GIPE-PUNE-OIIOI2 - DSpace@GIPE

THE RAILWAY INDUSTRY AND COMMERCE OF _NOlA 181
It was not found financially convenient any longer
to continue the policy of state ownership and manage~
ment. But in the interest of economy the Government
began to buy the railways of the old guarantee system
(1859~70), according as the contracts lapsed. The
management, however, was leased to the companies in
certain instances but in others was directly taken over by
itself. Some 4,250 miles were -opened for traffic during
this period. (Total mileage open at 1880: 8,996).
The third period (1880~ I MO) abolished the state
ownership principle and went back to the old guarantee
system. Several private companies were invited to con~
slruct as well as manage railways. The terms were a bit
easier for the Government than under the first system.
And as on that occasion during this epoch also the Govern~
ment reserved to itself the right to buy the companies out
at the end of the contract period. SOQ.1e 4,000 miies were
given away under this system. n"otal mileage open at
1890: 16,404).
By 1890 the foundations of the trunk lines were
already laid and the railway developments had
become important enough to call for the enact~
ment of the Indian Railways Act. Then began
the fourth period in railway policy which may be
said to have continued f~r a whole generation. This has
special reference to feeder lines and with regard to this
the Government introduced a new system of financing.
Neither was the nationalizatiCin principle revived nor the
twi.ce~tried guarantee system' continued. Private companies
were by all means encouraged to undertake the
construction and management. The system was introduced
of offering a rebate to the 'Companies on the gross