Pages

Tuesday 22 April 2008

Railways and society

The impact of railways on Victorian society was immense[1]. Railways provided the speediest means of transport during the nineteenth century. At first some railways charged the first-class passenger more than he would have had to pay making the same journey inside a coach, and a second-class passenger more than he would have been charged for an outside seat. It was not long, however, before railways began to give fares a competitive edge over the charges of coach travel. It was a policy that resulted in a rapid increase in the volume of passenger traffic.

By the early 1840s half fares for under 12s were generally widely available making family rail travel more widespread and still further augmented the volume of passenger travel.  Initially the poor were not encouraged to travel unless it was in search of work or to fulfil urgent family responsibilities. Railway companies made no provision for that type of traveller who had gone by carrier's wagon rather than by the outside of a coach because it was cheaper. Robert Stephenson told the Select Committee on Railways in July 1839 that there was 'a class of people who had not yet had the advantage from the railways which they ought, that is the labouring classes.'  The practice of providing third-class carriages on trains spread gradually. It was not, however, until the Railway Act 1844 with its clauses making the provision of third-class accommodation on at least one train a day in each direction obligatory, that the working class could count on penny-a-mile travel under minimum conditions of comfort. Between 1849 and 1870 the number of third-class passengers increased nearly six fold whereas the increase in other areas was only fourfold.  The boost to third-class travel was further increased after 1874 when the Midland Railway abolished second class and greatly improved the comfort for third-class passengers. Other companies followed suit and by 1890 the difference in the standards of accommodation had been substantially narrowed.

Freight traffic did not increase as rapidly as passenger travel partly because of the relative cheapness of inland navigation. One problem the early railway companies faced was through-traffic: getting goods from one part of the country to another through different companies' lines. Although a Railway Clearing House was established in January 1842 it was five years before it began to operate effectively and there was a substantial reduction in the cost of freight. It is important to identify those areas where reduction in the cost of freight had social as well as economic results:

  1. In the early 1850s the volume of freight carried by railway first exceeded that carried by canals.
  2. The movement of coal was the bread and butter of British railways, the tonnage carried always well over half the total of freight traffic. In 1865, for example, 50 million tons of coal was carried compared to 13 million tons of other minerals [especially iron] and nearly 32 million tons of other merchandise. Up to 1914 the volume of mineral traffic increased at a faster rate than traffic in other goods. Despite this, the mineral trade was less profitable than the other type of freight, earning only 45 per cent of freight revenue in 1913.  The railways made available, at a lower cost, the fuel that was the lifeblood of the basic industries.  On the other hand the presence of about 1,400,000 mostly small wagons, many of which were used to carry coal, cluttered up the tracks and led to congestion on the railway network.  Railways' contribution to the prosperity of coal mining came through their cheapening of delivery costs and the consequent vast extension of the use of coal in manufactures and in domestic heating.
  3. The growth of the iron industry was sustained by orders of rails, locomotives and rolling stock..
  4. The demand for locomotives and rolling stock was so great that it accounted for at least 20 per cent of the engineering industry's output in the later 1840s. Railways spread the engineering industry into areas that were previously regarded as agricultural: for example, the South Eastern Railway established its locomotive and carriage works at Ashford in Kent in 1845 and the Great Western Railway decided to set up a similar establishment at Swindon five years earlier. Though railway engineering made significant early achievements, its later progress was unimpressive. The main reasons for this were.  The dominance of the chief mechanical engineer over development policy in many of the larger railway companies. These engineers were highly individualist and liked to be known for the distinctive features on the locomotives they designed. This led to little standardisation of design, with consequently to little attempt to maximise economy of operation.  Considerations of engineering excellence took precedence over better cost accounting and the need for more adequate statistics on the operating efficiency of freight trains.  This did not mean that there were no improvements in the efficiency of the locomotive after 1850.  The replacement of wrought iron with steel rails meant that weightier and more powerful locomotives could be used. The substitution of coal for coke as fuel after 1870 made feasible higher steam pressure, greater speeds and heavier trains. Some lines were electrified before 1914 but the mileage was very small: 314 out of 23,911 route miles of track.
  5. Railway costs meant that manufacturing centres were able to undercut the largely hand-based local centres of production. The economic and social life of towns and villages became less diversified. A comparison of local directories demonstrates this very clearly. By 1900 although the names of trades had sometimes survived, the character of the business that went on behind the shop front had changed radically. Tradesmen had, in many cases, ceased to be craftsmen. They became dealers or shopkeepers, selling goods made in some remote manufacturing centre elsewhere in Britain or even in America or Germany.
  6. One effect of the railways was the elimination of local differences in farm prices. Not only could farmers bring in fertilisers, they could send their produce to market more easily and cheaply. This had important consequences for people's diet. Take, for example, the transformation of the system of marketing livestock.  Traditionally meat was supplied to London and other large centres of population 'on the hoof'. Animals were driven from the farms to the final fattening grounds near the main markets. In early 1830 34 drovers guided 182,000 sheep a year from south Lincolnshire to London while a further 52 men drive 26,520 oxen on the same route. It was an expensive and time-consuming operation.  When the rail link from Cambridge to London was opened, the greater part of the journey could be completed in less than a day cutting costs considerably.  The gradual disappearance of the long-distance droving industry occurred in Scotland in the 1850s and 1860s and led to the emergence of new markets at railheads like Lairg, Lockerbie and Lanark. The fatstock farmer could now expect a better financial return because less of his product was being wasted in the process of marketing and the customer could get a cheaper and fresher product. A similar process can be seen in the transformation of Britain's fisheries.
  7. Railway investment broadened the social spread of those involved in risk capital. Before 1830 the investment habit was largely confined to the members of the mercantile and landed interests whose opportunities for obtaining a secure return on their savings had been strictly limited. Railways demanded a quite unprecedented volume of capital and in order to obtain it companies were obliged to lower the denomination of shares allowing people from the lower middle and even upper working class to invest. The result was a permanent change in investment trends: before 1830 little over one twentieth of national income was invested annually, by 1850 the proportion was one tenth -- more people were investing more money.

Railways were regarded as symbolic of the progressive spirit. Sponsors of railway companies were often also supporters of parliamentary reform, municipal reform and free trade. In 1907 the author of a survey of the Essex economy wrote 'It was not easy to lay down rails in the soft Essex soils and a good deal of the country is still untouched by railroads and therefore quietly unprogressive in spirit.'  It is certainly true that the arrival of the railway was often accompanied by the introduction of other changes. The railway first came to the Isle of Wight in 1864, after sustained opposition from local landowners for nearly twenty years. The editor of the local newspaper grumbled that many of the visitors bought by the railway had great difficulty in finding the beauty spots and that not only improved signposting but also better roads and gas lighting were urgently needed. Two months later he announced the formation of a gas company, 'the prospects of success being so very encouraging'. The 'progressive spirit' can be seen in other respects:

  1. The development of the railway system resulted in the general acceptance of Greenwich time as a standard. Before 1840 different parts of the country operated at different times. The Great Western timetable of 30 July 1841 said that 'London time is about four minutes earlier than Reading time, seven and a half minutes before Cirencester and 14 minutes before Bridgwater.'  The disadvantages of not having a standard time applicable to all parts of the United Kingdom were increasingly obvious. The result was the gradual standardisation of time during the 1850s.
  2. There is no denying the influence of railways in starting that standardisation of language and speech that was carried forward more speedily by the influence of radio and television. The railways of Wales, for example, were powerful agencies in the decline of Welsh speaking in the principality.
  3. The creation of a national railway system was one of the preconditions -- together with technological changes in printing, the growth in literacy levels and the abolition of stamp duty in newspapers in 1836 and the 1850s -- for the establishment of mass circulation daily newspapers. In 1830 only 41,412 daily papers left London through the postal system. Railways extended the radius of circulation and newspapers could be delivered to all but the remotest parts of the country within a day of publication. In 1866 the railway companies agreed that the standard charge for newspapers should be half the ordinary parcel rate. As early as 1848 potential demand was so great that the firm of W.H.Smith & Son chartered six special trains to get newspapers through to Glasgow within ten hours of publication in London.

Railways contributed to the increasing secularisation of British society through the development of leisure and the development of tourism. The holiday began as a holy day. At the Bank of England there were 44 such holidays in 1808 though this had been reduced to four by 1834. Elsewhere, however, there was a new movement in the opposite direction: in many factories holidays were declared at the will of the owners as a device for saving wages when business was slack. Every important form of leisure activity that existed in the Victorian period and which some suppose to have been introduced by the railways had their origins in the eighteenth or early nineteenth century. Holidays were not something created by railways for the few, but arguably were for the masses.  Railways were quick to recognise the opportunities presented by train excursions. One way of filling empty seats in passenger coaches and so offset high overhead costs was to provide excursion tickets at lower prices than the standard tickets: in 1846 for example the Bodmin & Wadebridge company ran a cheap train for those wishing to see a public execution. The first trunk line to show a positive attitude to the promotion of leisure traffic was the London & Brighton and in 1844 it became the chief pioneer of excursion trains in southern England.

It was above all the Great Exhibition of 1851 that provided the greatest opportunity for railways to promote excursion travel. Without the railways the Exhibition could not have matched up to the imaginative ambitions of those who planned it and, in the end, those ambitions were surpassed. More than forty years later Thomas Hardy conjured up an excursion train: 'an absolutely new departure in the history of travel runs to the Exhibition from Dorcester....'  When the Exhibition closed, railways stood higher in general estimation than they had done before. Their system was now revealed as a working unit, able to concentrate attention and energy from all the most populous parts of the island at once on a single object in London. The running of these trains quickly came to be accepted by all the railway companies having substantial passenger business. There were other special events when their services were again in demand: the Manchester Art Treasures Exhibition in 1857, the International Exhibition in London in 1862 and big exhibitions in Glasgow in 1888 and 1901. The seaside traffic grew; excursions carried race-goers into the suburbs of the great towns balanced later by those bringing passengers into towns to see football and cricket matches. It is difficult to estimate the quantity of the excursion traffic as only the Royal Commission on Railways 1865-7 dealt with the issue, and then only cursorily.

When excursion trains first appeared, it was common practice to run them on Sundays. Sunday observance affected the provision of railway services from the start and there was a conflict between the prompting of conscience and the pressing claims for business efficiency. The Sunday timetable, as the system developed in the 1840s and 1850s, came to differ widely from one railway to another but two generalisations can be made.  First, the Post Office was empowered to compel railways to carry mail at any time it appointed; and since it had both to deliver and collect letters on Sundays it insisted on the provision of a good many Sunday mail trains. This was uneconomic for the railway companies and so nearly all mail trains also carried passengers.  Secondly, on all British railways the Sunday service was very much less liberal than that offered on weekdays unlike continental Europe where there was very little difference.

In Scotland there were many lines on which no Sunday trains of any kind ran in the Victorian age: the suburban system in Glasgow, for example, was almost wholly shut down. In England and Wales the policy of providing Sunday trains was often criticised and sometimes strongly opposed. The clergy of the diocese of Winchester complained that their congregations were much reduced in the summer time. In 1846 Francis Close, the Evangelical parson of Cheltenham said, when Sunday trains began to serve the town 'Another page of Godless legislation, another national sin invokes the displeasure of the Almighty.'  His ranting was ignored and the trains continued to run. This heavy-handed approach was not, however, the only approach used. The case against running trains was sometimes stated with considerable restraint. The Sabbatarians treated Sunday as both a day of observance and as a day of rest. However, some secularly minded people argued that what was at issue here was really a battle of classes. The Sabbatarians seemed to them to be denying to the poor what would remained accessible to the rich, who kept their own carriages and could travel as they chose. Ought not the railways, as an instrument of social mobility, be available to all? The Duke of Wellington, hardly a radical thinker, thought they should. Two dreadful accidents, in 1858 and 1861, of excursion trains were seen as a judgement of God on the sin of providing Sunday excursion trains[2].

There were signs by the 1850s of support for increased railway facilities on Sundays but the control by the anti-travel lobby seemed to be growing stronger. In 1856 Parliament turned down attempts to open the chief London museums and galleries on a Sunday afternoon by an eight-to-one majority. In 1861 5.7 per cent of the system was closed on Sundays; by 1871 it was 18.9 per cent. By 1914, about 3700 miles of the system in England and Wales were closed on a Sunday, a little over 22 per cent of the whole. The railways' Sunday business had never been large and was carried out at a substantially higher cost than the weekday business. There were therefore strong arguments for keeping it down.  Railway company needed to relay track and daylight hours were only available on Sundays: most of the conversion of the gauge on the Great Western Railway was carried out at weekends.

The Sabbatarians began to revive at the end of the century. The Anti-Sunday-Travelling Union launched a new periodical, Our Heritage, in 1895 fomenting criticism of all the railways' Sunday services. Protesters soon began to lobby management and disturb shareholders meetings. Their doctrine no longer represented prevalent thinking. The successful body in these years was on the other side: the National Sunday League founded in 1855 to support the Sunday opening of museums and parks. The Sunday service was often very slow. The policy of the various companies was to impose a strict rigidity of their own as far as timetabling was concerned. In part this was because of their anxiety not to offend Sabbatarian susceptibilities, the requirement of carrying mail and the demands of railwaymen for additional Sunday pay.  Railways had begun by offering emancipation: opportunities to travel over substantial distances on Sunday. In doing so it violated the old Protestant Sunday in Britain. Despite opposition the railways' intervention enlarged the choice open to those individual consciences. In this sense they can be seen as progressive.

With the development of the Victorian excursion system can tourism and the family holiday. There are several reasons for the close relationship between tourism and the railways, unlike on the Continent. The smallness of Britain was itself an invitation to provide this kind of service. A quick trip to the coast was an attractive proposition. This combined with a large increase in average wages between 1860 and 1913 of 72 per cent and the increase in paid holidays. Victorian working men had more money to spend and more leisure time in which to spend it than workers in France and Germany. British governments ignored the excursion business because it was the affair of the railway companies, and theirs alone, to determine when and where these trains should run. As a result there was a continually increasing provision of excursions to match public demand.

The railway companies fostered the habit of taking short holidays over the weekend. In doing so it developed a practice that emerged in the late eighteenth century. The London & South Western seems to have been the first railway to encourage such behaviour: in 1842 it offered tickets at reduced fares from London to Southampton and Gosport on Saturday for return either on the same day, or Sunday or Monday. In 1844 the South Eastern ran six excursions to Dover with the option of extending the journey to France for the weekend. The motive here was profit. Other railways had different motives. Mark Huish, manager of the North Western, did not like Sunday trains for religious reasons [he was a strong Nonconformist]. He believed that the weekend ticket provided a substitute for Sunday travel.  The Saturday-Monday holiday does not seem to have acquired the name 'week-end' until 1870. By the late 1880s the habit had evidently grown. Bradshaw, the railway guide, shows early morning trains running up to London to Mondays only from Eastbourne, Hastings, Ramsgate and Yarmouth as well as from Llandudno to Liverpool, Manchester and Birmingham. By 1914 there were ten such trains altogether but there never seems to have been any in Scotland.  For the middle classes the development of this type of service had two advantages. First it have them the opportunity to take weekend holidays. Secondly, it allowed the family to live away from the major conurbations and the husband could go home for the weekend.

There are major problems for historians in examining Victorian tourism and the impact railways made. There are no parliamentary enquiries or official statistics. Census returns give little information since they were taken in April when few tourists were on the move. As the tourist traffic grew, in extent and complexity, many of the British railway companies put part of it into the hands of agents or outside firms. The 'tour' was nothing new; guidebooks had been produced since the seventeenth century, the Grand Tour was part of the education for the wealthy in the eighteenth century[3]. By 1824 steamboats were plying the east coast from London to Leith, the port of Edinburgh; one was named The Tourist. In 1845 two men appreciating what could be done with railways and steamers came forward with offers to arrange this kind of travel, guaranteeing accommodation on trains and ships in return for a single payment: Joseph Crisp in Liverpool and Thomas Cook in Leicester. It is Cook on whom we focus:

  • Cook offered two tours by train from Leicester to Liverpool and on by a steamboat to North Wales in 1845. The following year he organised a tour to Scotland.
  • Cook never had any monopoly in the travel business, not with his liberal principles would he have sought one. But his firm remained much the most famous. His outstanding quality was his imagination, served by intense energy and in the early 1860s his lack of real business sense resulted in the firm moving from Leicester to London and his son John Mason Cook playing a more active role on the strict business side.
  • The result was the genesis of what today is called the package holiday.

The railways' excursion and tourist business had come to be very substantial indeed before 1914. In the early years, down to 1851, the pleasure of travel was combined with the discomfort and fear of travelling by the new trains. Improvisation was the characteristic feature of tourism. By the 1860s the business had became, as a general rule, to be well managed. Trains were more tolerable to travel in and excursions had become an accepted part of the British railway system. Seaside resorts strove hard to achieve rail links with London or the great industrial centres. When Torquay achieved this ambition in 1848 a public holiday was declared in the town. The railway did not reach Bournemouth until 1870 but in the following decade its population grew from 5,896 to 16,859 and by 1911 reached 78,674. Excursions became most obvious in the mass movements on or around the principal public holidays. There would have been little point in Parliament passing the Bank Holidays Act 1871 had there not existed a railway system capable of carrying thousands of wage earners and their families to the seaside and back in a day at remarkably cheap rates.

Urban growth and creation was influenced by the emergent railway system. Some towns owed their very existence to the enterprise of a railway company. Others would not have grown if the railway had not helped to provide access to markets for the goods they produced and yet others had their character radically altered as a result of the extension of railway communications.

  1. In 1841 no such place as Crewe appeared in the national census. There were only two small parishes of Monks Copenhall and Church Copenhall with a combined population of 747. Communications in the area were poor; roads were covered with 'excessively deep' ruts. By the end of 1842 four routes converged at this point of the railway system establishing links with Manchester, Birmingham, Chester and Liverpool. In late 1841 the Grand Junction Railway started to build its locomotive and carriage works there and the town grew very rapidly. By 1901, the year in which it produced its 4,000th locomotive, Crewe had a population of 42,074.  Less spectacular was the development of Wolverton in Buckinghamshire. In 1838 the London & Birmingham Railway decided to establish its engine works on a site conveniently placed between the two cities. Population grew: from 417 in 1831 to 2,070 by 1851. By 1907 there was employment for 4,500 men and boys in the railway carriage works. Swindon became the engineering centre for the Great Western Railway employing 14,000 men by the turn of the century. Railway workshops were not always built in rural settings and it is easy for historians to overlook those in the urban environment. Stratford, in east London, fulfilled the same role for the Great Eastern Railway as Swindon was for the Great Western.
  2. Dozens of towns, though not the creation of railway companies, owed their rapid development to the presence of good communications.  The spectacular emergence of Barrow in Furness as a major industrial centre after 1840 was associated with the expansion of iron mining and smelting; the Furness Railway played a decisive role in opening up the district that had earlier been remote and difficult of access.  Middlesborough, though not so geographically remote, was a parallel case in that the railway was an essential agency in the growth of the iron and steel industry.

The railways' influence in opening up new urban centres continued up to 1914. After 1860 the construction of branch lines helped to create or enlarge residential suburbs of large towns and cities rather than establish completely new industrial towns. However, the early development of railways was not entirely constructive and when the railway companies extended their ownership of property within already existing cities their role was also partly destructive. By 1900 the railways had over five per cent of the central areas of London and Birmingham, more than seven per cent of the corresponding districts of Glasgow and Manchester and nine per cent of central Liverpool. This led to considerable dispossession of the powerless and the poor. In building new stations, goods yards and stables in the centre of big cities, railway companies avoided large factories. It was far cheaper and less complicated to buy up large numbers of individual houses, especially where one landlord owned them. As a result railways contributed to the creation of urban ghettos and inner city deprivation.

  • As well as those dispossessed by the building of a new depot, there was usually an influx of labour into an area as more casual labour would be needed. At the same time as the number of houses and rooms were reduced, the demand increased. It was all very well suggesting that those displaced should find new homes outside the city centre. But, as one witness to the Royal Commission on Metropolis Railway Termini expressed it 'the poor man was chained to the spot; he had neither the leisure to walk nor the money to ride....'
  • Money to ride' implied travelling at the normal third -class, penny-a-mile rate established from 1844 and this proved to be too expensive. Parliament did attempt to require railway companies to provide workmen's trains at concessionary rates that were very cheap. In the Cheap Train Act 1883 Parliament intervened in a more comprehensive manner and extended what some railway companies had already begun to do. The result was a dramatic increase in workmen's tickets. An average of 26,000 was issued daily in the London area in 1882; by 1912 a quarter of all suburban rail passengers travelled with these tickets.
  • With parliamentary encouragement the railways had made something of a contribution to the dispersal into healthier districts of the people living in the grossly overcrowded city centres. However, the continued existence of slums a generation after the passage of the 1883 Act makes it very clear that it would be wholly misleading to suggest that the housing problem could be solved simply by a policy of concessionary fares.

The importance of the railways to social developments between 1830 and 1914 cannot be underestimated. Railways impinged on the lives of all sections of society, increased mobility, improved diet as well as introducing a degree of uniformity on the diversities of regional and local experience. They engendered wonder and fear, changed the landscape of the country whether rural or urban, and liberated society from the constraints and slowness of existing modes of travel. Yet railways could not have been as successful as they were without those modes of travel. Roads provided short-distance feeders to railway stations; canals still carried heavy goods; and England was still a horse-driven society in 1914.


[1] On the social impact of railways Jack Simmons The Victorian Railway, Thames & Hudson, 1991 is a work of major importance.

[2] It was 111 years before another bad accident occurred to an excursion train running on a Sunday!!

[3] On this see Jeremy Black The Grand Tour, Allan Sutton, revised edition, 1992.

Railways: operation and economic impact

Railway traffic, both passenger and freight grew steadily during this period. Passenger numbers rose from 24.5 million in 1842, to 72.9 m in 1850 to 507 m by 1875, freight tonnage from 5.4 million in 1842 to 38 million in 1850 to 119.6 million in 1875 and total revenue from £4.8 m in 1842 to £61.3 m in 1875. Although some companies created new traffic, the principal aim was to supply improved facilities for existing customers. The trunk-line railways that eventually dominated the industry established themselves as specialist high-tariff businesses. As the industry expanded there were two significant changes in the composition of the business handled:

  • There was an increased emphasis on freight from the mid-1840s. In the decade 1835-45, the major companies concentrated on passenger traffic, deriving three quarters of their gross revenue from this source. By 1850 the proportion had fallen below half.
  • There was a shift in passenger traffic to third class: in 1845-6 third class passengers made up half of total numbers and produced a fifth of the total revenue; by 1870 the proportions had risen to 65 and 44 per cent respectively.

Railways were slow to exploit their freight-carrying advantages. As late as 1835 locomotive technology was confined to a few lines and not until the early 1840s that locomotives were capable of hauling heavy goods trains. It was only with the company amalgamations of the late 1840s and the improvement of long-distance traffic interchange via the Railway Clearing House that railways were able to challenge canals and so extend their markets. Railways could carry freight in quantity and this was the key to their success.

  1. There is general agreement that railways stimulated an overall reduction in transport costs, both by introducing lower rates and by forcing competitors to cut their own charges.
  2. However, the extent of the reductions and the effects on markets and commodities are more difficult. In the period 1830-1850 railways under-cut road coaches by possibly 15-20 per cent and canals by a more substantial figure of 30-50 per cent.
  3. Retailing was transformed and new traffic was encouraged in perishable goods -- meat, fish, fresh milk and vegetables. The extension of services was accompanied by an improvement in communications at all levels, via the telegraph, postal services and newspapers, that were all highly dependent on rail facilities. Faster and cheaper travel also stimulated the growth of leisure facilities, particularly in the coastal resorts.

The railway reduced the cost and greatly improved the quality and volume of Britain's transport.

Economic growth and railways 1830-1900

Nineteenth century writers had little hesitation in assuming a direct link between the growth of the railway network and the pace of economic change. Historians today are more cautious. How much did railways really contribute to British economic growth between 1830 and 1870? G.R. Hawke Railways and Economic Growth in England and Wales 1840-1870, published in 1970, is the starting-point. He poses the question: 'To what extent did the economy depend on railways in 1865?', or more exactly, what would have been the cost of dispensing with railways and transporting passengers and goods by road and canal? Hawke is concerned with 'social saving theory' and concludes that railway services in 1865 represented a social saving of between 7 and 11 per cent of the net national income of England and Wales. He recognises that social savings were much lower in the earlier years -- about 2.5 per cent in 1850 and 6.5 per cent in 1855.

By 1870 the essential features of the railway industry -- the basic network, organisational structure and traffic patterns -- had been established. But maturity did not mean stagnation. From 1870 to 1914 there was a four-fold increase in passengers and a three-fold increase in freight. Route-mileage increased by 50 per cent, capital by 150 per cent and gross revenue by nearly 200 per cent. Inland transport was essentially rail transport in the late nineteenth century, though this is not to ignore the important role of road transport, and especially road haulage, as a short-distance feeder. There is no doubt that the contribution of railways to the economy was much greater than it had been in the 1860s. But historians have directed attention to the declining profitability of the industry and its relevance to the wider debate on British retardation and weakening competitiveness after 1870. So how were railways performing?

The net rate of return on capital fell steadily from 4.55 per cent in 1870-4 to 3.38 per cent in 1900-4. However, it was not until the 1890s that returns fell below the 4.0 per cent level of the 1860s and there was a recovery from 1901 to 3.6 per cent by 1910-12. We may conclude that after two decades of recovery, 1850-70, the industry's earning power fell back to the level of the early 1860s and that operating margins narrowed significantly.  These developments can be explained by seeing railways as the victims of the increased demand for traffic. Traffic growth occurred largely in those sectors were profits were lowest: third class passengers and small consignments of short-haul bulk freight. The emphasis of the railway companies was on expanding links by constructing branch lines at the expense of operating costs.

There were four distinct periods affecting the working environment and these corresponded broadly with changing price trends:

  1. There was a sharp rise in costs in the early 1870s.
  2. Revenue and costs per train-mile fell between 1873 and 1890 when the additional costs of an improve quality of service were offset by the falling price of materials, especially coal.
  3. In the 1890s, and notably between 1896 and 1901, there was a serious escalation of costs.
  4. After 1900 the situation changed again and there was a substantial improvement in operating efficiency; almost all of this occurred in the freight area.

The railways' difficulties were essentially problems of the late 1890s and certainly the period 1896-1901 was a challenging one. Operating costs increased sharply, traffic growth slowed down and the extra burdens of newly raised capital put pressure on profit levels. All this was accompanied by legislation seeking to control two areas of railway economy: charges and labour costs. The Railway Regulation Act 1893, which aimed to restrict excessive working hours, and the Railway and Canal Traffic Act 1894, which established the 1892 rates as new maximum charges, were examples of the many efforts to make the railways conform to public expectations

The degree to which the railway companies were responsible for this situation is a matter of some disagreement. Derek Aldcroft suggests that much of the problem was due to managerial shortcomings and there is evidence that while managers were aware of the need to prune uneconomic services, they frequently yielded to pressure from customers. The results, in the case of uneconomic lines, were economies by squeezing labour and curbing the quality of services. Other historians place emphasis on the more hostile political environment in which railways were places after 1870: governments were prepared to legislate on passenger fares and safety in the 'public interest'.

The Railway and Canal Traffic Act 1873, the Cheap Trains Act 1883 and the legislation of 1888-94 were all part of a significant shift in public opinion. Railways were seen more as public corporations than as profit-making businesses. It as in this environment railways experienced diminishing returns, while producing substantial benefits for society as a whole.