Railways

25.5.3: Railways

The development of the railways, starting in the 1830s, transformed the economy and society by creating powerful railway companies, attracting massive investments, advancing industries, transforming human migration patterns, and even changing people’s daily diet.

Learning Objective

Describe how railways spread and became common across the globe

Key Points

  • The opening of the Liverpool and Manchester Railway (L&MR) in 1830, the first to rely exclusively on steam power, revolutionized transportation and paved the way for the development of railways that would soon take over the world. A number of lines were approved in the Leeds area the same year. An unexpected enthusiasm for passenger travel resulted in opening the London and Birmingham Railway (L&BR) and the Grand Junction, linking the existing L&MR and the new L&BR in 1837.
  • A new railway always needed an Act of Parliament, which typically cost over £200,000 to obtain, but opposition could effectively prevent its construction. The canal companies, unable or unwilling to upgrade their facilities to compete with railways, used political power to try to stop them. The railways responded by purchasing about a fourth of the canal system, in part to get the right of way and in part to buy off critics. Once an Act was obtained, there was little government regulation, as laissez faire and private ownership had become accepted practices.
  • The railways largely had exclusive territory, but given the compact size of Britain, this meant that two or more competing lines could connect major cities. Between the-mid 1830s and the mid-1940s, Parliament authorized 8,000 miles of lines at a projected cost of £200 million. The incredible profitability of the railways attracted many investors together with massive financial speculation known as the Railway Mania.
  • The financial success of the early railways was phenomenal, as they had no real competition. Less than 20 years after the Liverpool line opened, it was possible to travel from London to Scotland by train in a small fraction of the former time by road. Towards the end of the 19th century, competition became so fierce between companies on the east and west coast routes to Scotland that it led to what the press called the Race to the North.
  • The railways changed British society in numerous and complex ways, including a substantial impact in many spheres of economic activity. The building of railways and locomotives provided a significant stimulus to the coal-mining, iron-production, engineering, and construction industries. The railways also helped to reduce transaction costs, which in turn lowered the costs of goods, bringing positive changes to people’s diet. The railways were also a significant force for the changing patterns of human mobility.
  • The Government began to pay attention to safety matters with the 1840 Act for Regulating Railways, which empowered the Board of Trade to appoint railway inspectors. The Railway Inspectorate was established in 1840 to inquire into the causes of accidents and recommend ways of avoiding them. In 1844, minimum standards that would require railway companies to offer services to the poorer passengers on each railway roue at least once a day were introduced.

Key Terms

Liverpool and Manchester Railway
A railway that opened in 1830 between the Lancashire towns of Liverpool and Manchester in the United Kingdom. It was the first railway to rely exclusively on steam power, with no horse-drawn traffic permitted at any time; the first to be entirely double-track throughout its length; the first to have a signaling system; the first to be fully timetabled; the first to be powered entirely by its own motive power; and the first to carry mail.
Parliamentary carriages
Passenger services required by an Act of Parliament passed in 1844 to allow inexpensive and basic railway travel for less affluent passengers. The legislation required that at least one such service per day be run on every railway route in the United Kingdom.
Race to the North
Name given by the press to the phenomenon that occurred during two summers of the late 19th century, when British passenger trains belonging to different companies would literally race each other from London to Scotland over the two principal rail trunk routes connecting the English capital city to Scotland: the West Coast Main Line and the East Coast Main Line.
Railway Mania
Speculative frenzy in Britain in the 1840s caused by the phenomenal profitability of the early railways.
Railway Clearing House
An organization set up in 1842 to manage the allocation of revenue collected by pre-grouping railway companies of fares and charges paid for passengers and goods travelling over the lines of other companies.

 

 

Railways: The Revolution of Transportation

The Liverpool and Manchester Railway (L&MR), opened in 1830 between the Lancashire towns of Liverpool and Manchester, was not the first railway, but it was the first one to rely exclusively on steam power, with no horse-drawn traffic permitted at any time; the first to be entirely double track throughout its length; the first to have a signaling system; the first to be fully timetabled; the first to be powered entirely by its own motive power; and the first to carry mail. As such, it revolutionized transportation and paved the way for the phenomenal development of railways that would soon take over the world.

As Manchester had grown on cotton spinning, Leeds had a growing trade in weaving. The Pennines restricted canal development, so the railway provided a realistic alternative, especially with the growth in coal usage from the mines in the North East and Yorkshire. A number of lines were approved in the area, such as the Leeds and Selby Railway in 1830, which linked the former to the port of Hull via the River Ouse.

While the L&MR had not ousted the Lancashire canal system from the transport of goods, there was an unexpected enthusiasm for passenger travel. The financial success of the railway was beyond all expectations. Soon companies in London and Birmingham planned to build lines linking these cities together and with Liverpool and Manchester via the L&MR. These two lines were the London and Birmingham (L&BR), designed by Robert Stephenson, and the Grand Junction, engineered by Joseph Locke. The Grand Junction was designed to link the existing L&MR and the new L&BR. It opened in July 1837, with the L&BR following a few months later.

Although Acts of Parliament allowed railway companies compulsory purchase of wayleave, some powerful landowners objected to railways being built across their land and raised objections in Parliament to prevent bills from being passed. Some land owners charged excessive amounts, so early lines did not always follow the optimal routes. In addition, steep gradients were avoided as they would require more powerful locomotives.

 

Railway Mania

It was legally required that each line be authorized by a separate Act of Parliament. While there were entrepreneurs with the vision of an intercity network of lines, it was much easier to find investors to back shorter stretches that were clearly defined in purpose, where rapid returns on investment could be predicted. A new railway needed an Act of Parliament, which typically cost over £200,000 to obtain, but opposition could effectively prevent its construction. The canal companies, unable or unwilling to upgrade their facilities to compete with railways, used political power to try to stop them. The railways responded by purchasing about a fourth of the canal system, in part to get the right of way and in part to buy off critics. Once an Act was obtained, there was little government regulation, as laissez faire and private ownership had become accepted practices. The railways largely had exclusive territory, but given the compact size of Britain, this meant that two or more competing lines could connect major cities. Between the-mid 1830s and the mid-1940s, the period of the railway boom, Parliament authorized 8,000 miles of lines at a projected cost of £200 million, which was about the same value as the country’s annual gross domestic product (GDP) at that time.

George Hudson became the most important railway promoter of his time. Called the “railway king” of Britain, Hudson amalgamated numerous short lines and established the Railway Clearing House in 1842, an organization that provided uniform paperwork and standardized methods for apportioning fares while transferring passengers and freight between lines and loaning out freight cars. Hudson’s ability to design complex company and line amalgamations helped bring about the beginnings of a more modern railway network. In 1849, he exercised effective control over nearly 30% of the rail track operating in Britain, most of it owned by four railway groups: the Eastern Counties Railway, the Midland, the York, Newcastle and Berwick, and the York and North Midland. Hudson remains an important figure in railway history also because of a series of scandalous revelations that forced him out of office. The financial reporting malpractices of the Eastern Counties Railway while Hudson was its chairman eventually led to the collapse of his system.

A railway junction diagram. When coaches or wagons owned by a different company were used, that company would be entitled to a proportion of the fare or fee. If the commencement and terminus of the journey were on different railways, a more complicated situation arose. If the two companies involved did not provide through ticketing, the passenger or goods needed to be re-booked at a junction station. If through booking was provided, the receipts collected by the first company needed to be divided between them, usually on a mileage basis. The Railway Clearing House was founded as a means by which these receipts could be apportioned fairly.

All the railways were promoted by commercial interests. As those opened by the year 1836 were paying good dividends, it prompted financiers to invest and by 1845 over 1,000 projected schemes had been put forward. This led to a speculative frenzy, following a common pattern: as the price of railway shares increased, more and more money was poured in by speculators, until the inevitable collapse in price. The Railway Mania, as it was called, reached its zenith in 1846, when no fewer than 272 Acts of Parliament setting up new railway companies were passed. Unlike most stock market bubbles, there was a net tangible result from all the investment in the form of a vast expansion of the British railway system, although perhaps at an inflated cost. When the government stepped in and announced closure for depositing schemes, the Railway Mania was brought to an end.

The legacy of Railway Mania can still be seen today, with duplication of some routes and cities possessing several stations on the same or different lines, sometimes with no direct connection between them (however, a significant amount of this duplication was removed by the Beeching Axe in the 1960s). The best example of this is London, which has no fewer than twelve main line terminal stations, serving its dense and complex suburban network. It is basically the result of the many railway companies during the Mania that were competing to run their routes in the capital.

 

Economic and Social Impact

The railway directors often had important political and social connections and used them to their companies’ advantages. Furthermore, landed aristocrats with established connections in London were especially welcome on the corporate boards. The aristocrats saw railway directorships as a socially acceptable form of contact with the world of commerce and industry. They leveraged the business acumen and connections gained through railways to join corporate boardrooms in other industries.

The financial success of the early railways was phenomenal as they had no real competition. The roads were still very slow and in poor condition. Prices of fuel and food fell in cities connected to railways in accordance with the fall in the cost of transport. The layout of lines with gentle gradients and curves, originating from the need to help the relatively weak engines and brakes, was a boon when speeds increased, avoiding for the most part the need to re-survey the course of a line. Less than 20 years after the Liverpool line opened, it was possible to travel from London to Scotland by train in a small fraction of the former time by road. Towards the end of the 19th century, competition became so fierce between companies on the east and west coast routes to Scotland that it led to what the press called the Race to the North. In two summers of the late 19th century, passenger trains belonging to different companies would literally race each other from London to Scotland over the two principal rail trunk routes connecting the English capital city to Scotland. The races were never official and publicly the companies denied that what happened was racing at all. Results were not announced officially and the outcomes have since been hotly debated.

The railways changed British society in numerous and complex ways. Although recent attempts to measure the economic significance of the railways have suggested that their overall contribution to the growth of GDP was more modest than an earlier generation of historians argued, it is nonetheless clear that the railways had a sizable impact in many spheres of economic activity. The building of railways and locomotives, for example, called for large quantities of heavy materials and thus provided significant stimulus to the coal-mining, iron-production, engineering, and construction industries. The railways also helped reduce transaction costs, which in turn lowered the costs of goods. The distribution and sale of perishable goods such as meat, milk, fish, and vegetables was transformed, giving rise not only to cheaper produce in the stores but also to far greater variety in people’s diets.

The railways were also a significant force for the changing patterns of human mobility. Rail transport had originally been conceived as a way of moving coal and industrial goods but the railway operators quickly realized the potential for market for railway travel, leading to an extremely rapid expansion in passenger services. The number of railway passengers tripled in just eight years between 1842 and 1850. Traffic volumes roughly doubled in the 1850s and then doubled again in the 1860s. In the words of historian Derek Aldcroft, “In terms of mobility and choice [the railways] added a new dimension to everyday life.”

 

Government Involvement

While it had been necessary to obtain an Act of Parliament to build a new railway, the government initially took a laissez faire approach to their construction and operation. The state began to pay attention to safety matters with the 1840 Act for Regulating Railways, which empowered the Board of Trade to appoint railway inspectors. The Railway Inspectorate was established in 1840 to inquire into the causes of accidents and recommend ways of avoiding them. Colonel Frederic Smith conducted the first investigation into five deaths caused by a large casting falling from a moving train in 1840 (Howden rail crash). He also conducted an inquiry into the derailment on the GWR when a mixed goods and passenger train derailed on Christmas Eve, 1841. As early as 1844 a bill had been put before Parliament suggesting the state purchase the railways, but it was not adopted. It did, however, lead to the introduction of minimum standards that would require railway companies to offer services available to the poorer passengers on each railway roue at least once a day (so-called Parliamentary carriages or trains).

Great Western Railway open passenger car

In the earliest days of passenger railways in Britain, the poor were encouraged to travel to find employment in the growing industrial centers, but trains were generally unaffordable to them except in the most basic of open wagons, in many cases attached to goods trains. The Railway Regulation Act, which took effect in 1844, compelled “the provision of at least one train a day each way at a speed of not less than 12 miles an hour including stops, which were to be made at all stations, and of carriages protected from the weather and provided with seats; for all which luxuries not more than a penny a mile might be charged.”

The commercial interests of the early railway industry were often of a local nature and there was never a nationwide plan to develop a logical network of railways. Some railways, however, began to grow faster than others, often taking over smaller lines to expand their own. The L&MR success led to the idea of linking Liverpool to London, and from that the seeds of the London and North Western Railway (L&NWR), an amalgamation of four hitherto separate enterprises, including the L&MR, were sown.

Attributions