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January, 1844, he published a pamphlet on the subject, together with a sketch-map of the principal lines on which, according to the best information then available, the construction of railways appeared likely to prove beneficial to the country and to shareholders. Neither the public nor the Government manifested much interest in the subject

. On the retirement of Lord Ellenborough, Mr. Stephenson addressed Mr. Wilberforce Bird, the Deputy Governor of Bengal, and Governor-General ad interim, stating that no pecuniary aid would be required from the State, and that no concession was solicited beyond the free grant of the land, and the appointment of two or three official directors to consolidate the undertaking and to give confidence to the public. Mr. Bird took up the question with great heartiness, and it was energetically advocated by the liberal and enlightened Secretary of the Bengal Government, Mr. Halliday, as well as by the most influential of the local journals. Mr. Stephenson was informed, in reply to his communication, that the Deputy-Governor was deeply sensible of the advantages to be gained by the construction of railways along the principal lines of communication throughout the country, and was anxious to afford any well-considered project for that purpose his utmost support. This communication, which was promulgated in the official Gazette, was the earliest recognition of the importance of the enterprise by the public authorities. Fortified by this encouragement, Mr. Stephenson returned to England in July, 1844, to organise measures for the prosecution of the work. Concurrently with this movement, an effort was made by Mr. Chapman on the Bombay side to interest Government in the establishment of railways at that Presidency, and was recommended to submit his proposals to the India House, which resulted in the adoption of the Great Indian Peninsula line. At the same time Mr. Andrew projected a railway in the northwest provinces of Hindostan, and secured a large amount of patronage ; but it was mainly owing to the perseverance of Mr. Stephenson that the project was carried successfully through the difficulties it encountered in Leadenhall-street, and in the inercantile circle in London.

Those obstacles were of the most serious character. Twenty years before, when the scheme of railroads was for the first time laintly set before the public in England, the idea of a conveyance which should travel twice as quick as the mail was considered perfectly absurd, and it was remarked, that we should expect the people of Woolwich to suffer themselves to be fired off on one of Congreve's ricochet rockets as trust them. selves to the mercy of such a machine going at such a rate.' Vol. 125.-No. 249.

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Scarcely less fanciful were the objections now raised to railroads in India. The natives, with their stereotyped habits, it was affirmed, would never take to this novel mode of conveyance; and, if they did, they would be smitten down by the tropical heat, the white ants would devour the sleepers in a twelvemonth, and not only the carriages, but the rail itself would be swept away by the floods. Neither were English capitalists prepared to risk their funds upon a doubtful enterprise at the distance of half the globe, over which they could exercise little control, and which was too likely to fall a victim to local jobbery and peculation. It soon became evident that, without a direct guarantee from the State, the establishment of railroads in India was altogether hopeless. But although the proposal was encouraged at the India House by Mr. Shepherd, by Sir James Hogg, and by the great secretary, Mr. Melvill, some of the most influential of the Directors, and more especially Mr. Tucker, the leader of the Old India' party, scouted the idea of any such innovation. The letter of Mr. Bird, however, appears to have produced a favourable effect; and the Court, feeling that the question could no longer be shelved, determined to send out an able engineer to conduct investigations on the spot, and to make a report to Government. The office was refused by several men of eminence in the profession, one of whom, however, consented to undertake it for 10,0001, a year and a baronetcy. Mr. Simms was at length selected, and proceeded to Calcutta in 1845, in company with Mr. Stephenson and a small staff. After a careful survey of the country, Mr. Simms recommended that a line should be laid down from Calcutta to Delhi, a distance of a thousand miles, the cost of which he estimated at 15,0001. a mile, inclusive of the expense of constructing and stocking it. When the report came before the Supreme Council, three of its members, Sir Herbert Maddock, Mr. Millett, and Mr. Cameron, proposed to limit the aid of the State to the free gift of the land; but Lord Hardinge, then at the head of the Government, who set a higher value on the undertaking than his colleagues, recorded it as his opinion, that while it was the greatest boon we could confer on India, it would be preposterous to suppose that the simple grant of the land, the value of which, at the rate of 2001. a mile, would not exceed 200,0001., would be sufficient to attract fifteen millions of British capital to India; and he proposed to add to it a subsidy of 10001. a inile. The report was transmitted with these minutes to the India House, but the Court of Directors, better acquainted with the pulse of the stock-market than the Council in Calcutta, felt that it would be absurd to introduce such a project to public notice with nothing beyond this contemptible bounty, and they proposed at once to grant, in addition to the land, a guarantee of four per cent, on five millions. This was the commencement of that system of guarantees which is one of the most important events in the history of the British empire in the East. The era of material progress in India dates from the period when this principle of constructing remunerative public works from capital raised under a State guarantee was adopted by the Court of Directors. A surplus revenue in India was like angel's visits, few and far between ;' and it no sooner made its appearance than it was absorbed by some pressing exigency. To have confined works of improvement within the limit of the funds which could be spared from the public treasury would have been tantamount to the entire neglect of them ; but by alluring to the service of India a portion of the surplus of English capital, Government obtained access to a perennial spring of wealth liable to no interruption. It was thus enabled to prosecute railways with increased vigour, even at the time when the suppression of the mutiny required political loans of unexampled magnitude. : The sum embraced in the guarantee conceded by the Court was cut down by the President of the Board of Control, who had always been lukewarm on the subject of railways, from five millions to three. This injudicious parsimony created no little disgust in the European and native community in India. The offer of four per cent. was, however, found inadequate to draw capital to the undertaking, and its progress was again arrested. Those who advocated it in the Direction considered it a dereliction of public duty to allow the interests of a great empire to be obstructed for the paltry sum of 30,0001. a year, and Sir James Hogg, to whom India is under greater obligations for her railway system than to any other member of the Court, by extraordinary exertions prevailed on the Indian authorities at the east and west end to augment the guarantee to five per cent. If these terms had been offered at an earlier period when the money market was easy, all the requisite funds would have been obtained with little effort. But the concession had no sooner been made than a monetary crisis arose which rendered it impossible to obtain funds even at this rate. The money market was in so deplorable a state that loans could not be obtained on Government security at a lower interest than eight or ten per cent. The sum of 100,0001., which the East Indian Railway Company was required to deposit by a particular date, was not forthcoming. The amount of the deposit was therefore reduced and the period of payment extended ; but even

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this smaller sum was not to be had, and the Court of Directors pronounced the negotiation at an end. The indefatigable exertions of Mr. Stephenson, however, succeeded in keeping the Company from dissolution during this period of tribulation, and on the first dawn of commercial relief the India House was induced to recognise it anew.

The prospect of an early and favourable commencement of operations was, however, again beclouded by a controversy which arose regarding the nature of the guarantee. Those who had subscribed to the undertaking were under the impression that they had obtained an absolute guarantee of a fixed dividend of five per cent., without reference to the success of the line. The Court of Directors, on the other hand, maintained that their subvention extended no farther than to the payment of five per cent. interest on the capital raised with their sanction; in other words, if the receipts were not sufficient to cover the working expenses, the deficiency was liable to be made good from the guaranteed interest. After the loss of much time in a prolonged discussion, this interpretation was reluctantly accepted by the shareholders ; but it has been practically nullified by the late decision of the Secretary of State in the case of the Calcutta and South Eastern Railway, the only line which has been wound up. That luckless Company had been unable for several years to meet its expenditure from its receipts; but Sir Charles Wood, instead of directing the deficit to be deducted periodically from the guaranteed interest, allowed it to be carried to a separate account and to form the first charge on the surplus receipts. On the 1st of April last the Company surrendered the undertaking to Government, when the shareholders received back their capital in full, together with interest to the latest date. The decision of Sir Stafford Northcote in this case was the dictate of a sound and prescient policy, inasmuch as there can be little doubt that if he had listened to the unwise advice given him and enforced the letter of the contract by deducting the balance of working expenses from the last instalment of interest, the confidence of the public in these investments, the growth of fifteen years of liberality, would have been rudely shaken, and the whole fabric of Indian railways damaged to an indefinite extent, to save a few thousand pounds. The precedent thus created virtually converts the subsidy of Government into a dividend guarantee.

The contracts with the East Indian and the Great Indian Peninsula Companies were signed in August, 1849. The salient points in these first contracts, which became the model of those subsequently concluded with other Companies, may be thus briefly stated :-The Government made a free grant of the land required

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for the rail and the works and stations on a: lease for the term of ninety-nine years, and guaranteed interest at the rate of five per cent. for the same period on the capital raised with their concurrence, to commence from the date on which the sums were successively paid into its treasury. This system of guarantees has been condemned as not being in accordance with the dogmas of political economy; but it is a sufficient answer to the objection that without the guarantee there could have been no railways in India at all. In return for these important concessions the following arrangements were accepted by the two Railway Companies:- -The mails and post-bags, and post-office servants, were to be conveyed free of charge ;, European military officers were to travel in first-class carriages at second-class fares, and troops and European artisans on the public establishments in second-class carriages at the lowest fares. All public stores, civil and military, guns, ammunition, carriages, waggons, camp-equipage, and equipments, were to be conveyed at the lowest rates, and Government was to have a priority over the public for the carriage of them. Government was also to be invested with power to regulate the route and direction of the lines, the weight and strength of the rails, the number of trains, the period for starting, the rate of speed, and all the conveniences and accommodations deemed necessary by its officers.

The rolling-stock was to be made adequate to the service of the line to the satisfaction of the officers of the State. The fares for passengers and the tolls for goods were in the first instance to be fixed by Government; but no subsequent reduction could be made without the concurrence of the Company until the net receipts of the line exceeded ten per cent. The whole undertaking was, in fact, placed under the jurisdiction of the State by the following comprehensive provision :

• The said Railway Company, and their officers, servants, and agents, as also their accounts and affairs, shall in all things be subject to the superintendence and control of the East India Company, as well in England as elsewhere, and in particular, no bye-laws, contracts, orders, directions, proceedings, works, or undertakings, acts, matters or things whatsoever, shall be made, done, entered into, commenced and prosecuted by or on the part of the said Railway Company, unless previously sanctioned in writing by the East India Company, and no money shall be raised, and no extension of the number of shares or of the amount of its capital shall be made unless sanctioned by the East India Company An ex-officio Director was to attend all the meetings of the Boards, with a right of veto on all proceedings whatsoever, except in regard to communications with the legal advisers of

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