人文研克 大阪市立大学大学院文学研克科紀委

第61~ 2010年3月 19貰-46頁研究論文

Influence of the Evolution of Corporate Organization on the Progress of Large Scale Business Enterprise of India

in the 19th Century

NOMURA Chikayoshi

One of the most poplIlar topics among bllsiness historians in C.S. and Elll"Ope is how

developmcnt of large scale hllsiness enterprise has becn SllPPOl.tcd by e¥'ollltion of

efficient corporate organization. 8ince advantage of large scale bllsiness enterprise is

chiefly derived from mass prodllction for mass consllmption. large scalc busincss

enterprise nceds to de¥'clop. to attain scale merit. corporate organization efficiently

facilitating transactions of huge numbcr of inputs and outputs: thllS. many business

histol'inns in U .8. 01' Ellrope. wherc development of large scale business enterprise ha¥'e

been the onc of essential driving forces of their modern economic growth. have studied

how development of lurge scale bllsiness entel"prise was SUPPol"ted by e¥'olution of

corporate organization that coordinate transnction effectively.

Such topic has not. heen popular among business historillns of India. althollgh she

becanH' the 12th largesl indllstrialized natiol1s as early as in 1926-29 in term of gross

vallle 01" manllfactllring product. On a bnsis of study on development of corporate

ol"ganizntion of railwny indllstry. Ol1e of the most importunt indllstJ"ics of colonial

lndia. this paper aims to make a small step toward clarificntion of how progTess of

lal'ge scale bllsiness entcrprise of India in the 19th centul"Y was SllPPol'ted by

development of cOl"porate ol'ganization. The small step is expectcd to provide. chiefly on

a basis of reinterpl叫 ationof existing studies rather than 01' posilive employment of

primm'y SOllrces like govel'l1ment report 01" archival docllments. a ne¥¥' pm"spective on

sllJ'e inflllence of pmgl'ess of corpoJ'ate organization on development of largc scale

business enteJ'prise in lndin in the 19th centlll")'.

One of the most popular topics among business historians in the U.8. and Europe is how

the development of large scalc business enterpl'ise (LSBE， hel'eafter) has been encouraged

by the evolution of efficicnt eOl'porate organization. Such COl'pOl"ate ol'ganization includes

labour management systems. internal financing systems. corporate O¥vn marketing

systems， etc.. all of which were established after the 191h century by L8BEs to coordinate

necessary tnmsactions 01" inputs as well as outputs more efficiently than the market did.

Since the ad¥'antage of LSBE is chiefly clerivcd fl'om mass production fo1' mass

consumption. LSBEs need to de¥'elop. to attain economies of scale. C01"pOl"ate organization

19

NOMURA Chikayoshi

efficiently facilitating the transactions of their huge number of inputs and outputs. Thus，

many business historians in the U.S. 01' Europe， where development of LSBEs have been

one of the essential d1'Iving fo1'ces of their modern economic growth. have studied how the

deve)opment 0(' L8BE was encouraged byもheevolution of corporate organization.

India developed various L8BEs from the mid 19th century as one of the first industrial

nations in the Asian region， although she did not do so on a similar scale and scope as the

U.8.. U.K.. 01' Germany. Due to the early emergence as well as the steady progress of

L8BEs afterwanl， India became the 12th )argest industrialized nation in 1926-29 in terms

of gross value of manufacturing p1'oduct. holding the same rank as the Nether!ands.

followed by 8weden. 1) 8uch early and steady development of LSBEs of colonial India was.

presumab)y. much encouraged by the development of proper corporate Ql'ganizations. as

was the case in leading industrialised nations in the U .8. 01' EU1'ope.

Although we have seve1'al studies showing how such LSBEs developed corporate

01・ganizationin colonial India. most of these studies do not examine clea1'ly how the

progress of LSBE was encouraged by such development of cOl'porate o1'ganization. On the

basis of existing studies as well as a few government reports on the Jndian railway

indust1'y. this pape1' aims to make a small step toward clarification of how the progress

of LSBEs of India in the 19th century， some of which had al1'eady reached international

standards in the size of business， was encou1'aged by the development of corporate

Ql'ganization. This paper is expected to provide. chiefly on the basis of reinte1'pretation of

existing studies rathe1' than of positive employment of p1'Imary sources like government

1'eports 01' a1'chival documents， a new perspective on the influence of the p1'ogress of

corporate o1'ganization on the deve)opment of L8BEs in lndia in the 191h century.

This paper consists of fou1' sections. The first section b1'iefly 1'eviews histOl'iographies

on the development of the corporate organization of LSBEs of leading industrialised

nations as "町iellas of colonial India. The second section statistically indicates how India

developed LSBEs in the 19th century on the basis of international comparison of the size

of enterprise 01' a few important industries. The third section studies how the growth of

Indian railway companies. some of v.'hich were， as will be shown in the second section.

among thc largest businoss onterpl'ises in the world at that timo， was encouraged by the

progl'Css of corporate ol'ganization. The fourth section is the conclusion.

20

Insuence of the Evolution of Corporate Organiza由non the pr喝r問。fLarge Scale B凶泊邸Enterpriseof In白血由e19'h白ntUJy

1. Historiographies

1.1. U.S. and European Countries

Analysis on development 01' cOl'porate organization of a specific LSBE has been a popular

topic among bl1siness historians of industrialised nations. On the basis of the works of

Alfred Chandler. one of the most infll1ential business histOl'ians. we will review， firstly.

how corporate organization of L8BE developed in the U.8. and European countries after

the second half of the 19th century. Then. we wilI b1'iefly show hO¥v the development

encouraged progress of business entel'prise afterwa1'ds. 2)

According to Chandler. U.8. and European countries int1'oduced a new form of business

enterprise in the second half of the nineteenth centu1'Y -a business enterprise managed by

pl'ofessional middle management staff who supervised the functioning of various so1'ts of

co1'porate o1'ganizations. The appearance of the new fOl'm of business enterpl・ise.

according to Chandle1'. essentially resulted from ‘developmen t of new technologies and

the opening of new markets'. ~! Before appearance of such ne¥v technologies and the

opening 01' new mm'kets， 'the processes of production. distribution. transportation. and

communication in capitalistic economies were car1'ied on by enterprises personally

managed by their owne1'. .l. The ovmer supervised as well as cool'dinated most transactions

of the enterprise by himself. lea ving some transactions in the hands of wholesale1's.

Concentrated supervision and coordination was possible since the volume of necessary

transactions of a single enterprise was still quite limited. In the mid 19th century when

new technologies like the railroad. the steamship. the telegraph. and the cable. emerged

sequentially. opportunities arose to explore ne¥v markets for business enterprises. some

of which succeeded in expanding the scale and scope of their business drastically. ~. The

expansion of business in scale and scope， on the one hand. made the concent1'ation of

managerial authority inefficient. and gave. on the other hand. a powerful impetus to

develop new manage1'ial o1'ganization which was， unde1' the direction of professional

middle management staff. to supervise various 501'ts of transaction of such L8BE in a

hierarchical form. .j )

Under the new form of business， one of the important targets of LS8E ha5 been to

develop the supel'vising ability of a hiel'archical organization of management as well as

development of efficient cor'po1'ate organization to cool'Clinate a huge numbe1' of

t1'ansactions. 80th the significance of developing such supervising ability as well as

efficient corporate organization are pointed out by Chandler as fo11ows;

21

NOMURA Chi!ay田 hi

The commel'cializing 01' these (new...quotel乍 note)technologies required the

creation of industrial enterprises to mobilize the necessary capital and employ

the large number of wQI'kel's and managers needed. It also demanded the

cOl'porate structures essential to coordinate the flow of goods through the

processes of production and distribution and to monitor the different functional

activities involved. 7)

According to Chandler. the steady and smooth evolution of managerial ability as well as

corp01'ate organization has contl・ibutedmost to development of. among a wide range of

business fields of LSBEs. a large scale capital intensive industrial enterprise that has

enormous potential in realising economies of scale and scope. Moreover， the progress of

enterprises involving large scale capital intensive has formed the foundation of model'n

economic growth. Such industries include the iron and steel industry， chemical industry，

ship building industry， railway industry， 01' the machine industry. which was strongly

encouraged by the establishment of the multidivisional organizational structU1・e，

engagement of professional management staff. both of which replaced the ‘invisible

hand' of market in coordinating transaction of inputs and outputs with the‘visible

hand' of business enterprise.

1.2. India

Although India was basically an agriculture dominated country throughout the colonial

period in terms of share of employment as well as production. it already had a number of

LSBEs in the early 20th century. 8) Networks of the l'ailway industry as well as the

banking industry covered much of the Indian sub continent in the early 20th centunヘ

while the cotton industry as weIl as the jute industry gre¥r" to be among the leading

earners of foreign currency by the end of the 19th century. These LSBEs employed more

than two million people at the end of the 19th century. although the share of this working

force in the totallabour market of India was less than 10 per cent throughout the colonial

pel'Iod.川 8aseclon the imp01'tation of new technology as well as the expansion of new

markets. these L8BEs presumably developed similar forms of business to those that

enterprises in the U.8. 01' EU1'opean countries devclopecl as early as in the mid 19th

century.

Due to the steady grO¥vth of LSBEs as early as in the mid 19th century. we have a

numbm' of sludies examining the causes and effects of such growth of LSBE of colonial

22

Influence of the Evolutioo of白rporate白脚izationon the pr暗闇ofLarge scale Busin閣Enterpmeof lndia in白.e19也白山ry

lndia in that period.lO) ln the case of service inclustl'Ies， on the one hand， Bagchi

investigated the development of the banking industry in the 19th century with special

interest in the influence of govel'nment economic policy on this development. while Hurd

examined what kind of influence the development of the railway industry of colonial India

recei ved from governmen t economic policy. resource endowment， ancl the general

economic growth of India as well as of the world at that time.11l On the other hand，

Morris investigated how the cotton industry grew in the 19th century with special interest

in resource endO¥vments. while Chakrabarty clar甘iedthat resource endowment as well as

the accumulation of depreciation reserves ¥vere the twin important sources of the progress

of the jute industry in the 19th century.l~;'

Despite the accumulation of such well researched monographs. only a limited number

of scholars have clarified. on the one hand. to what extent such LSBEs in India share

features of LSBEs ofじ.8.01' European countries in the 19th century. and， on the other

hand， how such grO¥vth of LSBEs of colonial India was assisted by the steady development

of proper corporate organization. as many business historians of U.S. 01' European

countries have tried to clarify. On the basis of the existing studies on the development of

corporate organization as well as a few government reports， we will make. in the

following， a small step towards clarification of the influence of the development of

corporate organizations on the pt'ogress of LSBEs of colonial India in the 19th centul'Y.

2. Development of Large Scale Business Enterprises of India in the 19th Century

Before analysing the influence of the development of COl'porate organizations on the

progress of LSBEs. we will examine the size of lndian LSBEs in the 19th century from the

viev.'point of international standards.

During the second half of the 19th century， India experienced smooth and swift

expansion of LSBEs in various fields such as the cotton industry， the jute industry， the

railway industry. the banking industry， the tea plantation industry. the coal mining

industry. and so on. The emm'gence of business enterprises in such varying fields was

strongly encouraged by the ‘tl'ansfer of new technologies as well as the expansion of the

new markets'. both of which wel・evigorously promoted after sequential events that

resulted in the annexation of India to the British empire politically as ¥vell as

economically. These events inclucled the removal of the East Inclia Company's authority

to monopolise trade in 1833. the Gl'eat ivlutiny in 1857. and the Delhi Durbar in 1877.

23

NOMURA Chikayoshi

80me of these industries were among the la1・gestindustries in the world at that time in

terms of their capital and the amount of employment they provided. In terms of

employment， fo1' instance， the labour force employed by each of the three leading Indian

la1'ge scale industries at the turn of the century was 392，517 people (railway industry)，

181.031 (cotton industry)， and 111.272 (jute industry) in 1900/01 01' in 1902.13) Leading

large scale industries of the U.8. in 1910 employed 1，246，596 (railway industries)， 308，736

(cotton industry)， 272，522 (blast furnace and rolling mill industry)， and 36，685 (automobile

industry)，IJ:o while large scale industries in the U .K. engaged 318，000 workers (raihvay

industry in 1901)， 523，000 (cotton industry in 1901)， 168，000 (il'on and steel industry in

1920)，15) suggesting the three leading large scale industries in lndia at that time employed

only a slightly smaller number of people than the important large scale industl・iesof the

U.8. or the U.K. then.

In terms of paid up capital in India. the total amount of paid up capital invested in the

railway industry (Rs. 49，460 lakhs in 1913) far exceeded the capital invested in the other

two industries (Rs.1，698 lakhs in 1901 in the cotton industry， and Rs.696 lakhs in 1901 in

the jute industl'ies).lωThe amount of paid up capital invested in the Indian railway. on

the one hand， ¥ .. 'as， according to Table 1， equal to 20 per cent of the U.8. raihvay industry.

25 per cent of the U.K. railway industry， and almost equal to the amount of paid up

capital invested in the other two British colonies. Canada 01' Australia. apparently

indicating that a huge amount of paid up capital was invested in the railway industry of

colonial India. On the othe1' hand. paid up capital invested in the Indian cotton industry

in 1901 was three times more than that invested in the cotton industry in Japan (Rs. 506

lakhs in 1901) which became a fierce competitor to the Indian cotton industry after the

beginning of the 20th centul'y，m although the amount ¥vas less than 10 per cent of paid up

capital invested in the cotton industry in the U.8.(Rs.18，8831akhs rupee in 1904)18)

1'he steady growth of lndian large scale industries is indicated by other statistical

evidence specific to the railway industlγas well as the cotton industry. According to

Table L firstly， the tota1 mileage. capital. and labour of the railway industry in lndia

ranked at 4th • 7th and 4th in the world respectively at the beginning of the 20th century.

8ince the railway industry had been one of the leading large scale industries in scale and

scope even in the U.8. and Europe at the beginning of the 20th century. the lndian railway

industry could presumably be counted as one of the large scale industries of the world

then. The world class volume of business of the lndian railway industry is indicated by

other figures; 5th in total number of persons carried and 8th in total freight carried.

24

Influence of the Evolu出nof白 rporateorganiza出non the Progr国 ofLarge sca1e B他民間Enterpriseof India in the 19由 century

Having this scale of business of the lndian railway industl・yin mind. we could easily

suppose that the industry must have developed a pl'oper corporate ol'ganization to

coordinate the various SOl'ts of transactions fo1' capital. labour. ticketing， carriage，

materials fol' railway construction and operation， etc.， just as U.8. or European railway

companies had done.

Table 1 Statistical Features of the RailwaγIndustry in 1913

Tot~l..mil l's I Total cllnital ._ f li tal capital} E l 01 Ilnc slock I ~~PIO:lo'ecs C3ITied Ilcl'ated， (~iïli~n (thousand (~~i Îli~~

(thousand )persons) milesl rupees) I I pcrsons

Cnited States 244 26.519 1.815 1.0:3:3

Hussia( 1910) 40 10.805 771 195

Germany 38 ItlOs 786 1.797

India 34 4.946 633 .157

Canuda 29 4.715 178 4s

AI'gentina 19 n.l1. n.a. I 82

Unitcd Kingdom 23 19.992 n.a. 1.23:1

France(l912) 23 ll.i19 356 525 i

Ausll1llia 2.55:3 83 249 (Commol1wl'111lh)

Auslt'ia 14 5.378 284 :U))

HUngHI・y(l!)l2) 13 2.92:3 147 164

Italy 8 11.[¥. 148 93

Sourcc: Burcau of Railway EconornIcs (1916).

:'-Jotc: S = 3.08 rupee.

Freight OpcmlIng cnrricd rcvenue per (million milc tons) (dollar)

l.HiO 12.859

259 n.a.

681 22.285 I

!)2 5.953

85 8.751

45 n.s.

416 11.3.

219 15.190

30 5.611

163 16.169

92 8.599

41 川 61 1

operatmg l'xpcnses per I

mile (dollar)

8.929

n.a.

15.607

a.083

6.211

n.a.

n.a.

9.614

3.825

12.232

5.451

12.106

This necessity fo1' establishing an efficient corporate organization must have been felt

seriously by other lndian large scale industries as well. The cotton industry， whose first

mill was founded in lndia in 1817/18， gathered Rs.169 million of paid up capital in 1901

from 193 mills. meaning each mill employed Rs. 0.8 million 01' paid up capital on average.

8ince the total amount of paid up capital employed by the Japanese cotton industry in

1911 was Rs. 50.5 million (54 mills)， the amount of paid up capital of lndian cotton mi1ls

as a whole ¥vas more than double the amount of Japanese mills gathel'ed collectively.

Although the amount 01' paid up capital collected by the lndian cotton industry was

rather smaller than that of the Indian railway industry， the lndian cotton industry

sometimes experienced considerable difficulty in collecting the capital because it gathered

the necessary paid up capital in lndia where no effective stock exchange 01' industrial

banking system had yet developed. (the railway industry. as will be shown below， had

25

NOMURA Chikayl田 hi

gathered the necessary capital exclusively in London where such financial institutions

had already developed) Accol'ding to Table 2， on the othe1' hand， cotton mills in lndia

engaged about 2 lakhs of laboul' force at the beginning of the 20th century， which was

double the figure for the Japanese cotton industry in 1911， indicating that the industry

needed to recl'uit a laboUl' fOl'ce that was twice as large as that requil・edfol' a11 the

Japanese mills，

Table 2 Size of Cotton Milllndustries in India and Japan

Bl'itish India + Princcly States Japan (1881.1邸9.1903，1911)

Number of Paid up Number of

Number of Paid up Number of

persons capital mills

pel'sons capital mills

employed (1.000 rupees) employed (1.000 rupees)

1881 46.430 n，a， 57 n.a. n.a. 10

1891 111，018 n.H. 134 n.a. 15A15 34

1901 172，883 ': 169，890 193 n.a. 50，593 I 54

1911 230，649 206，986 263 i 93.987 95，661 i 137

1921 332，179 '138.723 2571 l1.a. l1.a. n.a.

Source: India: Go¥'ernment 01' India. Stαtistical A bstrαct 101' British lndia. Japan: 'I'he Japan

Cotton Spinners' Association.

This development of the cotton indusu'y of lndia in the 19th century was a l'esult of the

accumulated progress of each enterprise. Table 3 shows that the number of spindles of the

top 10 largest cotton miII companies in lndia. which l'oughly represents the size of

business of each mill， was much larger than those of the largest cotton mills in Japan，

although their size wm・estill less than half that of the largest mills in the U .K. and the

U .8. This international compal'Ison of the size of the miU business also suggests that

lndian cotton mills must have needed to set up an efficient corporate ol'ganization.19i

Table 3 Top 10 Large Cotton Mills (number of spindles) in Each Leading Cotton Producing Country

1884

U.K. U.S. India Japan

J.Mayall HUl'mony ， 275，000 l'1I1aneckji

110，640 Osal<a 60，391 Petit

Crossoss & 326，090 Wamsutt.u

:New 94.108 Sottsu 35.328

Winkwol'Lh 203，000 IDh~l'mscy

Musgrave 257.714 Amoskeag 170，000 Oriental 87.2381Mie 30.672

Sidebotlom 293.000 h恥'101'1γr力. 156.480 8a800n S.& W. 50.220 I Kancgafucl】i 30.528

J.& J.Haves 229.880 Lonsdale 151.824 Western India 3i，392lNaniwa 30.280

26

Influence of the Evolution of Corporate Orga凶zationon the Progress of Large Scale Business Enterprise of India in也:e1併白nωry

J.Wood 204.000 Boolt { :~~…ω 36，840 Hirano I 26，680

G.Mayall 200.000 Pacific 136.000 I Ivl.Gokuldas 34，336 Kanakin 19.906

1'.1'aylor 182，000 Dwrighl 120，000 I Anglo-Indian 31.680 Tenma 16，388

，J.Marsden 182，000 Great Falls 120.000 New Gl'eat

30，664 Owari 15.328 Eastem

l'vliddleton & 177，660 f ... lassach usetts 119.528 三.:Iazagon 30，096 Senshu 15.136

Tong

1897

U.K. U.S. lndia Japan

J.Mayall 444.000 I~'~'~'~ Knight

388.862 Maneckji Petit 131.132 Kanegafuchi 81.778

Cl'ossess & 325.430 Amoskeag 290.000 J.Sassoon 90，096 ス但 56，784

Winkworth

1¥.1 usgra ve 320，000 Fall River 285.000 . Empl'ess 76.684 Osaka 52.297

Sidebottom 293，000 Harmony 275，000 Victol'ia 71.293 Nippon 40.194

Howe Bridge 250，000. Wamsutta 219，216 Bowl'em 65.148 Settsu 38.016

Hyners 230，000 Lonsdale 181.370 01匂ntal 64.102 Owari 30.340

J.Wood 221.000 Pacifie 180.000 Bengal 62，972 Amagasaki 29，873

HOl'rockses & 220.000 MetTimack 158.976 Dunbar 60，880 Hirano 27.616

Grewdon

J.& J. Haves 216，518 Berkshire 156.292 Sassoon S.&W. 53，624 Kanakin 26.096

BadO¥v & I 152，9921Swa的 h 50.7りaniwa 25，953

Jones

Source: Yonekawa (1997). pp.35-8.

The statistical analyses of the size of business of the two industries collectively suggest

that some leading industries of lndia in the 19th century， which were of international

standal'ds in tel'ffiS of the size of theil' business， must have faced the serious necessity of

establishing a proper corporate ol'ganization to conduct their input and output

transactions effectively， just as some inclustries in the U.S. theじ.K.and Japan did. How

did lndian industry develop such corporate organization? How influential was the

developed corpol'ate organization on the progress of each enterprise of specific industl'Y?

These questions is to be answered in the next section on the basis of a case study of the

railway industry in the 19th century.

3. Development of Corporate Organization of the Railway Isndustry

Fol' the purpose of pl・omotinginternal and external trade as ¥vell as of raising the

27

NOMURA Chikayoshi

administrative and military efficiency in governing the lndian sub continent， the

Government of lndia proposed to construct a l'ailway net¥lw'Ork in India in the 1840s. The

first railway company was incorporated in 1849， having run the first train on 16 April

1853 between Bombay and Thane， a distance of 34 kilometres. The first venture was

followed by sequential establishments of other pl・ivateas ¥vell as state railway companies.

¥Vith the result that， by the beginning of the 20th century， India had 34 thousand miles of

railway network that employed more than 600 thousand people (Figure 1)

Figure 1 Progress of the Railway Network in India

(b)

(c) 、、• •

-d ，

j

k

1901 (24，105r副 teml刷。pen)

< ，回~ .. ，ー字句-....6 笥調。.由民M

The lndian railway industry consisted of dozens of l'ailway companies that were

managed by private companies， by the Government， 01' by princely state8.20) Although the

share of companies managed by private bodies was considerable initially， it consistently

decreased， especially after the beginning of the 20th century when the Government of

lndia stal.ted to nationalise the l'ailway network. resulting in most of the management of

one of the wo1'1d' s largest railway networks being put into the hands of the Government

28

lnsuenωof the Evolu由nof白 rporale0喝anizationon the Progr国 ofLarge scale s'凶in悶EnIeI'triseof India in the 19也Century

by the time of independence.2l)

Even before the nationalization of the railway network was initiated at the beginning

of the 20th centm'y. some 01' the dozens of privately managed railway companies in the 19th

century were huge businesses by international as we11 as lndian standards. ln terms of

the numbel' of employees. fo1' instance， the East lndian Railway Company， one of the

leading railway companies in colonial lndia in the 19th centul'Y. had more than 30.000

employees as opel'ational laboul' as early as the 1880s. while the Great lndian Peninsula

Company also engaged about 30.000 people to operate the railway network (Table 4).

According to Chandle1'. the amount of operational labour employed by the Pennsylvania

Railroad Company. one of the lal'gest l'ailway companies not only in the U.8. but also in

the world then. (the lat'gest in the size of capitalization among a11 the railway companies

in the U.S.. Rs 2.593 mi11ions. and 5th in operating mileage. 7.950 miles. both in 1893f2i

¥vas 50，000 - 55.000 men in the 1880s. indicating that the two lndian railway companies

were. presumably. among the largest railway companies in the world at that time. at

least in tel'ms of employees fo1' raihvay operation. ¥Vhile the scale of business of each

railway company must have exceeded that of companies in other business fields not only

in the U.8. but also in other countries at that time. the scale of business of these lndian

railway companies meant they could be considered as among the largest business

entel'prises in the world then.

Table 4 Number of Labourers Working for Leading Railway Companies of Coloniallndia

~tadms & ~ol.th Oudh & South :~ssam ~~e l1 glll. '-Ñ'~:.~il~ ~'lstrm I • ~.st I~~di~;l 11PIlgal XagPIEr W t ~.~gal .!n~ian 1 Pe~~i~~~~i

Southel'l1 W Hohilkhand lndian estcl'n I1mSllJnr Ivlahrattn ~'('.~t(' 1'I1

Railway Hailway HnilwllY Rllilway 11~~;iï~:~~; Hailwny Railway l' R~'Ù'~~; R~il~~~; I Hailway

1885 l1.a. 1.931 2.1i3 (i.5!)8 42.220 3・1.431 14.328 11.11. 12.1181 7.256 1895 n.a. i.170 (i.049 11.042 33.682 25.593 18.816 30.395 8.526 8.831 190.j 2.590 1O.85i 8.86i 11.959 34.380 I 29.459 18.220 2i.522 9.548 6.931

1915/16 2.837 12.99!) 7.447 12.356 31.7961 30.380 14.201 29.598 8.083 I 8.6321 1925/26 3.084 15.8.19 7.113 13.998 36.15i 1 2i.238 13.49.'5 30.276 l1.n. 8.633 1935/36 4.511 18.110 7.551 I 18.(j96 34.5741 2a.078 13.729 29.066 I1.U. 10.1961

Source: Morris and Dul】Icy(1975).

Due to the significant size of the business of the l'ailway companics. the input and output

transactions fo1' constructing and opel・atingthe railways were huge. resulting in the

establishment of effieient corporate organizations to coordinate these transactions being

sevel'ely required. This was one of the necessities for stcady development of the railway

enterprise. On the basis of secondary sources as well as a few govcl'nment reports. we will

29

NOMURA Chikayoshi

study how corporate orgunizations， especially corporate organizations 1'01' cOOl'dinating

transactions related to the two main inputs. capital and labour. we1'e established.

3.1. Capital Market

Regarcling collecting the necossary capital fo1' the business. the Inclian 1'ailway companies，

either p1'ivately owned 01' slale-owned， had less difficulty 1'0l~ th1'ee reasons.

First. almost all the lndian l'ailway companies in the colonial period raised the

necessary capital exclusively in London ¥1lhich had sufficient capacity and experience to

raise the amount of money the Indian railway companies required.23; Table 5 shows that

London financed almost 99 pel' cent of the total capital of the lndian railway companies

(roughly equal to i200 million). which made. according to l(el'l'. Indian railway companies

the single largest target of investment of British investors within the nineteenth-centul'Y

British empil'e.:W This concentrated collection of necessary capital in London is. for

instance， correctly described by Sharma. He wrote. '1'he total number of shal叶101ders

and proprietors of the seven Guaranteed Railway companies (some of which occupied the

greatest share of the railway industry in capital and laboul'...quotel乍 note)was about

46.600 on 31 st Oecember 1881， out 01' which only 267 were registered in India. while a11 the

others were registered in England. Out of 267. 101 were European and 166 were native'.2・，j)

Table 5 Amount of Capital Raised for Railwaγs of Colonial India as well as for AII Joint Stock

Companies in 8ritish India and the T otal National Debt Collected in India (in Rs. Lakhs)

9 9

Ic叩 italfor・ Capital fOl'

Ca)Jital fOl' nll joint Capital for 1¥11 joinl Ca~~tal fol' "~t~:'I~" t¥ationul Cal~~ tal 1'01' I "~t‘ ~~'k'- ;.Jnlionul

railways railways i rupee bond l railwHYS rai1w~~'s I co~】13UI11.05 rupue bond mised in cOl1lpnnws raised in raised inrtll.setl .l.Il met in raised inlral.SEEl.1.11 met in London lndia . B;:i~i~i;' lndia London lndia 'B;.i;i~I~" lndia

lndia lndin

1860 2.666 n.a. 日.11， i.297 1900 :12.753 200 3.400 12.720

18iO 9.001 n.lI. 11.11. iA20 1910 ，la.605 :100 6.300 16.064

ヨ~Iイ泊7 n.lI. 9.151 1920;21 61.581 15.800 38.189

1.29i ， 70 2.:UJO 11.344 1930/31 85.481 1，500 2i.100 ム

Source: Column 1 and 2: Govornmenl 01' lndia. Stαtistieα1 Abst，rαct /07' B7'itish lndia. and Morris and Dubley (1975). Column 3 and 4: Government of India. Statistical Abst.r，αcl /07' British

lndiα.

Second. the Go¥'ernment of lndia guaranteed a level of pl'ofit for investment not only

30

Insl路nceof the Evolution of白r卯rate白ganiza伽non the pr叩 四ofLarge scale Busin悶Enterpriseof Ind泊inthe 19白白ntury

for state-ov，;ned companies but also for privately owned companies. especially in the

initial phase. ¥vhich helped attract British investment in the industry. The Government

guaranteed intel'est of 4.5 to 5 per cent to a11 investors in the 1850s and 1860s. although

the Government decreased the rate afterwards. 1'his“guarantoed system" was provided

by the Governmont 1'01' the purpose of encouraging the investmontトofBritish investors in

India where previously they must have felt the1'e ¥vere serious risks.:!lo) The average rate of

return 01' domestic investment OPpol'tunity for 8ritain fOl・ 1870-1913was. according to

Edelstein. 4.52 per cent annually while the average I'ate of return of British debenture for

the same period was 3.35 pel' cent annually. suggesting that the guaranteed rate， 4.5 to 5

per cent， was just sufficient to att1'act investors in London.:!j) Thc possible appropriateness

of the rate of 1'etu1'n is suggested by Ke1'1'. He w1'ote.

British capitalists wel'e reluctant to risk theil・moneyon lndia railway ventures

and the Dil'ectors of the East lndia Company had no wish to build railways...and.

at least initially. the Dil・ectorshad little enthusiasm for guaranteeing to private

capital... Finally. in l¥.t1arch 18ω・… theEast lndia Company agreed on terms with

the Great lndian Peninsula Railways and the East lndian Railways.... whereby

the two companies would build and opel・atetheir respective lines with a

guaranteed five pel' cent return on their stockholders' investment. assured by

the revenues of the Government of India.2s。

1'hird. after the period of the government guarantee of the 1880s. the Government

started nationalizing the raihvay business gradually. although the p1'og1'ess of the

nationalization was slow until the 1920s. resulting in the railway network being slowly

but surely financed by the Government of India which had huge capacity as well as the

ability to raise funds easily in Lonclon. 1'here were two methods of nationalization. First.

almost all new lines wel'e constl'ucted by the Government directly afte1' the 1880s. Second.

the existing private railway enterprises were purchased by tho Government. Under the

scheme 01' nationalization. about 70 per cent of railway mileage was unclel' the ownership

of the Govel'nment by the beginning of the 20th century.

1'he concentrated collection of almost a11 necessary capital in London could be

attributed to three causes. F'irst. the Government of India. which had authorised the

railway business in India. preferred. 01' demanded that the necessary capital be collected

in London to provide a favou1'able investment oPPOl.tunity fo)' investol's in U.K. Second.

31

NOMURA Chikayoshi

lndia had hardly any engineering industl'Y that could have supplied railway material such

as rails. wagons and so on. meaning the Indian railway industry needed to purchase

almost a11 the necessary material abroad where payment in sterling had a much large1'

advantage than payment in rupees. Third. although India had a well established market

fo1' transacting national bond already in the 1860s. it did not have a similarly well

established capital market for business enterprise managed by private 01' semi public

bodies. This inadequate functioning of the capital market fol' private and semi public

concerns is clearly seen in Table 5 which shows. in the fourth column. the total amount of

national rupee bond. which was t1'aded mainly in lndia， and， in the third column. the total

amount of paid up rupee capital in India. Due to the inadequate functioning of the capital

market for business enterprise in lndia， the necessary capital fo1' the railway had to be

collected from the London capital market， which had the experience and capacity to

provide a much larger amount of capital than lndian railway companies needed.

¥Vhile the concentrated collection of capital in London helped to gather the necessary

capital fo1' the development of lndian railway industry quickly and smoothly， it might

have deprived the Indian capital market， especially the ma1'ket fo1' share capital of private

concerns， of the opportunity to gl'OW. According to Table 5， the total capital raised by the

railway industry was more than ten times the total paid up capital collected in the Indian

money market in 1890; thus， only a small portion of the capital raised by the railway

industry， if it have had been collected in India， might have had a positive influence on

forms of transaction of the lndian money mal'ket. whose actual development during the

colonial period had been completely inadequate to encourage 1万台ateconcerns to collect

the necessary capital at reasonable cost and risk.2!1:

3.2. Labour

ln the case of labour， the Indian l'ailway industl'Y expe1'ienced serious difficulty in

gathering large numbers of skilled， semi-skilled and unskilled worke1's. The skills

requi1'ed of the labour fOl'ce varied considerably from top management staff to physical

labourers at const1'uction sites. while the number of labou1'ers as a whole increased from

about 400，000 persons in the 1880s to 850，000 in the 1910s. Recruiting， t1'aining， and

managing such a huge labour force with various types of skills was not an easy task fol'

the industry thl'oughout the colonial pel'iod.

The types of labour required by the railway industry can be categorised into 1'oughly

two: labour fo1' construction of rail way lines， and labour for operating the railway

32

Influencc of the Evolution of Corporate Organization on也eProgress of Large Scale B凶 h臨Enterpriseof lndia in也e19也Century

network. 1n the following， we will firstly study how the 1ndian railway enterprise

established Corpol'ate organization to coordinate transaction of construction labour on

the basis of tho pioneet'ing works of 1an Kerr. an eminent historian of the railway

industry in the colonial period. Then we wiII examine the progress of corporate

organization fOl' operationallabour based on a fe¥v government l'eports.

3.2.1. Construction Labour

Although ¥':e do not have exact data showing the amount of labour employed for

construction in the railway industry in the colonial period， we can make an estimate.

According to tho estimation of Kerr. the 1ndian railway industry employed 180，601 to

221.253 men per year from 1859 to 1900 on average， on the basis of the assumptions that

the industry l'equired 126 to 155 men to construct one mile of railway and it took 2.5

years to construct one mile of railway line on average.抑 Thisostimation indicates that

the railway industl.y might have employed 1-2 million labourers fo1' construction in the

second half of tho 19th centul'Y if ¥¥'e could assume that one labourel' continued to work for

5 to 10 yeal's.

The huge number of labourers for railway construction， most of whom were Indian，

wel'e recruited and controlled by two different systems: the contractor system and the

departmental system. Under the contractor system， on the one hand. substantial

contractors， who were not employees of the railway company and. in most cases， had

important knO¥vledge as well as wide-ranging personal connections in areas around work

sites， were entrusted by a specific railway company to complete construction of some part

of the railway line within a specific lime period. Under the contractor system， according

to Kerr.‘a substantial contl'act was a first-order contract authorized by a company...

Substantial contracts often had the autonomy to sub-contract.... but they also had legal

binding contracts that made them responsible for the completion of theil' contract by a

certain date' :1I) On the othe1' hand. under the depal.tmental system. a railway company

did not entrust the construction business to an outside agency but conducted the business

themselves.じnderthe departmental system， such a specific department was headed by

the railway companies' engineer. who was a basically a technical expert without

sufficient knowledge of the local area. Such engineers， according to Kerr， sometimes

subcontracted part 01' the construction business to a petty contracto1' without exchanging

a written document as substantial contractors did under the contl'actol' system戸)The

petty contractor stood ‘between European levels 01' middle and upper level management

33

NOMURA Chikay田 hi

and lndian workers who actually performed the manuallabour' .:¥:11

lndian railway companies used the two systems consistently throughout the colonial

period， although the shal'e of the departmental system increased gradually. The gradual

increase in use of the clepartmental system was due to the accumulation of local

knowledge as well as pel'sonal conneclions on the side of company engineers in accordance

with building up these engineelぜ expel'ienceof railway constl'uction. The accumulation

of local knowledge 01' the company eng'ineer made it possible for him to conduct necessary

business without the help of a substantial contl'actor. which greatly contributed to the

gradual increase in the share of the departmental system.:lO

Under both the substantial contractor sy叫 emand the departmental system， railway

companies recruited， trained. and managed lndian labourers. who actually performed the

manual work at construction sites. through petty contractol's. Kerl' clearly illustrates

how lndian manuallabour was recruited as well as how it was put unclel' the direction of

petty contl'actol's. He Wl'ote.

Workel's came to the construction sites in units of varying sizes. recruiting from

among the groups... Gangers-who Wel'e either themselves petty contractors. 01・

who sold the laboul' power of the gang to someone else on a task-work. piece

wo1'k. hourly. 01' daily-rated basis-we1'e the point of aI.ticulation between the

actual ¥¥TOI'kers and th05e who supervised the construction process... The gangers.

val・iouslystyled muccadum， sαrdαrormαist ，~y. were the ones who made advances

to wOI'kers in ordel' to persuade them to come to the work-sites... the gangel'S

had an extra-economic connection with their gangs: connections of common caste

membership. of shared kinship. of a common point of ol'igination in the same 01'

a nearby village. It was these extra-economic connections that facilitated the act

of recruitment and helped to ensure the security of the advance.:m

According to Korr. Indian manual labour. especially unskilled lndian labou1'. including

women and boys. formed 86 per cent of the total workfol'ce 1'01' railway construction.:耐

The unskilled labour came from various social backgrounds. among which‘circulating

labour' seems to have dominated.:!'i' Kerr w1'ote，

YIy sourees suggest that this body of cII・culatinglaboul' increasingly came to

form the backbone of the unskilled segment of raihvay const1'uction workers and

34

InfI田nceof the Evolution of Cor阿梅O耶組制onon the Prog陀SSof Large scale Busin臨Entet]>由eof India in血e19也伽1旬W

that those who comprised this swelling body of workers proved even more willing

and able to move regionally and then inter-regionally in sea1'ch of construction

wo1'k.エ，1anyof these types of v.:orkers existed in the pre-railway age. Locally

recruited labour nevel' disappeared... but it became increasingly less important...

most of these workel's， particularly the earthworkers， were from the lowe1'

margins of lndian society... Some unskilled railway constl'uction worke1's came

from the tribal populations of India and neighbouring f1'ontier a1'eas.

Construction in the western and north-western frontier areas drew upon the

tribes of Afghanistan， Baluchistan and the frontier areas of Sind and

Punjab... the Santhals， the Dhαrgurs and the hill tribes helped to build the EIR

main line in parts of 8engal in the late 1850s and early 1860s... T1'ibes were a

prominent part of the massive workforce assembled at the Bhore Ghat.:Id:

Colonial lndia might have succeeded in developing an efficient corporate organization to

gradually coordinate the transaction of labour powel' fo1' railway construction. Kerr

summarised the development as follows.

lVlany imperfections and immobilities existed in the labour market in the 1850s

when the railway construction first began... But soon， for all but the most

isolated of constructions. extraordinary efforts on the part of capital were no

longer needed. The labour markets became better established and better

integr叫 ed.80dies of migratory workers， skilled and unskilled， came to know of

employment opportunities. The crucial intermediaries. the emerging petty

capitalists. began to link capital and labour across regions and beyond.

Established contractors... knew how to obtain gangs of v¥ノudderswhen needed.

Even the fresh-faced 8ritish Assistant Engineer at his first construction 01'

reconstruction job could. well before the century's end， expect in most

circumstances to have petty contractors clamouring fo1' work and assuring the

young sahib that the embankments would rlse with great rapidity because so

many people ¥vould be put to work.:I!lJ

Part of this development of efficient tt'ansaction of labour power was. according to Ker1'，

a result of the c1'eation of a regional and inter-regional labour market fostered by the

expansion of the l'ailway network. Kerr firstly wrote，‘Operating railways enhanced the

35

NOMURA Chikay田 hi

physical mobility of workers. thus I'urthering the integl'ation of the labour markets over

wider distances'. Then. he concluded.

[t]here was no enduring shortage of labour... we can also find support 1'01' this

view in the fact that there 'was a considerable rise in wage rates after the

mutiny... Oemand outstripped supply for a period 01' time in many regions.

Moreover. railway builders and P¥VD (Public Work Department of the

Government of India.. .quoter' s note) engineers competed with one another for

the available supply. However. the inadequate supply of labour was also a

function of imperfections in the regional labour markets: there were still major

immobilities that restricted the flow of labour. Higher wages. however. had the

dcsired effect and more people made themselves available for railway work... The

fundamental issue ¥vas not the availability of the necdccl amount of raw labour

but the creation of more integrated. wider spread labour markets that could

connect a sufficient supply of workers to the demands of capital for particular

quantities of labourers at particular work sites.lll)

The development of an efficient mm'ket for construction labour must have helped

establish one of the largest railway networks in India in the 19th century.

3.2.2. Labour for Railway Operation

In addition to labour for railway construction. the railway industry needed to recruit and

tr出nlabourers for operating the railway network. According to l¥tlorris and Dubley， the

number of labourers for operating the railway network increased from 207.788 in 1885 to

428，970 in 1905. indicating that a huge number of labourers were engaged in the business

of operating the railway network (Table 6). As is indicated by Table 6 apparently. a large

part of the huge working force was composed of Indian nationals. Among 207.788 men in

T able 6 Total Number of Labourers Working in Railway Companies in India

Europeans Anglo lndians Indians Total

1885 I 4.:1LO 4.402 203.478 207.788

1895 11..59'1 6.329 2G2，219 266.813

1905 6.320 8.565 422.650 428，970

1915/16 7.132 I 9.821 590.010 597.142

1925/26 4.889 13.097 710.435 715.324

Sourcc: r ... lorris and Du hley (1 ~)Ï5).

36

lnfIuencc of the Evolution of白rporateOrganization on齢 Progr閣 ofLarge Scale Busin舗Enterpriseof India in the 1911>臼ntury

the total working fm'ce in 1885. 203.478 were lndian nationals. and in 1905 they numbered

422.650 out of 428.970. indicating that almost 96 per cent of operational labour was

supplied domestically in the 19th century.

In accordance with the wide ranging types of businesses required 1'01' operating a

railway network. there were various positions. from top management staff to gangmen.

On the one hand. most of the workforce who were qualified for top 01' middle

management. including general managers. divisional managers. station masters.

engineers. fitters. drivers and guards. wel'e exclusively recruited fl'om abroad throughout

the 19th century..ll: On the other hand. some lower management staff and most of the

skilled/unskilled labourers such as porte1's. junior fireman. gangmen and other unskilled

wo1'kers. were reCl・uiteddomestically.

Although we do not have sufficient evidence sho¥'，，'ing how this huge number of lndian

nationals working in various posts were rec1'uited 01' trained. we have some evidence

showing how lndian labourers working in maintenance wOl'kshops of the railway

indust1'y. which was one of the most impo1'tant units fol' railway operation. were

recruited and trained. According to some estimations. Indian labourers working in

maintenance workshops occupied about 23 per cent of the total operational workforce of

the 1'ailway industry at the beginning of the 20th century; 12: and from this we might be

able to derive some idea hO¥"， the operationallabour force was recl'uited and trained.

The lndian milway industry had. in tota1. 91 maintenance wOl'kshops in 1905 (including

state as well as private railways). Since the total number of labourel's working in such

workshops was 77.633 in 1905. the number of labourers in each workshop was 853 on

average.~:J: Among the almost 100 workshops. some employed more than 10.000 men in a

single work site. For instance. the Jamalpur wOl'kshop complex of the East lndian

Railway Company employed 11.046 men in 1915， while the Khal'agpur wm'kshop complex

of the 8engal ~agpUl' Railway Company engaged 7.270 in the same year..J4i The

employment of such a huge number of labourel's in a single worksite made these

workshops some of the most important industrial centres of colonial India.15)

Wl'itten as well as oral evidence given by A.C. CalT. chief mechanical engineer of the

8engal Nagpur Railway to the lndian Industrial Commission in 1916/17. apparently

shows f1'om where maintenance workshops recruited their laboul' fOl・ce.

According to Carr. maintenance workshops recruited labou1'ers from three sou1'ces;

European 01' Anglo-Indians. Indians of some education. and illite1'ate 01' pal，tly illiterate

Indians. Among the thl'ee sou1'ces. CalT Wl'ote that illiterate 01' partly illiterate lndians.

37

NOMURA Chikayoshi

most of whom were recruited from the lndian ag-ricultural class， 1'01'官I町me吋【da la剖r噌'gepa削l'‘tもof

the lab】ourof rail、way机wo1'kshops."恥1

Oぱfln【dωlianrailways did no叫L【d巾i怜emandthat candidates fo1' operationallabour in maintenance

wo1'kshops had acquired literacy no1' had wo1'king experience in modern factories before

their employment， and， on the othel' hancl. that the workshop p1'ovicled an opportunity

for such candidates to master the necossary skills after employment. The opportunity to

master necessary skills 80ems to have been effective. accol'ding to the statement of Carr.

In his oral evidence， he said that despite the disad¥'antage of illiteracy， many of the

illiterate 01' partly illiterate Indians， when supervised by a competent fOl'eman， de¥'eloped

into first class workmen. Additionally， Carr stated that some of these illiterate 01' partly

illiterate lndians could ha¥'e been promoted even to the post of foreman and chargeman if

they had the opportunity to receive suitable education in theil・youthafte1' the

employment in the WOI・kshops.1itThis background of candidates fo1' wOl'kshop labou1'，

namely coming f1'om the agricultul'ul class ¥vithout sufficient educational background，

was， according to the main l'eport of the Royal Commission of Laboul' in India， sha1'ed by

candidates for oper・ationallaboul' in the engineering department， another impo1'tant

depal'tment for railway operation. l'he main report stated that 'the engineering

department gives emp!oyment to the largest single class of labour， namely， gangmen who

al'e largely unskilled and consist mainly of hereditm'y agl'Icultu1'alists with a decided

prefel'ence for agricultul'al wo1'k'. I~: This evidence clearly suggests that the agricultul'al

class formecl one of the most important sources of operationa! labour of railway

companies in colonial India.

Although the e¥'idence of CalT and the statement of the main report of the Royal

Commission of Labour in India refelTed to the educational and social background of

labourers， they did not mention who recruited such candidates 01' who had actual

authority to decide on the employment of the candidate. Although the final authority to

l'ecruit as well as to engage was in the hands of the general manager 01' agents of each

I'aihvuy company， it is 110t realistie to consider that such top management staff had the

actual authority to recnlit as v，:ell as cngage each labourer.';!ll In the case of other LSBEs

of colonial India， such as cotton companies 01' jute companies， it is well known that a

middleman callecl a muhllαdαmOl・ sardar¥'las entrusted by top management staff with

almost full authol'ity 110t only to l'ecruit as well as engage but also to train and dischm'ge

ol'dinary laboUl'ers.:;f11

H.egarding the dctail of the characteristics as well as the activity of

the muhhαdam. 01' sardar， we have several il1・depthresearches all'eady， while we know

38

Influencc of the Evolution of白 rporate白ganiza出n00 the progr国 ofLarge Scale B凶n閣EnterpIIseof Ind泊 inthe 19也白蜘ry

only. on the basis of the statement of the main repo1't of the Royal Commission of Labou1'

in India published in 1931. that the actual authority fo1' recl'uitment and engagement of

some of the operational labou1' of raihvay company was. in the 1930s. in the hands of

permanent way inspect01ザ.‘station masters' 01‘'traffic inspectors' .，，1) Neither the main

report nor othel' sources， to my knowledge. give further delails of actual characteristics

01' the activities of these officials.52)

According to another part of Can匂 statement，only a few labourers were supplied from

the two othel' sources: lndians with some education and European and Anglo-Indians.

Since a large pa1't of the skilled laboul' force came from illitel'ate 01' partly illiterate

classes of Indian agricultUl百lists.on the one hand. most of lndians of some education felt

a strong reluctance to do work necessitating skilled manual laboul' along with such

illiterate labourel's in workshops. On the other hand. the source of supply of Europeans

as well as of Anglo-Indians was. undoubtedly small: thus. accoJ'()ing to Carr. Europeans

and Anglo-Indian were not an important source of labour for workshops.5:l)

Once a labourer was engaged in a maintenance workshop， he had the opportunity to

receive training under the apprentice system of each railway company. although

opportunity of lhe training was far fl'om sufficient in number. According to Ca1'1'. most

large railway companies had an apprentice system for Europeans， Anglo-Indians. and

lndians. Undel' the system. Car1' said，‘app1'entices in a large wo1'kshop are influenced by

the standa1'd of wo1'kmanship maintained by a number of skilled wo1'kmen. to a degree

which is impossible in an institution where there may be only one 01' two skilled

lllS乱tructωors，such as a technical college 01' i泊ndu山l脂stl'ialschool. in which the majo1'ity are

leal'ners' .，，1: In the case of the apprentice system of the Bengal Nagpur Railway Company.

laboUl'e1's received not only practical tl'aining in specific techniques for specific skilled

posts but also had lessons in I'eading， writing. elementary a1'ithmetic and d1'av，'ing.55)

Under the apPl'entice system， teachers of practical training wel'c actual fo1'eman 01' skilled

labourers who came fl'om European countries on employment contracts lasting several

years， especially in the initial period of railway operation: thus， according to Kerr，

'Europeans...wel'e important transfe1' agents of railway technology...[w]hat was

transfe1'red... is not the discrete technology...・buta technological set of processes.

Railway workshops were...locations where tool5 and machines imbedded in organised，

complex ¥vol'k pl'ocesses wel'e operated. for the main part， by [ndians' :;1;:

ln addition to the apprentice system. some large scale l'aihvay companies provided

technical schools. night schools， and day schools fo1' theil' apPl'entices， part of whose

39

NOMURA Chikayoshi

expenses were financed by grants from the Government.

Such labourers in railway workshops contributed greatly to the development not only

of the lndian railway indllstry but also of other Indian indllstries such as mining 01' the

iron and steel industries since these industries hired such trained labour away from

railway workshops to meet their own demand for skilled labour;f.ii thus，‘[t]he

workshops. therefore， will neecl to be viewed as centres of industrial work and as centres

of industrial education'. alihough the apprentice system and the number of labourers

supplied by such workshops was very inadequate.訴

4. Conclusion

Our aim in this paper. was to make a small step towards clarification of the influence of

the development of corpomte organization on the development 01' LSBEs in colonial lndia

in the 19th century. ln the examination above， we have. hopeful1y. clarified the following

two points. First. ¥".e have sho¥¥'n that lndia had dozens of LSBEs in various business

fields of international standarcl as early as the mid 19th century. Of particulal' note is that

the scale of business of some railw的rcompanies was. presumably， only slightly smaller

than that of lhe Pennsylvania Railroad Company， which was one of the world's largest

private business enterpJ'Ises at thc end of the 19th century. Second. on the basis of a case

study of railway companies. we ha¥'e briefly examined how LSBEs in lndia in the 19th

century developed an efficient corporate organization to achieve smooth transactions of

huge number of inputs. especially regarding the labour force， which was indispensable for

LSBEs to develop its full potential.

There are still ¥'arious matters to be studied to pro¥'ide further clarification of the

issues we have examined. First， we have to clarify how railway companies developed

corporate organization to coordinate transaction of other essential inputs such as coal 01'

railway materials. :¥:10roo¥'er. we nced to examine how railway enterprises developed

managemenl systems headed by professional middle managemenl staff to coordinate the

functioning of various sorts of corpomte organizations， each of which ¥vas to coordinate

lransaction of specific inpllt 01' output. Third， we should expand the scope 01' our analysis

to LSBEs in other business fields. These challenges remained lo be studied in future.

40

hu1出nceof the Evolution of Corporale 0ほanizationon the Progr開 ofLarge S偲leBusiness Enlerp由eof India in the 19也白:ntury

[Notes】

1 ) League of Nations (1945)， p.84.

2) Chandler (1977)， Chandler (1990)， Chandler. Amatori， Hikino (eds.l (1997).

3) Chandler (1990)， p.18.

4) Chandler (1990)， p.1.

5) Chandler called such recurrent innovations led by new transportation as well as communication

systems in the second half of the 19th century “Second lndustrial Revolution". Chandler. Amatori

and Hikino (1997). p.8.

6) Chandler wrote. 'in the new capital intensive industries with scale dependent techno10gies the

long term financial returns on investments in physical facilities and human resources required

more than just building manufactul'ing plants of optimum size. The throughput needed to

maintain the optimal scale required careful coordination not only of flows through the processes

of production but a1so flows of inputs from supp1iers and flows of output to intermediaries and

final users. Such coordination did not， and indeed could not， happen automatically. It demanded

the constant attention of managerial teams'. Chandler and Hikino (1997)， PP.29-30.

7) Chandler. Amatori and Hikino (1997)， p.8.

8) Buchanan (1934)， Anstey (1929)， Morris (1983). Morris (198i). Ray (1992).

9) Krishnamurty (1982) p.535.

10) See reference and footnote of Rungta (197(}). Morris (1983)， Ray (1992) Roy (2006)， Tripathi (2004).

11) Bagchi (198i)， Bagchi (1987)， Bagchi (2003)， Hurd (1982).

12) Morr色(1983)，Chakrabarty (1989).

13) Railway: Morris and Dubley (1975). cotton: Bombay Mill Owners' Association. jute: Goswami

(1991)， p.3.

14) U.S. Department of Commerce Bureau of Foreign and Domestic Commerce.

15) Mitchell (1988).

16) Railway: Morris and Dubey (1975)， cotton and jute: Government of India. Stαtisticαl Abstr，αctfor

British India.

17) Japan Cotton Spinners' Association.

18) U.S. Department of Commerce Bureau of Foreign and Domestic Commerce.

19) How Japanese cotton mills developed corporate organization in the 19th century and how

influential the development was on the progress of the Japanese mills have been popular research

topics of economic historians of Japan. For instance， see Takamura (1971).

20) On the history of Indian railway industry， see， for instance， Sahni (1953)， Prasad (1960)， Khosla

(1972)， Rao (1975)， Hurd (1982)， Awasthi (1994)， Kerr (1997)， Kerr (2001). Kerr (eds.) (2007).

21) Even after the Government of lndia nationalised some railway companies that used to be owned

by private enterprises by purchasing share capital of the companies， the Government in the

colonial period sometimes subcontracted management of the companies to private companies. This

resulted in coloniallndia having' a numbel・ofrailway companies owned by the state but managed

by private bodies.

22) Chandler (1977). p.169.

23) Kerr (1997)， p.2.

24) Ibid.. p.4.

25) Sharma (1990)， p.183.

26) The guaranteed system has been criticized severely by some historians of lndia as a system to

reward investors in London at the expense of the Indian tax payer. The guaranteed system itself

as a method of attracting capita1 investment was， however， not unknown outside lndia at that

time. For instance. according to Prasad. France and some British colonies introduced similar

41

NOMURA Chikayoshi

systems. However， lhe systems intl'Ocluced outside India guaranleed the 1l1'0fit of invesLol's only

when such a guarantee did 110t CUlISC fisca! deficit. giving railway cornllanies the incentive to

impro¥'c thc cfficiency of management. Such an incentivc systcm was not given in the guaranteed

system introduced in India.

2i) Although some nalionalistic histol'ians of lndia havc pointed out that thc guaranteed rate of

1・'etumwas excessively high. Edelstein wl'ote that the l'ate was not‘exceedingly' high， whcn thc

risl{s involvcd in the fluctuation of the exchange 1'8to we1'o taken into cOllsideration. Edolstein

(1982).

28) Kel'l' ()997)， p.17.

29) The deprivation of OPl)ol'tllnity has been pointed Ollt by many histol'ians of India. Seo. fOl'

instance. Prasad (1960)， llA8.

30) Kerl' (1997)， pp.189-90.

31) Ibid.. pp.73・4.

32) Ibid.. pp.i3-4.

33) Ibid.. pp.187・8.

34) Ibid.. pp.61・2.pp.iO・1.p. i3. pp. i5-6， 1>11.82-3.

35) Ibid.. pp.118・20.

36) lbid.. I】.88，p.113.

37) Village labour seems 110t to have played an important l'ole in railway constrllction. ''1、hl'oughout

the half century， the I'ailways employed ¥'il!age labour fo1' building. But throughout the entire

pel'iod， and throughout the length and brcadth of lndia， the same cornplaint was rcpcated o¥'el' and

ovcr: thcse people were an unccrtain and unreliable sourcc of labour， particularly at hal'¥'est time.

The dictutes of lndia's climate madc agriculture (especially at hal'vest) and I'ailway construction

compctc fOl' dry-season laboul". Ibid.， p.94.

38) Ibid.， )).97， p.103.

39) lbid.， pp.120-L

40) Ibid・， pp.124-6. p.191.

41) Although the policy of 'Indianization'， which aimed to replace expensive European pet'sonnel

with cheupcl' lndian staff， stul'ted to be intl'oduced after1865， mainly to reduce laboul' costs. the

pl'ogl'CSS of Jndianization was qllite slow. Del'byshire (2007)， pJ>.301-2.

42) Nomura (2005). pp.248-9.

43) GO¥'cl'l1ment of India， Statistical AbstT'，αct for British lrldia.

44) Govcl'I1rnent of lndia (19l8).

45) Quoting Philip SCl'anton， Kerr Wl'ote that the railway workshop of lndia was "the point at which

people and machine meet"， Ket・J'(2007)， p.235.

46) Govel'l1ment of C.K. (1919). pp.649-50.

47) Ibid.

48) Govcl'nment ofじ.K.(1931). p.139.

49) On the fina! authol'ity on laboul' mattel'， Ibid.. pp.13i-8.

50) Chllkral】arty(1989)， DllS Gupta (1994). Chandaval・kal'(199，1). Basu (2004)，

51) Go¥'el'llmcnt of U.K. (1931). p.139.

52) Somc scholars impotuously claim that laboul' managcmcnt system where top management staff

cntl'ustcd almost alll'cCl'uitment and management of the IOW01' class of laboUl' to a middleman Iike

muluwdam 01' sard，αr was a labour management system peculiar to colonial India. Howevel'， it is

quite a well kno¥¥'n historical fact that sllch a laboul' management system was exlensively lltilizcd

in England as well as in Japan in the 19th century， (scc， fol' instance. Hobsbawm (1964): Littler

(1982): Odaka (2000)) What was peculial' to colonial lndin was that this managemenl system

42

Influence of the Evolution of Corporate Org副 zationon the Pr噂臨ofLarge Scale Bu血部Enterpriseof India in the 19也Century

continued to be employed in India even aftcr Lhe fil'st half 01' the 20th centm・ywhen the system in

other cOllntries had started to be replaced by a new management sysLem where top management

staff directly l'ecl'llited and controlled their lower dasses of labour. Needless to say. study on the

peculiarities of the Indian labour management. system in the first half 01' the 20th century is beyond

the scope of this paper. which has examined thc evolution of corporate organization in the 19th

centul'Y. Regarding details of the peculial' featul'es of the lndian labour management system as

well as possible eauses of continuous employment of the system in thc lirst half 01' the 20th century.

see. fol' instance. r、、lomura(2005). Chap.i. 01'. a I'evised version 01' this chapter. ~omura (2009).

53) Government of U.K. (1919). pp.650-1.

54) Govel'llment 01' U.K. (1919). p.650.

55) Ibid.

56) Kerr (2007)， p.255.

57) Government 01' U.K. (1919)， pp.650-1. Nomu!'a clarified how TISCO. the largest industrial ventul'e

of colonial India. I'ecl'uited skilled labour. and. sometimes foremen fl'om wOl'kshops of raihvay

companies in lndia. ~omu !'a (2005). Chaptm・7.

58) Kerr (2007)， p.259.

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【 2009~1~ 9 n 10日受付、 10月23日受理】

45

NOMURA Chikayoshi

19世紀インドにおける近代的大企業の発展と企業組織

野村親義

19世紀以降の近代的大企業の発展の成百が、大企業内企業組織の発展の成否によって、いかに/己布され

てきたか。このIIlJl、は、 uく欧米の経営史家によって問われてきた問いであるc 近代的大企業の発展の成

否は、大抗生産・大量販売による製品一単位当たり賀川逓減の成否に大きく依拠している。このことを念

頭に前くと、近代的大企業が順調に発展するためには、大田生産・大批販売に際し必要となる大日の投入財・

製品の効率的な取引を実現する企業組織の発展が、是非とも必要となる。 191吐紀以降の近代的経済発展の

重要な礎のーっとなった近代的大企業の発展が、企業組織の発展によって具体的にどのように支えられて

きたのか。このIIIJいは、そのため、ながく、欧米の経営史家の注目を集めてきた。

欧米諸II~ ほどではないにせよ、インドは191吐紀半ば以降、いくつかの近代的大企業を有してきた。事実、

インドの工業製品生産相は、航民地別の1926・29年すでに、オランダと同じ世界第12f¥'{.という地位を占め、

また、拙民地j羽インドの代表的な大企業を裂する鉄道~の'11には、世界有数の資本傾・属JH労働者数を有

す企業もあった2 こうした大企業の発展にも!日!わらず、インド経営史家はこれまで、これらインドの大企

業の発展が、企業組織の発展によってどのように支えられてきたのか、国際比較を念頭に附きながら、具

体的に明らかにすることは稀であったc 本稿は、植民地期インドの鉄道業の発展と鉄道業の企業組織の関

係に|期する分析を通じ、この研究上の担白を閉めようとするものであるo 小さいながらも試みられるこの

第一安は、政府報告書や公文書史料を広汎にHJt、るというよりは、むしろ既存の研究の再解釈に主として

依拠しながら、従米あまり住日されなかった191性紀インド大企業の発民と企業組織の発展の積倒的な関係

をIりlらかにしようとするものである=

46