“Once again, we see the need for a controlling interest by the state.” Nehru was hard-wired to see state control as the answer to every problem, but in this case he had almost total agreement. The chaotic state of Indian railway development could not be allowed to continue. Each princely state had built its own railway system; its configuration had been decided by the whim of the Princes. So had the routes followed by the tracks. They also had more to do with the wishes of the Prince than economic necessity. The investors who had built the lines had been guaranteed a five percent return on their investment by the government, so the financial viability of the lines had been of no great interest to them.
“In this case, you have an excellent argument, but there is a problem here. Under the 1849 agreement with the railway promoters, the railways built by them are to remain their property for 99 years. At which point, they will pass, without compensation, into the possession of the Government, which will have to pay for the machinery, plant and rolling stock. We can purchase the railway in question earlier by paying the full value of the capital stock and shares. Alternatively, the railway companies can surrender their line to us by giving six months notice and claim repayment of all the capital invested. We simply cannot afford to do either. We are barely surviving at the moment as it is. This kind of additional burden will finish us.”
“There is always nationalization without compensation.” Nehru liked the sound of that and knew it would resonate with the membership of his party.
“There is indeed.” Sir Martyn agreed. “But we have a problem there as well. The vast majority of the finding for Indian railway development came from England. For all practical purposes, Indian capital played a negligible role in building our railway system. The capital that came from England to India for railway construction formed the largest single unit of international investment in the 19th century. If we suddenly nationalize that without compensation, it will be a massive blow at the English financial system.”
“Is that such a bad thing?” Nehru was growing heated. “The railways destroyed much of our native industry. Traditional Indian goods have been replaced by factory-made items imported from England and distributed cheaply by rail. The construction of the railways created employment for coal miners, steelmakers and machine forgers in England, not India, and converted our countryside into an agricultural colony of England. The railways were not a commercial success until the early part of this century, yet the losses were not borne by the investors who built them but by the government and thus the Indian people. It is time those monies extracted from us were recovered.”
The silence in the cabinet room was profound. The subject of the railways themselves was almost immaterial compared with the yawning gap in perceptions that had been revealed by Nehru’s speech. It had literally never occurred to any of the Europeans present that the construction of railways had been anything other than an undiluted blessing for India.
“Perhaps this is an area in which we should advance carefully? The first step should be to arrange for the consolidation of the existing railway system into a number of regional railway authorities. The existing railway owners can be given shares in the new railway authorities proportionate to their investment in the original lines. Then, as we invest further in those authorities, bringing the lines up to a common standard, the government’s shareholding will increase. Thus, when the existing agreements expire in 1948, the transfer will have been completed in a proper and orderly manner.
“We must be wary that we do not alienate any of the likely investors in this country. Our economic success depends on attracting them into our fold and we should not mortgage that prospect by hasty action when, in eight years, the assets will fall into our hands anyway.” Sir Martyn looked around the room. The majority of the occupants seemed to accept that concept, although Nehru was still agitated by the mere mention of railways. It was probably a good time to move on.
“I do have some good news to relate. We have received word from Canberra, Johannesburg, Wellington and Ottawa that the proposed meeting of the heads of the Commonwealth countries is to go ahead and that our proposal that Jamaica be the locale for the meeting has been accepted.”
“I thought that Bermuda was our first choice?” The Marquess of Linlithgow sounded surprised.
“It was, Your Excellency. It was pointed out that Bermuda posed certain security risks should the Germans get wind of the meeting, as they undoubtedly will. A well-timed commando raid and our enterprise would end with us all inside a German prison. Jamaica is a much more secure and inviting location and has better meeting facilities anyway. We amended our proposal to Jamaica and it was enthusiastically accepted. Britain will be represented by Mr. Churchill, of course. The United States will be attending as observers.”
“Is that necessary?” Leon Arnold Fitzgerald sounded distasteful. Of the current members of the Cabinet, he was the one closest to Sir Richard Cardew in outlook. So much so that Sir Eric Haohoa was keeping him discretely watched.
“Indeed it is. It is, after all, the disposal of British equipment produced in America and currently held under embargo there that will be the subject of much discussion. We cannot ignore the fact that those discussions will be meaningless without American agreement. There are other issues that we must raise with them as well. The American government has intimated that it can make funds available to us on very reasonable terms, provided they receive certain assurances about our future position.”
“That means staying in the war, I presume.” Nehru was beginning to calm down.
“Of course it does. The Americans will fight Germany to the lives of the last Commonwealth soldier.” Fitzgerald spoke with scorn dripping from every syllable. Sir Martyn was disturbed to note how much agreement there was with that sentiment.
“They may not get that chance. I hope nobody believes that this war will be ended quickly or will pass anybody by?” Lord Linlithgow had a note of reproof when he spoke and it made its mark. Several of those who had partially agreed with Fitzgerald looked shamefaced about it.
“Pandit, I would like you to lead our delegation to the Jamaica conference. I have far too many commitments here to be able to go there myself, and, I believe, your presence there would highlight the new road down which we hope to take India.”
Nehru’s agitation from the railway issue evaporated as the realization he would be representing India at a Commonwealth conference. What that meant in the broad perspective of things sank in. In a very real sense, it was a partial fulfillment of a life’s work. Watching him, Sir Martyn decided that Pandit Nehru had a lot to learn about what went on at international conferences.
“Have you seen nothin’ down there?”
The Sunderland was cruising about a thousand feet up and maintaining barely a hundred knots. Experience over the Atlantic in the first phase of the war had taught crews that this was the optimum combination of speed and altitude when searching for U-boats. Low altitude to improve the chance of eye-balling a submerged submarine and reduce the chance of being seen by a surfaced one; low speed to stretch fuel reserves out to the maximum possible. Guy Alleyne knew his job very well indeed.
“Nothin’ yet.” An Italian submarine had attacked the New Zealand cruiser Leander. The torpedoes had missed their target. Radio intercepts picked up a message from the submarine Galileo Ferraris claiming to have torpedoed a battleship. That had caused some mirth back in Aden from those who hadn’t tried to work out the chaos of a naval action. The crew of Freddie had; they knew the problems of identifying a target and determining how much, if any, damage they had done.