Introduction

The first parliamentary committee focused on Indian rail finance was assembled by Gladstone's biographer, Secretary of State Morley in 1907/8. Fifty-four years had elapsed since Viceroy Dalhousie's original minute. For a project which had already absorbed almost £300 million of mostly state-sponsored capital, this was long overdue. At Sir James Mackay's committee managing agents, City financiers, railway representatives and senior ICS mandarins pressed for increased GOI expenditure on railways to encourage the growth of the guaranteed companies and related trade opportunities. The representatives on Mackay were from trade, commerce and finance rather than manufacturing. This was consistent with Cain and Hopkins ‘gentlemanly capitalism’ paradigm. Their behaviour during the twelve days of testimony at Mackay highlighted the important lobbying role performed by ‘expert witnesses’ in matters of Imperial finance. With contracts and concessions at the behest of the GOI, it showed these gentlemanly capitalists practising selective laissez-faire. The criticism which the Mackay Committee attracted from Indian nationalists showed disillusionment amongst even moderate Congress opinion at the time of the party's split in 1907. Revealingly, moderate liberal nationalists like Naoroji and Wacha displayed more deep attachment to laissez-faire than British ‘gentlemanly capitalists’. While managing agents and financiers pursued direct and indirect government support, nationalists sought to use the market to promote more profound economic development.