More on Parcels Costing - Eureka - An Answer From the Old S&D

I posited some weeks ago that by using a process of elimination, the document-deprived railway historian could use the files of more than one jointly owned railway to determine whether an operating procedure or management technique originated within one of the larger owning companies. This is possible because many of these joint railways had conferences constituted by the owning company’s officers to coordinate company operations. In the files of the larger companies who owned the joint railway, usually only the minutes of the board and board committees have survived. Thus, the officers’ conference minutes are records of the sort of decisions taken at lower levels within the joint companies that cannot usually be found within the files of the owning companies. Thus, we can be more certain in the case of joint companies of actual operational procedure, where at times these details are unavailable in the larger companies.

But, using the more readily available details of operational procedure found within multiple joint railways, can help determine operational procedures in the larger companies. It goes like this: Joint companies operating procedures will always be amalgams of the procedures used by the companies owning them. However, there will exist within the joint railways two types of operational practice. The first type of operating practices will be those common to all the owning railway companies. So, if all the owner companies get their employees to stand on one leg at 11 am each day and shout “wibble,” this will almost certainly be present within the procedures on the joint railway. However, there will also be aspects of operation that were only undertaken by a number of the railway companies that owned the joint railway. Subsequently, if an operations practice is found within the committee or conference minutes of a joint railway, that isn’t found in the main files of, say, ‘Company A,’ then either it was in line with the practice of ‘Company A’ but the evidence has not survived to show that, or, it was a practice introduced by one of the other co-owning companies and was not something ‘Company A’ did within its own operation.

But there is a way to determine which of these statements was true. This would be to look at the files of another railway company that ‘Company A’ jointly owned, followed by a comparison of the two joint railways’ operating procedures. Preferably, the second joint company would be a concern that ‘Company A’ co-owned with another company that was not involved in the other jointly owned railway. If the procedure found in the first jointly owned company is found in the files of the second, then it increases the likelihood that it did originate from the practice of ‘Company A.’ But, if it was not found in the files of the second jointly owned company, then it is more realistic to believe that it did not originate from ‘Company A.’ Thus, the presence of the procedure in the first joint company was result of it either being a local response to a problem, or that it originated from one of the other owning companies. Through this course it is, therefore, a way to determine from where procedure came. Phew…I hope you understood that.

It is with this in mind that I had some progress while at the archive today. I have written before about how the London and South Western Railway’s (L&SWR) two main jointly-owned concerns were the West London Extension Railway (WLER), which was co-owned with the London and North Western (L&NWR), Great Western (GWR) and London Brighton and South Coast Railways (LB&SCR), and the Somerset and Dorset Joint Railway (S&DJR), which they owned with the Midland Railway (MR). I have found within the WLER Officers Committee minutes evidence that it worked out in detail the costs of its cartage and delivery services from its stations, and that it altered its service based on the results of this costing. I have to confess that I was quite surprised to find this, as detailed costing of the cartage and delivery services was something I’d never seen on any other railway; certainly I hadn’t seen it on the L&SWR. However, when I initially found evidence of this costing on the WLER there was no evidence to say within the L&SWR files (or elsewhere) that it didn’t originate from practice on the L&SWR. This was because lvast swathes of its company’s files had been lost, including the Officers Committee Minute books (and if you find them, let me know).

However, while at the archive earlier I thought I’d use the method above to see if I could come closer to the answer as to whether the costing on the WLER came from the L&SWR. Thus, I dipped into the files of the S&DJR to see if parcels and delivery costing turned up in its officers’ committee minute book. Alas, in 6 years of officers’ committee minutes between 1875 and 1881 it was not found. Therefore, parcels and Delivery costing was not a common practice on the WLER and the S&DJR, and thus, it is unlikely that it was undertaken within the operations of their common owner, the L&SWR. Subsequently, this increases by a large degree the chances that the delivery costing found on the WLER was either introduced to that railway by one of the L&SWR’s co-owners, or that it was a local response to circumstances surrounding the WLER. I may be wrong, of course, but the chances are very high.

1 Railway + 1 Railway = Answers

The things that I don’t know about my chosen railway, The London and South Western Railway, could fill endless journals. I have talked on a few occasions about the fact that I feel that there could be vast swathes of material sitting in draws that could answer the many mysteries about the operation of Britain’s railways. In fact, I am convinced that if everyone who had a collection of documents committed them to archives then we could learn vast amount. But hey, I can wish. It’ll never happen. As I have found, some individuals that own documents are very possessive about sharing, staunchly guarding what they consider to be their documents. Yes, the document may be theirs in a technical sense, but the information is not. Anyway I digress.

I think, however, that I have found a way to uncover more details about the operations of my chosen company. The L&SWR had joint ownership of a number of railways in its sphere of influence. The two most notable were the Somerset and Dorset Joint Railway (S&DJR) and the West London Extension Railway (WLER). It owned the first with the Midland Railway, and the second with the London North Western, London Brighton and South Coast and Great Western Railways. Thus, in both these cases the L&SWR would have had to merge their operational procedures with their co-owners of the railways for smooth operations. Some of these operational systems would have been the same and integration and combination would not have been a problem. This was the result of being in an industry where there was very little influence from external businesses and much inter-company communication through the Railway Clearing House. But, there would have been some areas where the companies operating procedures may have diverged and as such the owners would have had to reach compromises.

Subsequently, examining the operation of the jointly owned companies may show the process of negotiation each of the owning companies engaged in, thus revealing each’s operating procedures. This would, therefore, go some way to uncovering some of the mysteries about how the L&SWR and other owner companies operated their railways and made decisions. Up to this point, I have done some research on the West London Extension Railway and while I didn’t find any details of any inter-company negotiation regarding operations, I did find some very interesting (well for me anyway) information on how the WLER costed their parcels service. This data was found in the Minute Books of a conference that consisted of all the different companies’ officers. I won’t go into it here as I did write a blog entry about it a few months back.

There was one problem with this information, in that I couldn’t be sure from where the decision to cost the parcels service came from. I have found no information that it was done within the L&SWR, but this is may be because little information has survived below committee and board level. Indeed, if this was something that was discussed amongst the company’s officers, and not at board or committee level, then the information has been lost. Conversely, it may be that the L&SWR didn’t do parcels costing and, therefore, the procedure came from one of the other companies.

Up until the brainwave I will now describe, I was resigned to never knowing the answer. But, I had a thought. The Somerset and Dorset Joint Railway also had a committee of officers that would have been made up of officials from the S&DJR, Midland and L&SWR. The common co-owner of the WLER and the S&DJR was the L&SWR. If I fail to find an explicit series of negotiations over policy within the S&DJR files, and I do find within the S&DJR officers committee details of parcels costing, in addition to the fact that I have already found it on the WLER, then this increases the likelihood that the L&SWR undertook it within its own network because it is a common policy (or that this was a standard procedure within British railways).

Now, I realise that this is not a full proof method for discovering those operational details that have eluded railway historians, but it may be a way of at least determining the likelihood that some operational systems were used by different railway companies in the Victorian period where explicit information does not survive within the companies’ own files. The shame for me is that the L&SWR didn’t jointly own many more companies. If I were to increase my survey to look for operational details within three or four railways, this would inevitably increase the chances of finding common policies, increasing the certainty that they were either used, or originated within, the parent company. However, for companies that jointly owned a multitude of companies, it may work to more accurately determine operational procedures.

Parcels Costing on the West London Extension Railway (Let's Go Wild)

Now I won't bore you with a long history of the West London Extension Railway (WLER). Simply put it, was built, owned and operated by four railway companies, the Great Western Railway (GWR), London & North Western Railway (L&NWR), London, Brighton and South Coast Railway (LB&SCR) and my own, beloved, London and South Western Railway (L&SWR). It ran from Clapham Junction to Kensington (now Kensington Olympia) where it connected with the L&NWR and GWR's West London Railway and opened on the 2^nd March 1863. Therefore, it can only be considered a fill-in company of little significance in the grand history of Britain's railways. However, with the South Western's involvement it did peak my interest. What, I mused, could the WLER's company files tell me about how the South Western's management? And so, I spent a day photographing the WLER company's files at the National Archives. Sometimes research doesn't go as planned and in the end I found very little of use. But, what I did find regarding the company itself was of more general interest to me (and others). I may not be able to use the information in my PhD, but it is worth relating the findings, small as they are, as they may be of a more general interest.

Ok, don't go to sleep, but it is all a matter of cost accounting. In layman's terms we don't know a great deal about how the Victorian railway companies made small everyday decisions. Large-scale decisions, those involving large capital investment, are broadly understood. When the railway companies built an engine shed, constructed a new type of locomotive or remodelled a station we roughly know why they did because of the large-scale nature of these projects. The rationale behind them are there to be seen in blaring neon lights. But then the history of Britain's Railways isn't made up solely of large decisions made by the directors and managers, it is made up of a mix of the big and the small. In fact one of the goals of my PhD is to try and create links between corporate thinking on the 'big' and the 'small' decisions and how both were formulated. Anyone wishing me luck?...I hope so. The way that small decisions were made is a very large mystery that noone has really approached up to this point because of a lack of information.

Further to this, the actual statistics railway companies used to inform decisions are also a bit illusive. We know that Locomotive Departments used a range of measures to monitor cost such as Locomotive Miles (the cost of locomotive operation divided by miles run by the locomotives), Carriage Miles (same as before but for carriages) and Wagon Miles (well, you get the gist). Yet, except in special cases (such as Terry Gourvish's study of Mark Huish's innovations on the L&NWR in measuring the cost of moving one ton or passenger, one mile) there is significant uncertainty as to how the non-Locomotive departments within most railway companies costed their operations. Indeed, in the case of the L&SWR the most I have found with regard to cost accounting (under which falls all figures such as ton mile) in the Traffic department was the cost of feeding horses in 1887 using the 'fodder per horse' measure. No doubt the horses were happy, but I am not.

It was therefore with some sense of wonder that I came across one decision on the WLER regarding parcels delivery using a completely a type of costing that I hadn't seen before. When the line was opened the board of the WLER formed an officers committee which was made up of the chief officers of the four companies that owned the company, as well as the superintendent of the line. The minute books of this committee are joyful files on two counts. Firstly, most minutes of railway companies' officers' committees have been lost as these committees did not discuss the 'higher matters' of company operation. This means that a lot of information on the day-to-day running of railway companies in the Victorian period has been lost. Secondly, the document is printed and for any pre-1900 historian (of any subject) not dealing with the handwriting of a possibly cranky or tired clerk is always a dream. Anyway, I digress.

From 1863 when the line opened the company collected costing data on the parcels delivery service at Kensington station. Indeed, as far as I can tell this all they collected costing data on. Why, I hear you ask? Well, I'm not precisely sure, but I will suggest a number of points that may explain things. Firstly, while costing data on parcels services hasn't been shown up in research on any other railways yet, this may suggest that the four companies involved may have actually collected this form of data and the only fact that I have found them in the case of the WLER is that the minutes of the officer's committee survived. However, a counter-argument may be that it was because the service was administered by the four companies that they felt it needed to be monitored more closely so that the expenditure incurred could apportioned to each company more accurately. While both positions have their merits, I will go with the former. This is because the costing that they worked out, the cost of delivery per parcel' was for the whole service. They did not divide the data up between the four companies, i.e. the cost of delivering a GWR parcel, the cost of delivering a LB&SC parcel and so on. Therefore, the evidence suggests that all the companies involved may have engaged in this type of costing and applied it to the management of the WLER. This, believe it or not, is possibly an important finding (everybody dance now).

So where did they apply this costing to decision making? On the 4^th January 1864 the company set up the delivery arrangements for parcels at Kensington station. The rule they applied to the service was that any delivery that was within a mile of the station would be free, where as any delivery over that distance would be charged (at a rate I have yet to find yet). Initially there were three deliveries daily to the local area. In working out how the cost of operating the service would be apportioned between the four companies the company firstly credited the delivery account with the revenue generated. Then the companies each paid a portion of the cost dependent on what percentage of the parcels had originated on each of their networks.¹ It was after this that the company worked out two cost measures, the gross cost of delivery per parcel (total cost of delivery service divided by the number of parcels) and the net cost per parcel (the cost of delivery after revenue had been factored in, divided by the number of parcels delivered). These figures were presented every half year to the committee. The gross and net cost of delivery are presented below for the period between the December 1864 and December 1870 half years. Please click on the picture to blow it up and get a better look.

Clearly, the cost was rising up until December 1867, but after that point the cost dropped to levels far below any cost before it. So what changed? At the March 1867 meeting of the Officers Committee the December 1866 figures were presented and 'attention was called to the Gross charge of 4 ½d per parcel being very high.'² But, no action was taken at this point. However, roughly one year later at the February 1867 meeting, the costs were presented and they had risen even more sharply. The officers requested that the Superintendent of the Line, Mr Grew, investigate whether the delivery agents, Messrs Horne and Chaplin, would 'reduce their charges if only two deliveries were made daily, instead of three; and if satisfactory terms are offered, to then make only the two deliveries.'³ The new proposal was agreed to by Horne and Chaplin and the two deliveries saved the company 20s a week (or approximately £52 per year.)⁴ This started on the 1^st of April and while 'it was apprehended that many complaints would be made...after the first few days, they entirely ceased.⁵ As such the cost of delivery dropped significantly.

A number of observations should be made about this service. A report for the officers committee written by Grew after the service had started on the 4^th of April 1864 noted that 'the number of parcels sent for delivery is increasing, but at present the receipts from them will not cover the expenses.'⁶ Indeed, the parcels delivery service never made any profit throughout its observed history. Despite revenue increasing, between the December 1864 and December 1870 half years it never made up more than two thirds of the costs that the four companies had to pay. Therefore, why did they continue the service?

I would suggest that even at this early stage of railway development there was an expectation that the company would provide a parcels delivery service in a certain way, and that the WLER was conforming to established industry paradigms. This assertion is confirmed by the actions that the company took, or did not take, in response to the figures presented of the cost of delivery per parcel and the overall cost of the service. Firstly, they did not change the charging structure for deliveries. For example they did not remove the 'free' service and consider charging for all deliveries irrespective of distance. Secondly, they did not cancel the service when it was not profitable. Thirdly, they made the simplest change possible by reducing the number of deliveries, doing nothing to radically alter the way they operated the delivery service. Fourthly, they did not change, as far as I am aware, the rates or those deliveries they charging for, a factor possibly influenced by charges agreed to by the different companies individually or through the Railway Clearing House (RCH). Lastly, they noted the public response to the changes that they made and were worried about the reaction. Therefore, the WLER's controlling officers, seem to have been constrained within pre-existing industry ways of working and the expectation that they would offer a parcels delivery service.

Therefore, while this blog entry has only focussed on one station, within one small company, it does suggest a number of interesting points. It has shown that more detailed costing of railway operations was being used within the industry to make decisions on company activities. However, these decisions were constrained by what were considered industry norms that were conditioned by the expectations that the public possibly had regarding the services that they would receive from a railway company. This also may suggest (exceedingly tentatively) that many of the problems of railway company profitability in the late 19^th century that has been discussed by historians (Gourvish, Leunig, Aldcrodt et.al.) may have been in part caused by those companies that were established later conforming to 'industry norms.' This may have in turn re-enforced these norms within the older companies who couldn't make radical changes to their services as the industry was built up around them. I can't however assert these last points on this data alone at all, but I hope with further research to discuss these issues in more detail in the future.

Vastly more research needs to be done on these WLER papers and I hope that you have enjoyed this delve into the more academic side of my work. Oh and another thing – I am not in any way studying the WLER, I looked at them for fun and interest. Sometimes I wonder about my life...nah, I kinda like it.

REFERENCES

1The National Archives [TNA], RAIL 731/11, West London Extension Railway Company: Records, Principal Officers' Minutes (printed), Minute No. 20, 7^th December 1863, Minute No. 28, 4^th January 1864 and Minute No. 36, 1^st February 1864.

2TNA, RAIL 731/11, West London Extension Railway Company: Records, Principal Officers' Minutes (printed), Minute No. 412, 7^th March 1867

3TNA, RAIL 731/11, West London Extension Railway Company: Records, Principal Officers' Minutes (printed), Minute No. 509, 10^th February 1868

4TNA, RAIL 731/11, West London Extension Railway Company: Records, Principal Officers' Minutes (printed), Minute No. 525, 26^th May 1868

5TNA, RAIL 731/11, West London Extension Railway Company: Records, Principal Officers' Minutes (printed), Minute No. 547, 6^th July 1868

6TNA, RAIL 731/11, West London Extension Railway Company: Records, Principal Officers' Minutes (printed), Report written by Superintendent Grew to the Principal Officers, 4^th April 1864.