A Misinformed but Devious Take-over of a Railway

The Somerset and Dorset Railway in 1875

The ultimate point of my PhD on the London and South Western Railway’s (LSWR) management between 1870 and 1910 is to determine the quality of managers' and directors' decisions in the period. Therefore, I deal with questions surrounding what drove decisions and what decision-makers knew when making them. One event I focus on is the LSWR and Midland Railway’s lease of the Somerset and Dorset Railway (SDR) in 1875.

The LSWR and Midland Railway's Lease

The SDR was formed from a number of small companies in 1862. Yet, after connecting to Bath in 1874 it got into financial trouble, even though the trade with the Midland at that place and the LSWR at Templecombe was healthy.[1] Consequently, the beleaguered company approached the Great Western Railway (GWR) with the proposal that it would purchase the SDR. Thereafter, the GWR and its Bristol and Exeter Railway (BER) allies engaged in protracted negotiation with the SDR,[2] and by early August a deal was close. On the 12 August 1875 James Grierson and J.C. Wall, the GWR and BER General Managers, visited the LSWR’s General Manager, Archibald Scott, at Waterloo. The LSWR and GWR were fierce competitors, but as an act of good faith Grierson and Wall informed Scott of the negotiations and offered the LSWR a working agreement on the southern part of the line between Templecombe and Wimborne.[3] Scott expressed his alarm at the proposal[4] and requested another meeting on the 16 August to give him time to consult the LSWR’s board.[5]

James Allport

It was at that point that the LSWR out-flanked the GWR. Scott met his board on 13 August and was immediately sent to Birmingham to confer with the Midland’s Deputy Chairman and General Manager, James Allport.[6] By the 17 August they decided to work with the LSWR to offer the SDR a better deal than the GWR and B&ER's.[7] Yet, knowledge of Scott's trip was withheld from Grierson and Wall when he met them on sixteenth,[8] with Scott stating that a LSWR half-yearly meeting of proprietors had prevented the board considering the matter.[9] This gave the LSWR and Midland time to finalise their deal with the SDR board, who on 19 August rejected GWR and BER’s offer. The agreement between the LSWR, Midland  and SDR was signed on the 1 November.[10] Naturally, the GWR was angered by Scott’s actions and opposed the leasing Bill in Parliament.[11] However, against its many protestations, this passed on 13 July 1876.[12]

Decision-making

The question remains as to why the LSWR decided to go behind the GWR's back and secure the SDR for itself? Certainly, LSWR decision-makers thought their company would benefit from leasing the SDR and augmenting its infrastructure. Scott described its traffic as being ‘in its infancy’ and at the parliamentary committee investigating the lease stated that:

James Grierson

‘A considerable amount of money will have to be expended on the Somerset and Dorset Line to improve it and make it efficient for traffic purposes, and I have no hesitation in saying that the traffic to be carried over the Somerset and Dorset Line in connection with the South Western system and the Midland as well as locally, will be very large indeed.’[13]

However, the LSWR did not employ accurate predictions of the capital expense required to realise the SDR's revenue generating potential. Like Channon argued regarding the Midland’s London extension in 1869, LSWR decision-makers’ knowledge of costs and revenues was too incomplete for accurate predictions of these things to be made.[14] Furthermore, there was realistically not time enough between Scott being notified of the GWR and BER’s plans on the twelfth, and the agreement’s completion on the nineteenth, for accurate forecasts to be formulated. This is not to say LSWR decision-makers had absolutely no idea of the potential revenues and costs of taking over the line, and the proposal for the LSWR to operate between Wimborne and Templecombe was deemed objectionable because Scott recognised the region’s poor revenue generating potential. But this analysis was not systematic, and based on ‘gut-feeling’ and experience.

In reality, the potential profits the SDR could generate with investment was not the reason the LSWR joined with the Midland to lease it. Before 1876 the SDR generated little traffic for the LSWR. In 1871 freight moving from the SDR onto the LSWR’s system contributed to the latter revenue of only £38,282, rising to £54,482 by 1875, the increase being because the Bath connection opened. Yet, this still only constituted 2.19 per cent of the LSWR’s gross receipts in 1875[15] and it is unlikely this traffic alone justified the lease.

Rather, the timing of the LSWR’s approach to the Midland and SDR were determined by the GWR and B&ER’s actions. The LSWR's trade could have been potentially disadvantaged if they had taken over the line, and Portal, the LSWR Deputy-Chairman, stated that the GWR and B&ER’s proposals were ‘highly injurious to the interests of the public, contrary to the interests of Parliament and hurtful to the South Western Company.’[16] Strategically, the SDR was important for the LSWR, with trade coming through it from the north and South Wales to Southampton. In August 1875 Scott stated that ‘…naturally the South Western Company, [has been] interested…for so many years been in the traffic in connection with the Somerset and Dorset line.’[17] Therefore, the GWR’s proposals would have given it control of this traffic, possibly damaging the LSWR's revenue.

Thus, the LSWR’s concern to control its trade and territory on its own terms, overrode others regarding the investment the line needed or its revenue generating capacity. Indeed, LSWR decision-makers were attempting to protect a regional monopoly, as Dodgson argued occurred at the time in the industry more generally.[18]

Archibald Scott

However, the lack of accurate cost and revenue predictions played a role in LSWR decision-makers’ mind-sets when approaching the SDR takeover. Firstly, they had believed from as early as the 1840s that traffic and revenue would always increase irrespective of the state of the economy (as I prove elsewhere in my Phd). This fed the belief that territorial protection would always put extra traffic onto the LSWR’s system, which would ultimately be good for company profits. Consequently, because accurate project forecasting was largely absent and decisions were usually made based on gut-feeling, these largely assumed beliefs underpinned the rationale and timing of most decisions. Indeed, in the SDR's case, for the LSWR to loose territorial control, may also have potentially lost it the profit from the naturally assumed traffic growth. Again, Channon argued that similar thinking was behind the Midland Railway’s construction of the London extension.[19]

A Successful Take-Over?

Ultimately, the SDR lease mirrored Watkin’s extensions of the Manchester, Sheffield and Lincolnshire railway to some extent, as Hopkins described them as ‘expensive failures’ because they ‘were not properly weighed up as investment opportunities’.[20] While the the success of the SDR lease is hard to determine accurately, it was seemingly limited. Between 1875 and 1880, when the LSWR and Midland was investing heavily in the line,[21] passenger numbers hauled grew by 53.22 per cent, and goods tonnage hauled increased by 26.75 per cent.[22] Contrastingly, the LSWR’s passenger traffic numbers grew by 44.26 per cent and goods tonnage by 37.90 per cent over the same period. Yet, thereafter, traffic growth on the SDR stalled, and between 1885 and 1895 the passenger and goods traffic originating from the company grew by 26.94 and 14.58 per cent respectively, while the LSWR’s proportions were 53.02 and 34.47 per cent.[23] Therefore, in later decades the SDR’s own traffic growth was proportionately much lower than the LSWR’s, and its traffic would have made up proportionately less of its parent company's over time.[24] Nevertheless, the benefit of the LSWR controlling the line for its traffic from the north and South Wales may have been considerable as the SDR provided a more direct route to Southampton for it, but this cannot be determined.

Overall, however, the case of the SDR lease shows that rather than mid-Victorian railway managers and directors making calculated decisions about network expansion; the protection of territory was a very important concern for them in the period. Yet, this was despite them never being able to truly quantify what the costs and benefits of protecting this territory would be.

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[1] Williams, R.A., The London and South Western Railway, Volume 2: Growth and Consolidation, (Newton Abbot, 1973), p.173

[2] MacDermot, E.T., revised by Clinker, C.R., History of the Great Western Railway: Volume 2, (Shepperton, 1982), p.52

[3] The National Archives [TNA] RAIL 1066/1692, Sir D. Gooch to the Hon. R.H. Dutton Bart. 26 August 1875, p.44

[4] TNA, RAIL 1066/1692, Wyndham S. Portal. To Sir D. Gooch, 4 September 1875, p.46

[5] TNA, RAIL 1066/1692, Sir D. Gooch to the Hon. R.H. Dutton Bart. 26 August 1875, p.44

[6] TNA, RAIL 1066/1692, Archibald Scott’s evidence for Somerset and Dorset Railway Bill, Minute No. 418, p.55

[7] Williams, The London and South Western Railway, Volume 2, p.174

[8] TNA, RAIL 1066/1692, Sir D. Gooch to Wyndham S. Portal. 27 October 1875, p.48

[9] TNA, RAIL 1066/1692, Sir D. Gooch to the Hon. R.H. Dutton Bart. 26 August 1875, p.44

[10] Williams, The London and South Western Railway, Volume 2, p.174-175

[11] TNA, RAIL 1066/1692, Parliamentary Bills and Minutes of Evidence, etc.

[12] Williams, The London and South Western Railway, Volume 2, p.175

[13] TNA, RAIL 1066/1692, Archibald Scott’s evidence for Somerset and Dorset Railway Bill, Minute No. 378, p.42, 24 March 1876

[14] Channon, Geoffrey, Railways in Britain and the United States, 1830-1940: Studies in Economic and Business History, (Aldershot, 2001), p.107

[15] TNA, RAIL 1066/1692, Archibald Scott’s evidence for Somerset and Dorset Railway Bill, Minute No. 369, p.41, 24 March 1876

[16] TNA, RAIL 1066/1692, Wyndham S. Portal. To Sir D. Gooch, 4 September 1875, p.46

[17] TNA, RAIL 1066/1692, Archibald Scott’s evidence for Somerset and Dorset Railway Bill, Minute No. 375, p.42, 24 March 1876

[18] John, ‘New, disaggregated, British railway total factor productivity growth estimates, 1875 to 1912’, The Economic History Review, 64 (2011), p.639

[19] Channon, Railways in Britain and the United States, 1830-1940, p.107

[20] Hodgkins, David, The Second Railway King: The Life and Times of Sir Edward Watkin (Llandybie, 2002)

, p.486

[21] TNA, RAIL 262/16, Somerset and Dorset Joint Line Committee, Meetings of Officers 1875-1884

[22] Board of Trade, Railway Returns for England and Wales and Scotland and Ireland, 1875, p.58-62 and 1880, p.50-54

[23] Board of Trade, Railway Returns for England and Wales and Scotland and Ireland, 1880, p.52-56 and 1885, p.52-56

[24] Board of Trade, Railway Returns for England and Wales and Scotland and Ireland, 1875, p.62 and 1880, p.54

We were Coachmen, Servants and Craftsmen. Early Railway Recruitment - Part 3

This is last post on research that I have been doing on the occupations that 400 London and North Western Railway (L&NWR) employees had before coming  to the company’ Traffic, Coaching and Operating Department (hereon known as the traffic department) between 1837 and 1860. This is based on a single file found in the National Archives. In the first post (here) I discussed how most of the department’s new employees came from the company’s permanent way department. The second post (here) presented evidence relating to those who went into the department directly after school, and those that came from the army or from being labourers. This last post will look at individuals who had worked in transportation industries, were previously employed as servants and those who had been skilled craftsmen.

One of the big questions relating to the early railways is how many employees came from other transportation industries. The results above reveal that the number was small and only ten had been involved in such businesses (2.50%). The ten were constituted of two mariners, five coachmen, one carman, one letter carrier and one currier. What is interesting about the ten is that there were no individuals who had worked in the canals.  Indeed, apart from the mariners (and possible the carman), it seems that most had been working for themselves.  Coachmen, particularly, were seeing the railways as a chance to improve their fortunes in the greatest number.

Furthermore, it also seems that there was no pattern as to when ex-transport workers joined the railway, and in each of the six periods I have split the years between 1837 and 1860 into (see above) there are always at least one individual joining the department. The only pattern that has been discerned is the types of jobs that the men went into. Eight of the ten went into the secondary labour market (with low weekly pay, low job security and few promotional prospects), becoming Porters (3), Guards (1), Pointsmen (1), Ticket Collectors (2) and Police Constables (1). However, only two joined the company’s primary labour market (with high job security, promotional prospects and good pay), one becoming a Station Master and another becoming a station agent. Indeed, these individuals were the mariners, clearly indicating that their prior jobs were perceived as being more skilled and that their education made them suitable for administrative posts. Therefore, this further reveals, as the last post did, that employment patterns before the railways came into existed determined how the L&NWR appointed individuals to posts.

Ex-servants constituted a large number of the sample, with fifty-seven of the 400 being employed as such (14.25%) before coming to the railway. Of these two had been butlers, one was a footman, six had been grooms, thirteen were listed as having been in ‘Gentlemen’s service,’ while thirty-four were simply described as servants. There seems to be no pattern as to when they joined the railway. In the years between 1837 and 1839 they made up 9.09% of those joining the department. In the early 1840s, however, none joined, but in the late 1840s they constituted a massive 19.05%. In the early 1850s the proportion dropped to 8.93%, then rose 16% in the late 1850s and 24.59% in 1860. Thus, the evidence implies that the labour market changed. Before the railways domestic service was the largest employing sector of the economy. However, as shown, when the railways came along they took over this mantle and many people saw them as means to obtain better employment prospects.

Most of the servants went into the secondary labour market. However, it is interesting that large numbers were in the positions that had a public service focus (and which were cleaner). Thus, twenty-seven became porters, three became ticket collectors and nine became police constables. Therefore, there was a clear link between the types of occupations individuals did before they came to the railway and the positions they took up within the L&NWR. This is reinforced by the fact that the Butler, an individual who was a ‘club servant’ (whatever that is) and a man who was in a ‘gentleman’s servant’ were the only three who went into the primary labour market as an Agent, Clerk and an Assistant Agent respectively. Thus, because two of these seemed to have been servants of a higher status, and one may have been, they were accordingly given jobs in the railway that were of similar standing.

Lastly, the forty-one skilled craftsmen were in the sample, and had been occupied in twenty-eight different professions including Tin-Plate Workers, Brassfounders, Shoemakers, Brickmakers and Weavers. Proportionately, skilled craftsmen were the largest group of individuals joining the railway in the period 1837 to 1839, constituting 27.27% of them. Thereafter, their contribution hovered around 10% in each of the remaining periods. I am uncertain what this suggests, and because the sample size for the period between 1837 and 1839 is only twenty-two, the figure may be artificially high.

Furthermore, unlike the other areas of the economy, where individuals’ jobs before they came to the railway affected their position within it, the correlation in the case of the skilled craftsmen was not as strong. The craftsmen took up positions in both the primary and secondary labour markets. Given that the majority of individuals had at least a fair education given their professions, it would suggests that the L&NWR was not just assigning individuals to their posts based on their prior occupations, but also on their ability to undertake their responsibilities.

Overall, I have not been able to reveal in these three posts all the information that I have discovered. However, a number of interesting things have been revealed about recruitment in the early L&NWR’s. Firstly, its Traffic Department recruited heavily from its engineering sections, suggesting that the completion of lines and the subsequent unemployment this brought for some, allowed the company to choose from known staff. Furthermore, there were not a great number of individuals who worked previously in either the military or other transportation industries, as has always been suspected. Lastly, the jobs that individuals received from the railway company were closely correlated to the level of skill and education that were required for their original occupations.

This is by no means a complete study, and there are over 300 pages in the document that haven’t been surveyed. Thus, I hope to do this at some point and give an even better picture of early railway recruitment.

Publishing on the Rail - Victorian Railway Journals

Over the course of the railways’ 200 years, many magazines and journals have been produced that commented on the industry, but which were not written by the companies themselves. Today your local newsagent will present you with a plethora of titles of this type. Amongst these are RAIL magazine for the more industry-minded individual, The Railway Magazine, for those interested in all aspects of railways, past and present, and there is Backtrack, for people interested in the history of the railways. However, the history of railway journals and magazines is a long one that stretches back to the very origins of the railway network. Particularly in the Victorian period, who was interested in the industry and how it was perceived was reflected in the nature of the publications that were started at different points.

The earliest publications that commented on the railway industry were aimed of those people who had the biggest interest in the railways, the shareholders. As such, many of the titles were appropriately named, for example the Railway Record and Joint-Stock Companies reporter (1844), the Railway News and Joint-Stock Journal (1864) and Herpath’s Railway and Commercial Journal (1843). These were joined by the Railway Chronicle (1846), the Railway Times (1835) and the Railway Gazette (1835). These magazines’ primarily focussed on the economic aspects of the railway industry. Thus, articles on the shares, new schemes, income, directors and economic health of the railway companies dominated. This wasn’t surprising given the amount of money investors in Britain were pouring into the vast number of railway projects that were started in this period. Thus, these publications were a conduit through which shareholders could make sure that their investments were secure, or, as in many cases during the railway mania of the mid-1840s, investors could find out if their investments had been washed away.

While these types of magazines continued through into the 20^th Century, in the late 1900s professional journals started to become available for railway employees. Amongst these were the Railway Fly Sheet and Official Gazette (1870), which was aimed at railway officials and administrators. It later changed its name to the Railway Official Gazette (1882). Further, there was The Railway Engineer (1880), for engineers and locomotive men, as well as The Railway Herald (1887) that was started for all railway employees.

Whereas in the early years of the industry publishers had focussed on what was the important issue in the railway industry, the building, performance and financing of companies, by the late Victorian period they published these journals for the vast numbers of railway professionals that were helping to keep the industry working. The change that drove the creation of these magazines was that the emphasis inside and outside of the industry was no longer the establishment of railway companies. Rather, it was the quality of their operation. Therefore, these magazines contained articles on new innovations within the industry, changes in management procedure and practice, and news of changes within the industry. Thus, their aim was to become staff magazines, but which were published by external actors who were taking advantage of an increasingly professional and mature industry.

The last set of railway magazines to be established were those created primarily for individuals who were not investors or employees, but who had an interest in the industry. The two most notable publications were the Railway Magazine (1897) and The Railway and Travel Monthly, (1910) which was started by one of the former’s disgruntled journalists. Both were very similar publications in that they contained articles on aspects of the industry for individuals who wished for a ‘light’ read. So, the September 1912 issue of The Railway Magazine carried articles on ‘Theatrical Traffic on the London and North Western Railway’, ‘British Locomotive Practice and Performance’, ‘The Central London Railway: Its Extension East and West’, ‘The Melbourne to Adelaide Express’, ‘Rambles on the Caledonian Railway’ and ‘The Smallest Railway in America.’

Essentially, these publications reflected the fact that the industry had passed the profitable and mature phases of its history, and was now ingrained in the fabric of the nation. The railway industry was something that everyone interacted with every day, which employed thousands of people and which was vital to the country’s economy. It is, therefore, unsurprising that these later publications were designed to bring what went on within the industry to the general public in a highly accessible manner, and which showed them how they could benefit from it. It also kept the public up to date with any changes that they should be informed of. The whole nature of the publication was summed up than in the section in The Railway Magazine called ‘The Why and the Wherefore,’ in which readers could write in and ask questions about the industry. Thus, these publications reflected the public’s new interest in the railways that viewed the industry as a public service.

The magazines published about the railway industry changed over the Victorian period, but reflected the nature of the industry at the time of their establishment. They can, therefore, tell us something about how the railway industry was viewed throughout its history.