then lost 2,000,0001. by 'productive' Public Works, is now a gainer by them of more than a million. It would be well if our own public burdens showed the same tendency.22 21 Life of Lord Lawrence, vol. ii. pp. 495, 497. 22 I append a few figures showing the progress of the country since 1873, spite of some very bad seasons. I am aware that there is a school of economists who assert that our government of India, so far as relates to public works, is an injury to the country. In fact they say that if we had left India alone, merely preventing internal strife, she would have been better off than she is at this moment. So at least I understand the argument of Mr. Connell, who thus sums up the matter: 23. Is it not obvious that, taking the economic changes as a whole, the country has lost an enormous source of wealth? If the import of cotton to India and the export of grain from India ceased to-morrow, the Indian people would be the gainers, though the Indian Government would be at its wits' end. And he proceeds to argue that the railways have encouraged exports of grain, and therefore discouraged the habit of storing food, and that they have taken away the employment from the owners of bullocks used for draught of the country carts. It is evident that writers of this school regard the introduction of any modern inventions into an old country with great suspicion. This writer prefers, for instance, payment of taxes in kind to payments in cash. He thinks that because improvements come from without, they do more harm than good. Great undertakings suited for England are not suited to India. In what he says as to the need of economy all will agree, but it is impossible to distinguish between his line of argument and that of those, not yet entirely forgotten, who prophesied untold financial and other troubles from the introduction of railways into England. Many thereby lost for a time their employments, and much capital was lost; but to argue that, therefore, the loss was greater than the gain to the whole country is surely too absurd to delay us much. It is, no doubt, true that India could have borne the absence of locomotion by steam much longer than England, because India could generally feed her own people without importation; but it does not thence follow that India will not gain by the substitution of cheap for expensive carriage over great distances, and we have seen vast numbers saved from starvation by these despised modes of carriage. It is said that by exporting grain you raise its price. That may be so, but you also greatly encourage production, and you also encourage economy of a product sometimes so cheap as to be hardly worth growing, and sometimes so scarce as to involve the population in all the miseries of irremediable famine. Mr. Connell has set forth, as so many others have done, the great difficulties arising in the application of modern systems of irrigation; but he has, so far as I can see, utterly failed to show that cheap carriage by rail is an injury, even to an old country like India. It is quite possible that capital cannot change its use so easily in India as in England. Therefore the results of an economic change may be different, and not always so immediately beneficial. That is con 23 Economic Revolution of India, p. 53. ceivable; but it does not thence follow that a great saving of labour is of no use to the country, and that labour, formerly expended over most clumsy modes of carriage, can find no other application. Surely some principles of economics are applicable everywhere, though some changes are far more easily and quickly made in Britain than in Bengal. It is quite certain that the people take kindly to the railways, and nowhere do the railways succeed so well as when they compete with a canal, or a river, or a road. The facility of transit creates a demand in India as in England; and you may see the river crowded with boats, and the railway close at hand busily occupied. The railway does that which the river or the road could not do. It may sometimes seriously interfere with their use, but, in fact, it opens up new demands which it alone could supply. What is true in this matter of the dense population of England, is found to be true of the denser, though poorer, population of India.24 Such debts To England, also, the gain will be great. She will buy her grain from her own dependency with which she has free trade, so that the more she buys the more goods she will sell to the East. are chiefly settled by export of goods, not by bullion. The more India sends to us, the more of our goods she will take, and these will enter free of duty. India will not send us wheat, and then by heavy duties discourage those who wish to take our goods in return, after the example of America. Moreover, in the course of the construction of her railways, India must purchase largely our iron and our machinery--an operation which would give a welcome stimulus to industries not in recent years too prosperous. And to some it may be a consolation to reflect that, in buying from India, we buy from a country which is part of our empire, the supplies from which are not likely to be stopped by ordinary disputes or wars; and that such a new source of supply renders us more independent of other countries than we have now been for a long period. But the question of raising the capital presents at first sight some difficulty. From the result in one instance, at any rate, it would not seem that the English public desire to take the securities of Indian Railways, unless some interest be guaranteed by the Government of India. It is not easy to say what is the smallest amount of guarantee which would suffice. Of course the Government desires to maintain the highest possible credit, and will be anxious not seriously 24 Dr. Hunter (Indian Empire, p. 40) points out that the railway sometimes even increases the traffic on the river. 'It seems probable that the actual amount of traffic on the Ganges in native craft has increased rather than diminished since the opening of the railways.' And, on the other hand, 'The Ganges is not merely a rival, but a feeder, of the railway. to impair its power of borrowing for state purposes by a great increase of its liabilities on account of railways. But, if there be any force in the argument of this paper, it seems to follow that the Government will have to exercise some courage, or it will fail in its duty. It has shown abundant financial courage on many occasions when military demands have pressed upon it, and now we may fairly ask for a like course of conduct when we ask the Government, —not to run any serious risk,—but to use its influence for a wise and peaceful purpose. It is not asked to invest in that which cannot possibly give any direct return, nor even to raise any money directly, but merely to secure a minimum return in the event of any accident or mistake. And any possible loss will really be far less than the loss of leaving a great territory undeveloped, and its people impoverished by the want of sale for their productions. As already hinted, the result of past operations has been very satisfactory. We have borrowed under very adverse circumstances, and yet a sufficient interest is received, so that Government now gains by railways, and is likely to gain largely. The only fear for the future is that some lines may be sanctioned without sufficient consideration, or may be made too expensively. This danger seems to be very slight, having regard to the experience now already in possession of the Government. Mistakes will be made, no doubt; but such is the inherent power of the soil and climate of India, and such the industry of her people, that we may confidently predict a great success, even should a large sum be yearly borrowed and expended. For my own part I think it would be perfectly safe to give a guarantee on at least 10,000,000l. a year to companies agreeing to construct selected lines of railway, provided terms could be arranged which would satisfy investors, and give reasonable protection to Government. The guarantee must be liberal for a limited term, if on a silver basis, but reserving to Government the right to cancel the guarantee, and to make any line not completed within a certain time from the date of the contract; and reserving also a definite share in the annual net profits of the railway, and a reversion to Government in the whole undertaking on reasonable terms of purchase after a fixed period of possession by the undertakers.25 Such an annual outlay would probably complete about 1,200 25 Sir J. Strachey objects to the system of guarantee, and leans towards construction by the State with, possibly, working agreements with companies. I do not propose to enter here on that question. It would take far too long, as involving large questions as to the proper limits of Government interference and the like. I will only say that, if we may judge from our experience so far, it would not seem that we can depend entirely on private enterprise. On Dec. 31, 1882, only ninety-six miles were open, even of the 'assisted lines.'. Government must intervene either to make the lines or to guarantee interest to those who agree to make them. I do not myself follow Sir J. Strachey's argument, but I admit, of course, that his vast experience gives him a superior power of forming a right judgment. |