Fire and Steam (15 page)

The impact of the goods business on the railways was no less an important factor in changing economic patterns and stimulating growth. The opportunities created for new freight flows invariably disrupted traditional markets, creating new opportunities and destroying long-established businesses. A Cheshire farmer was reported as no longer producing cheese because he could supply the Liverpool market with fresh milk, arriving, at the end of a forty-three-mile journey, at 8.30 in the morning. Wet fish could be delivered fresh in Midlands towns like Birmingham or Derby, which enabled fish and chip shops to start offering their wares throughout the country, where previously the dish had been confined to seaside towns. In Darlington,
now connected with the line to London, a new trade had been created. According to the
Great Northern Advertiser
,
¹³
‘vast numbers of sheep have been slaughtered by the Darlington butchers and have been sent
per
railway to London'. The local ‘butter wives', too, were gratified to find that a London dealer had come up to buy 2,000 pounds (900 kg) of their produce, instantly pushing up the price by tuppence per pound. The railway was also a far better way for farmers to take their cattle to market than driving them along roads, which took days, resulting in serious weight loss. A Norfolk farmer reported that as soon as the Eastern Counties railway was opened, he sent his cattle to Smithfield on the train, a journey that took twelve hours rather than a fortnight during which they lost three guineas (63 shillings) in value.

Already by the early 1840s, the advantages of having a rail connection were widely understood and the arrival of the railway was generally seen as beneficial to local people. On the opening of the North Midland railway in 1840, which brought York within easy reach of the capital, the
Sheffield and Rotherham Independent
with an eye to Roses rivalry commented: ‘The completion of this vast undertaking which has at last made Yorkshire a sharer in the great advantage of railway communication that Lancashire has for some years enjoyed is no ordinary event. It opens to a million and a half Yorkshiremen a mode of communication with the Midland Counties and the metropolis, such as twenty years ago would have been ridiculed as a Utopian chimera.'
¹⁴

Yet many people and businesses did lose out. Take the village of Hounslow, a dozen miles from the centre of London and a major staging post where 2,000 horses used to be kept in the various inns. By 1842, a local paper reported that in the ‘formerly flourishing village of Hounslow . . . so great is the general depreciation of property on account of the transfer of traffic to the railway that at one of the chief inns there was an inscription “new milk and cream sold here”'.
¹⁵
The cattle dealers in Southall in Middlesex, barely six miles from London, complained that as more stock could be brought in from further afield by the railway, their prices had been forced down. Maidenhead, further west, had also suffered greatly with the main hostelry, The Bear, once a flourishing inn, closing its doors. In Reading, the Michaelmas Fair
traders had suffered: ‘When the dairymen had their cheese brought up the old road, they used to load the wagons home with brooms; but now, since the mode of conveyance is changed to the railway, it does not answer the purpose of the dealers to pay the carriage for them.'
¹⁶

There was even the Victorian equivalent of the blight in high streets caused today by out-of-town supermarkets. In Ashton-under-Lyne, Stockport and other nearby towns, shopkeepers were complaining that their customers were going into Manchester to shop. The actual construction of the railways also resulted in much protest from the local residents it displaced. Bringing a railway into town was rather like a slum clearance scheme – ‘creative destruction'
¹⁷
– as it was inevitably routed through the poorer areas; powerful landowners, and even affluent tenants such as James Watt, were able to ensure that railways did not cross their land.

Although the rail service was becoming well used, by the mid-1840s there was still nothing like a countrywide network, and the capacity of the existing railways was severely constrained with, for example, all traffic for the major towns north of London having to run on a single pair of tracks all the way to Rugby. Given the obvious need for more railways and the rapid impact of the first wave of construction, the lull in building new lines was inevitably short-lived. However, the extent of the second wave of expansion was breathtaking and surprising. The expression ‘calm before the storm' does not do justice to the events of the middle of the decade when Parliament was inundated with bills and the whole economy of the country was, it seemed, geared towards constructing more and more railways. While there were previous and subsequent periods of booms in railway promotion, the years 1845–7 are rightly known as the period of the ‘railway mania' because of their widespread impact and lasting effect.

FIVE

RAILWAYS EVERYWHERE

Like all booms, the railway mania started imperceptibly. By the mid-1840s, investing in the railways had become an attractive proposition once again and schemes for new lines began to be drawn up in every region of the country. The financial climate had changed and there was optimism in the air with an upturn in the economic cycle. Interest rates had plummeted, encouraging people to look for a better rate of return on their savings than from government securities, and by the spring of 1844 there was more money available for railway investment than ever before.
¹
Moreover, the value of existing railway shares had begun to grow and naturally this encouraged promoters to bring forward new schemes which would appeal to the large pool of potential investors eager to make capital gains.

However, no one quite expected the stampede to form new railway companies that was to ensue. As the supply of finance appeared almost endless, with more and more people eager to jump on the ‘get rich quick' bandwagon, unscrupulous fraudsters entered the fray, pushing schemes whose only aim was to deprive investors of their savings. For example, investors were being sought for schemes whose sole purpose was to pay the bills on previous projects drawn up by the same promoters. While such utterly fraudulent schemes were few, there were many more in which investors lost their money because the economics were as shaky as their prospectuses were woolly. There were, quite literally, schemes for new railways everywhere and promoters were knocking on the doors of Parliament on a daily basis to put forward
their plans. The rush to promote new railways had begun relatively slowly with 800 miles authorized in 1844, representing a third of the existing railway's mileage. To put this in perspective, barely fifty miles had been authorized during the six lean years from 1838 to 1843.

The real rush started in the autumn of 1844, the deadline for tabling Bills to be considered in the next parliamentary session. Whereas forty-eight Acts had been passed in 1844, 240 bills were presented to Parliament in 1845 (of which precisely half were sanctioned), representing 2,820 miles, a doubling of the existing network. Had all these railways been built, the capital required – about £100m – represented more than one and a half times the country's gross national product of £59m for that year. There is no equivalent in modern times of such a major investment scheme accounting for so much of a country's economic activity, but perhaps the closest comparison would be the allocation of resources to Britain's defence expenditure during the Second World War.

With a further 3,350 miles authorized the following year, the peak of the boom was reached and the number declined over the next two years until the mania was brought to an abrupt halt not only by its own unsustainability but also as a result of a downturn in the economic climate. Overall, the total mileage authorized for the four years of the railway mania from 1844 to 1847 reached 9,500,
²
which would have needed £250m of capital to build. It represents nearly 90 per cent of today's total route mileage on the UK rail network of 11,000 miles. Historians tend to view much of this ‘mania' in negative terms, pointing out that over a third of the mileage authorized in those four years was not built. However, the more pertinent fact is that two thirds of these railways were actually completed within a few years and, indeed, several of the failed schemes were revived and built as a result of the subsequent smaller booms of 1852–3 and the early 1860s. Furthermore, the vast majority of the railways constructed in these years survive today as the backbone of the network.

The process of building this network was haphazard and chaotic, although for a brief period it looked as if Parliament would adopt a more strategic and consistent approach to the process of passing or rejecting railway bills than simply considering each one in isolation. The sheer volume of railway business had begun to overwhelm any other
parliamentary business and to address this problem, Gladstone's 1844 Act made provision for an advisory board, under the aegis of the Board of Trade, to consider the merits of railway plans before they reached Parliament. The chairman of the five-strong board was Lord Dalhousie, a skilled administrator who, as India's Governor General, would later be responsible for building the sub-continent's railways through a combination of state planning and private enterprise. Still, the board had only an advisory role because Gladstone had been too fearful of alienating the powerful and seemingly ubiquitous railway interests to insist on stronger regulation. Despite that handicap, the board succeeded in setting out some clear strategies, which led to a modicum of rationality in the railway system and Parliament concurred with the vast majority of its decisions.

The board's remit included rejecting schemes whose primary purpose was to block other more legitimate and viable railways as well as those which seemed to offer little benefit to the public. Moreover, the committee was supposed to discourage unnecessary competition, which was a radical departure from past practice as Parliament had generally supported rival railways battling against each other. Indeed, the laissez-faire ethic of encouraging competition in order to reduce the monopolistic power of the railways prevailed throughout the Victorian era and the board's more sensible approach to the issue of competition was a short-lived outbreak of common sense.

The board's attempt to reconcile the question of whether competition or coordination should be its guiding principle inevitably resulted in contradictions and tortuous language in its reports. For example, while the members argued that existing companies which put forward schemes for contiguous additions to their network should not necessarily be favoured, the board pointed out that incumbents would have a better chance of seeing their scheme through to completion than newer, possibly less financially viable, rivals and therefore should be favoured.

Dalhousie's team delivered measured and sensible decisions on groups of schemes, examining, on a geographical basis, about half the Bills presented to Parliament in the 1844–5 session. Then railway interests, angry at the board's rejection of various schemes, succeeded in forcing its abolition in July 1845. It was ‘the one and only successful attempt to
establish a body whose function it would be to guide the development of the country's railway system on national lines'.
³
Its abolition was regrettably short-sighted because ‘the succeeding years brought only uncertainty, waves of promotion being followed by periods of despondency and an absence of vision on the part of the legislature as to the general lines of development of the railway system'.
⁴

London was to be the one exception where a laissez-faire approach could not be allowed to prevail since there were vested interests in the City even more powerful than the railway promoters. With proposals for nineteen urban lines and termini being lodged in Parliament,
⁵
Lord Dalhousie's considerable administrative talents were transferred to chairing the Royal Commission on Metropolis Railway Termini, which reported in 1846 and essentially created a rectangle around the centre of London through which railway lines were to be banned because of the potential damage to existing buildings. The report's findings put paid to the dream of a unique central London station, spouting out lines in all directions in the tradition of a German
Hauptbahnhof
⁶
,
and instead led to the construction of the Metropolitan and District lines of the Underground system along which nearly all London termini are situated.
⁷

Elsewhere, the vagaries of the parliamentary bill process prevailed and a huge back-office industry emerged merely to service the legal and administrative requirements of the massive influx of promoters seeking to push their schemes through Parliament. There were not only the obvious beneficiaries such as lawyers, parliamentary agents and surveyors, some of whom were reportedly earning up to ‘fifteen guineas per day',
⁸
but a host of others who serviced the needs of this railway Klondike. For example, there was a shortage of competent printers to produce the highly decorative engraved share certificates, without which no self-regarding promoter would ever attempt to persuade investors to part with their cash. Therefore engravers were commissioned from across the country, and even from France and Germany, to draw up the elaborate certificates that still adorn thousands of studies (and loos!) today.

Another industry that thrived on the back of the boom, irrespective of whether the schemes came to fruition or not, was the press. At the
height of the mania, the leading London papers were earning £12,000–£14,000 per week from the advertisements of railway companies.
⁹
A specialist press devoted to the railways had also sprung up. By the autumn of 1845, there were no fewer than fifteen weekly railway journals, and even a daily, the
Iron Times
.
¹⁰
The most prominent were the
Railway Times,
which claimed a circulation of 27,000 copies in 1842, and the
Railway and Commercial Journal
whose editor-owner, John Herapath, was so forthright in his views that it was known simply as
Herapath's Railway Journal.
The breadth of news on the progress of bills, technical developments and descriptions of schemes was impressive even if, at times, the reliability of the information could be uncertain as owners like Herapath were not averse to speculating in shares themselves.