although most of the railways were managed
railways, were under the direct management and control of the government,
the remaining being worked by companies.
In 1900 the railways showed a small profit for the first time. In
succeeding years the net receipts grew rapidly; in 1918-19 railway earnings
totalled £ 10 million. In 1924-25 railway finances were separated from the
general budget for the first time.
In 1901, Thomas Robertson was appointed special commissioner to
examine the entire system of the organisation and working of the Indian
railways. He proposed (1903) drastic changes and recommended the
constitution of a Railway Board with a chairman, two members and a
secretary. The Board was formally set up in March 1905 and made
subordinate to the government.
In 1907, the Secretary of State, John Morley, appointed a committee
under Sir James Mackay to examine the financial and administrative structure
of the railways. It found out that the objective of the Railway Board, viz. an
expeditious and speedy disposal of business, was not properly realised; that
there was friction between the Board and the government; that defects existed
in the constitution of the Board itself.
The Railway Board, as constituted in 1905 and modified in 1909, and
again in 1914, did not work satisfactorily. Initially, its chairman and members
were men with considerable knowledge and railway experience. This was
modified in 1914, when a member with financial and commercial
qualifications was appointed. The position was reversed in 1920, when it was
decided that all the three members should possess experience of work in the
railways. After 1921, when the government assumed direct responsibility for
the state railways, it delegated all its powers to the Railway Board.
In 1920 the Secretary of State announced the appointment of the East
India Railways Committee under the chairmanship of Sir William Acworth to
go into the whole question of railway policy, finances and administration.
Also known as the Acworth Committee, it consisted of 10 members, among
whom 3 were Indians–V. S. Srinivas Sastri (a member of the Council of
States), Sir Rajendranath Mookerjee (an industrialist of Calcutta) and
Purshottamdass Thakurdas (a Bombay industrial magnate). The committee
ruled favour of state management and its recommendations were to form the
basis of much of the later development of the Indian railways.