Fire and Steam (18 page)

One by-product of the creation of the Railway Clearing House was the standardization of the ticketing system. Obvious ideas are sometimes, well, just too obvious, once someone comes up with them. Tickets had hitherto been little more than scraps of paper made out by hand. Now an enterprising clerk, Thomas Edmondson, a Quaker, appalled at the ease with which company money was expropriated by dishonest ticket office staff (the information on the paper was not
necessarily reconciled in the station accounts), earned his name in railway history by suggesting that tickets be numbered consecutively, thereby facilitating accounting and preventing fraud. He also devised a system of serially numbered and dated card tickets ready to be sold to passengers which initially he produced himself on a simple wooden printing frame. His system was quickly adopted by most British railways and he was rewarded handsomely with a royalty of 10 shillings (50p) per route mile. Edmondson tickets became the norm for railway networks across the world and lasted in Britain for 150 years, until the advent of computer-generated tickets in 1990.
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Another side effect of the establishment of the clearing house was faster progress towards the standardization of time. Until the advent of the railways, towns across Britain kept their own time, based on the sunrise, and travellers would have to adjust their watches gradually as their journey took them east or west. Plymouth, for example, was twenty minutes earlier than London but this hardly mattered for a passenger on a stagecoach which had taken twenty-two hours to cover the distance. Even railways operating over relatively short distances as a shuttle service could get away without bothering too much about the discrepancy, but once a network built up with a far more complicated timetable, it was essential that the time be standardized throughout its workings. The Great Western, for whom the problem was most apparent since it was an east–west railway, determined in 1841 that trains should operate on Greenwich Mean Time, except that Reading would be four minutes earlier, Chippenham eight and Bristol and Bath fourteen. That was pretty confusing for passengers and not surprisingly there were various accounts in the newspapers of people left stranded at obscure junctions because they had missed the train. Adherence to the timetable was made even more arbitrary by the fact that drivers on the London & Birmingham were injuncted to pull out of stations three minutes after the scheduled departure.

As early as 1845, Henry Booth, still the secretary of the Liverpool & Manchester, suggested that all trains should run to the time kept at the Royal Greenwich Observatory which had been founded by Charles II in 1675, but his proposal to Parliament was defeated. However, as the network grew and the introduction of the electric telegraph enabled
time signals to be transmitted instantaneously, the case for standardization proved unanswerable. The Railway Clearing House kept lobbying for standardization and the Great Western, to set an example, unified its time in 1852 and most other railways quickly followed. ‘London' or ‘railway' time, the usual name for Greenwich Mean Time, then began to be adopted on the growing number of clocks erected by local authorities and in shops as well as by the railways themselves. In effect, the railways created the beginnings of the regimented and time-driven society which is now prevalent throughout the developed world. However, it was not until 1880 that the standard time became enshrined in law with the passage of the clumsily named Statutes (Definition of Time) Act. British railways were to have lasting worldwide influence when in 1884, at an international conference in Washington DC, it was agreed that Greenwich should be the zero meridian.

The railway mania bubble burst because ultimately it was based on little more than optimism feeding on itself. When investors realized that the future was not necessarily paved with gold, collapse was inevitable. There was no single event that precipitated the change in climate, but probably as early as October 1845, when the Bank of England raised interest rates, the cannier investors were beginning to cash in their shares and the price curve first levelled out and then turned relentlessly downwards. The sheer breadth of holdings, however, initially stalled the pace of the downturn. Everyone seemed to own railway shares. A caricature in
Punch
magazine even had Queen Victoria asking her husband if he owned any shares, and in Yorkshire, Emily and Anne Brontë had ignored the warnings of their sister Charlotte and invested their small savings in Hudson's York & North Midland Railway.

Consequently, when things went wrong, the effect was universal among the upper echelons of society. A contemporary chronicler reckoned ‘no other panic was ever so fatal to the middle class . . . There was scarcely an important town in England what
[sic]
beheld some wretched suicide. It reached every hearth, it saddened every heart in the metropolis . . . Daughters delicately nurtured went out to seek their bread. Sons were recalled from academies. Households were separated; homes were desecrated by the emissaries of the law.'
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While there is no
small measure of Victorian hyperbole in this account, it demonstrates quite clearly that the middle classes invested far more in the railways than in goods such as cotton or corn which tended to be traded only by professional investors and speculators.

There may have been a range of newspapers covering the railway industry, but there was nothing like the availability of information in today's computer age. Therefore there was no immediate panic as the price of stock began to go down as a result of the higher interest rates, but the process was steady and irreversible. Against an index value of 100 in 1840, railway shares had risen to 149 at the peak when interest rates rose and then fell back to 95.5 by 1848 and to 70.4 two years later. In other words, people had seen the value of their holdings fall by a third, while the least fortunate, who had put their money into failed schemes, lost everything. As ever, there was no shortage of insider dealers who knew when to get out while the average punters – for that is what they were – suffered disproportionately. The public turned their anger on the lawyers who benefited from schemes whatever their success and who had tried to maintain the bonanza by promoting schemes themselves. To cap it all, the lawyers then profited even more from the complex litigation which arose out of failed schemes since there were no guidelines on how to dissolve a bankrupt railway company and disburse any remaining assets.

Although the collapse was deeply damaging both to the railways and the overall economy, the vagaries of investment in the railway industry cannot be blamed for the economic downturn of the late 1840s. It was not so much the internal contradictions of the railway mania which brought about its end, but rather the deterioration in the rest of the economy. The railways had not been the only beneficiaries of unwise investments. Early in 1847, with the Corn Laws abolished, the price of corn began to rise; then in May, when the speculative bubble burst, it fell by 40 per cent over a few days. Banks who had lent on the basis of the high prices were in trouble and both dealers and their bankers quickly started going bankrupt. Interest rates doubled from 3.5 per cent in January to 7 per cent in May and reached 10 per cent in November. This not only killed off any speculative potential for railway shares but also threw the economy into depression. The collapse of the mania,
therefore, was not so much the cause of the downturn but rather one of its consequences, intensified by the changes brought about by the repeal of the Corn Laws.

It is easy to exaggerate the damaging aspects of the mania because they affected so many people, but in the long term the positive consequences outweigh the negative. As we saw in the last chapter, the railway network in 1843 was insufficiently developed and had not yet become a national system that could cater for the burgeoning economy and rising living standards. It needed expansion and while the mania might have resulted in over-rapid growth, there had been many gaps to fill. While clearly some unviable schemes were promoted during that period, that does not diminish the contribution of the mania in creating a vital part of Britain's infrastructure which survives to this day. Indeed, the very fact that virtually the entire network of main line railways, with the notable exception of what became the Great Central, had been authorized by the end of the period tends to suggest that, arbitrary as the process appears in hindsight, it did deliver a largely coherent network of railways. While the promotion of new schemes ground to a halt by 1850, there were still a lot of lines under construction well into the 1850s.

The scale of the railway mania can be illustrated by a simple statistic: by 1847 investment in the railways represented 6.7 per cent of all national income. As a result, the 1840s saw the biggest mileage ever added to the railway network of any decade before or after – an extraordinary 4,600 miles. Just to put that achievement in perspective, consider how in recent years it has taken nearly a decade of construction and twice that long in gestation to build a mere sixty-seven miles of high-speed line between St Pancras and the Channel Tunnel. Moreover, the mania, the rather unfair name given to this fantastic period in British engineering, paved the way for a new hierarchy in the industry that would prevail for the next century, until nationalization in 1948.

SIX

THE BIG COMPANIES: GREAT BUT NOT NECESSARILY GOOD

By the early 1850s, with more than 5,000 miles of the railways completed, the large companies were in an even more dominant position, thanks to Hudson's consolidation and other mergers. The overall influence of these large railway companies can be underestimated if mileage alone is taken into account, since they often controlled smaller local concerns, either through unlimited running rights or by setting the charges for access to their tracks. Railways are inherently regional, which meant the operations of these large concerns were mostly self-contained, but that did not prevent considerable fighting over territory in the swathes of country between their main lines, often resulting in unnecessary parallel routes being built to protect their monopoly.

By 1854, two thirds of the lines that were to form British Rail's InterCity network – its main line spine – had been built and the biggest gaps were in the further corners of the United Kingdom: Wales, the Highlands, the Pennines north of Skipton, north Norfolk and Lincolnshire. The suburban network around London was then in embryonic form and few of the commuter lines from the south-east into the capital had been built. Indeed, commuting by rail had not yet become widespread, as evidenced by the fact that the average passenger arriving at Euston had travelled sixty-four miles, the equivalent of more than half the journey from Birmingham. The provincial cities had only their
main lines, rather than the host of smaller routes which surround them today, and there were few of the branches whose construction would see the mileage of railway doubled over the next twenty years. There were, too, a few competitive routes, or, to put it another way, duplication, especially on services between London and the Midlands and the north, that would be the focus of much of the bigger companies' attention over forthcoming years.

All the big companies were flexing their muscles and expanding. During the mania and its immediate aftermath, the Great Western, still with its broad gauge, had grown through expansion, notably up to Birmingham and the Black Country. The Midland, with 434 miles, had more mileage, but it was not a coherent network; and the Great Northern, blessed with a relatively easy topography, had quickly emerged as a major player when its line opened in 1849, running between Maiden Lane, its temporary southern terminus just north of King's Cross, and York via a meandering route through Lincolnshire.
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In Scotland and in the south of England, the position was less clear-cut, with, in each case, four major railways beginning to emerge. The dominant company of that period was the London & North Western Railway, created in 1846 by the inevitable merger of the two companies which made up the first 200 miles of the West Coast main line: the London & Birmingham and the Grand Junction, which included the pioneering Liverpool & Manchester that had been taken over the previous year.

The London & North Western may not have been much bigger than its rivals in terms of mileage, but thanks to the importance of its lines it was ‘the prototype of the arrogant, self-sufficient, lordly railway company'
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whose offices were, suitably, housed in the grandeur of Euston with its elegant double staircase and huge classical hall. The company was the big bruiser of the railways, throwing its weight around to intimidate smaller local neighbours as well as its larger competitors on the routes between London and the north. Charles Dickens sounded almost in awe of the London & North Western when he described the company in his weekly journal
Household Words
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as being ‘wealthier than any other corporation in the world', a status it retained for a couple of decades. Indeed, its value was greater than the capital of the East India Company and the railway carried more people
every year than the whole population of Scotland, netting an income greater than that of the entire canal network.

The London & North Western built up its enormous power thanks to its monopoly of traffic between London and the north which lasted until 1850. Even after the company's fierce battle to prevent the building of the Great Northern had ended in failure and the latter started running from Maiden Lane, the London & North Western still maintained its advantageous position because its lines connected Birmingham and Manchester with London by shorter routes than those of its rivals. It was also helped by the talent of its general manager, Captain Mark Huish, who was both a very able traffic manager (a relatively new skill that was increasingly necessary as the lines were filling up with trains) and a brilliant negotiator in dealings with other railway companies. Brought up in Nottingham, he served ten years with the Bengal Native Army, the precursor to the Indian Army, and then became secretary of the small, twenty-two-mile-long Glasgow Paisley & Greenock Railway, one of the earliest railways to serve the outlying towns and villages of a major city. After four years in the job he was poached by the Grand Junction Railway and he successfully negotiated the merger that created the London & North Western.