History of Railways in Britain

Cheap efficient land transportation was an essential need of the industrial revolution as existing road transportation by wagon was too slow and expensive. Although English shippers had experimented with man-made canals from the middle of the eighteenth century, canals had many problems. They were expensive to build and maintain; they traveled as fast as a mule could walk, no more than three miles an hour; and using steam power was impractical. Nonetheless, canals provided the main competition with railroads until well into the 1840s in both England and the United States. With its extensive river system, the midwestern and Hudson River Valley United States supported a large array of steamboats that effectively competed with railroads until the 1870s. The canals and steamboats lost out because of the dramatic increases in efficiency of the railroads, in terms of speed, scheduling, and costs per ton-mile. In Germany, on the other hand, parts of its well-integrated system of rivers and canals remained competitive into the early 21st century.

Britain
Railroads originated in England, which had created an elaborate system of canals and roadways to haul coal for the new steam engines. The engineers and businessmen needed to create and finance a railway system were also available. The first high pressure steam engine locomotive was developed by Richard Trevithick in 1802; a locomotive using smooth wheels on an iron track could pull cars of freight a few hundred yards. In 1815, George Stephenson built the prototype of the modern steam locomotive, starting a technological race over the next century to build locomotives with more power at higher steam pressures. Stephenson himself was one of the major innovators. His decisive breakthrough came in 1825 when he built the Stockton and Darlington line, a 12 mile railroad that proved the technology. On his first run, his locomotive pulled 38 freight and passenger cars at speeds as high as 12 miles per hour. Stephenson’s “Rocket” was the locomotive for the Liverpool and Manchester line, which opened in 1830. Stephenson went on to design many more railways, and is best known for standardizing designs, such as the “standard” gauge of rail spacing, at 4 feet 8½ inches. Thomas Brassey was even more prominent, operating construction crews at one point in the 1840s that totaled 75,000 men throughout Europe, the British Empire, and Latin America. He and thousands of British engineers and crews went all over the world to build new lines.

See Also: Rainhill Trials

British engineers invented and improved thousands of mechanical devices, and developed the science of civil engineering to build roadways, tunnels and bridges. The telegraph, although invented and developed separately, proved essential for the internal communications of the railways because it allowed centralized control over all the trains in the system, shifting slower trains to a siding while a fast train went by, warning of hazards, and sending out orders to fix or work around troubles. Most important for efficiency, the telegraph allowed a system to use a single track for two-way traffic. Although the first U.S. telegraph line was not in place until 1844, it took another decade for the telegraph to be used for dispatching trains, and after this, it was not until later in the century to find widespread use.

The vital role played by railway timetables meant that throughout Britain, time had to be standardized on Greenwich Mean Time, instead of each town having its own time.

Britain had a superior financial system based in London that funded both the railways in Britain and also in many other parts of the world, including the United States, up until 1914. The boom years for British investment were 1836 and 1845-47, when 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. A new railway needed a charter, which typically cost over £200,000 (about $1 million) to obtain from Parliament, but political 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 railroad charters. The railways responded by purchasing about a fourth of the canal system, in part to get their rights of way, and in part to buy off critics. Once a charter 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.

Isambard Kingdom Brunel‎ (1806–1859) designed the first major railway, the Great Western, built originally in the 1830s to cover the 100 miles from London to Bristol. After Brunel turned to steamships, George Hudson (1800-71) became the most important railway promoter of his time. The “railway king” of Britain, Hudson amalgamated numerous short lines and set up a “Clearing House” in 1842 which rationalized the service by providing uniform paperwork and standardized methods for transferring passengers and freight between lines, and loaning out freight cars. He had a particular aptitude for visualizing and arranging spectacular company and line amalgamations and his activities helped to bring about the beginnings of a more modern railway network. In 1849 he exercised effective control over nearly 30% of the rail track then operating in the United Kingdom, most of it owned by four railway groups, the Eastern Counties Railway, the Midland, the York, Newcastle & Berwick, and the York & North Midland, before a series of scandalous revelations forced him out of office. The economic, railway, and accounting literatures have treated Hudson as an important figure in railway history, although concentrating largely on the financial reporting malpractices of the Eastern Counties Railway, while Hudson was its chairman, which were incorporated into the influential Monteagle Committee Report of 1849.

By 1850, rates had fallen to a penny a ton mile for coal, at speeds of up to fifty miles an hour demonstrating that Britain had a well-integrated, well-engineered system that allowed fast, cheap movement of freight and people. The system directly or indirectly employed tens of thousands of engineers, mechanics, repairmen and technicians, bringing a new level of technical sophistication that could be applied to many other industries, and helping many small and large businesses to expand their role in the industrial revolution. Thus railroads had a tremendous impact on industrialization. By lowering transportation costs, they reduced costs for all industries moving supplies and finished goods, and they increased demand for the production of all the inputs needed for the railroad system itself. By 1880, there were 13,500 locomotives which each carried 97,800 passengers a year, or 31,500 tons of freight.

Leunig (2006) assesses train speeds in England and Wales during 1843-1912. Trains were fast compared with coaches or walking, and the social saving of time saved grew over time to become over 10% of national income in 1912. Including fare savings, social savings were 14% of national income in 1912, with consumer surplus of 6%. Time savings dominated fare savings once railways became a new good: travel for the masses. Using the social savings-total factor productivity identity, the article shows that railways accounted for around a sixth of economy-wide productivity growth in this era.

British labour
Howlett (2004) explores an important labor market development toward the end of the 19th century, the rise of the internal labor market. Railway companies were pioneers in this area, and in 1904 comprised all 10 of the largest enterprises in Britain. Howlett presents an analysis of the career histories of 848 traffic staff workers of the Great Eastern Railway Company. This large longitudinal sample provides the first detailed account of the internal labor dynamics of a pre-1914 railway company, providing a unique insight into an early internal labor market. Union membership was quite low before World War I. There was a clearly structured market for unskilled entrants, that promotion and demotion were an important managerial tool, and that there was a significant wage premium for promotion.

Nationalization and privatization
Bagwell (2004) shows the Railway Bill of February 1993 privatized the railways. Railtrack was responsible for the infrastructure; passenger services were provided by (initially) 25 operating companies, while goods services were concentrated in three companies, eventually EWS (English Welsh and Scottish Railway Ltd). The records and experiences of travelers reveal that punctuality and reliability, i.e., the likelihood of timetabled services running at all, deteriorated. Passengers' complaints increased in number. Under British Rail, before 1993, much engineering work was done "in house." Contracting it out was detrimental to good overall management and contributed to low morale among passengers and staff alike. Secretary of State for Transport Stephen Byers's decision in October 2001 to put Railtrack under administration is explained.