• Our booking engine at tickets.railforums.co.uk (powered by TrainSplit) helps support the running of the forum with every ticket purchase! Find out more and ask any questions/give us feedback in this thread!

How did the low number of passengers at the height of railway mania sustain the network at the time?

Status
Not open for further replies.

yorksrob

Veteran Member
Joined
6 Aug 2009
Messages
38,829
Location
Yorks
Moderator note: Split from
It seems bizarre to think that this number of passengers could have sustained an admittedly more limited network at the height of railway mania.

I guess it truly was a freight railway then !
 
Last edited by a moderator:
Sponsor Post - registered members do not see these adverts; click here to register, or click here to log in
R

RailUK Forums

DelW

Established Member
Joined
15 Jan 2015
Messages
3,835
It seems bizarre to think that this number of passengers could have sustained an admittedly more limited network at the height of railway mania.

I guess it truly was a freight railway then !
People of that era weren't used to travelling long distances or frequently - most people lived near their workplace and commuting was almost unknown. As you say, much of the early development of the network was driven by goods traffic, particularly coal.
 

Bald Rick

Veteran Member
Joined
28 Sep 2010
Messages
29,070
Three answers:

1) freight
2) fares were typically higher as a proportion of the travelling public’s disposable income
3) it didn’t sustain the Network! Lots of railway companies went bust.
 

Dr_Paul

Established Member
Joined
3 Sep 2013
Messages
1,355
Three answers:

1) freight
2) fares were typically higher as a proportion of the travelling public’s disposable income
3) it didn’t sustain the Network! Lots of railway companies went bust.

I imagine that there must have been quite a bit of cross-subsidisation taking place within companies. When one considers the amount of infrastructure for even a branch or secondary line (track, signalling, buildings, etc), the rolling stock, the staff, for fairly light freight loads and passenger numbers, many lines could never had made a penny, except perhaps at specific times (for example, harvest in agricultural areas). Pick-up goods, with a few items here, a few there, could not have been particularly profitable even when railways were the only reliable means of transportation. I imagine that with many companies regular bulk transport, especially coal, would have been set against loss-making services.

As for companies going broke, I read somewhere (I think it was the Forgotten Railways volume on East Anglia) that when practically every self-respecting town felt it necessary to have a railway connection and many set up their own company with a line connected to a major company's line, the big company would let the town pay for the building of the line, then take it over for a pittance once it went bankrupt, which many rapidly did.
 

Bevan Price

Established Member
Joined
22 Apr 2010
Messages
7,320
Moderator note: Split from
It seems bizarre to think that this number of passengers could have sustained an admittedly more limited network at the height of railway mania.

I guess it truly was a freight railway then !

Most of the earliest railways were built for freight. Until the Liverpool & Manchester Railway opened, few had even bothered about providing regular trains for passengers. And even in the railway mania, freight traffic was the main reason for wanting a railway.
 

swt_passenger

Veteran Member
Joined
7 Apr 2010
Messages
31,276
Most of the earliest railways were built for freight. Until the Liverpool & Manchester Railway opened, few had even bothered about providing regular trains for passengers. And even in the railway mania, freight traffic was the main reason for wanting a railway.
Also, the freight use must have been a high proportion of business for the numerous lines that closed to passengers early on, eg in the 1930s, but were still struggling on for goods and parcels 30 years later.
 

edwin_m

Veteran Member
Joined
21 Apr 2013
Messages
24,793
Location
Nottingham
Funding of early railways was probably a bit like investment in tech companies today. Lots of people ploughed their money into the new technology hoping to make big returns. A few people probably did by picking the moneyspinner routes between the big cities but many others lost their shirts.

A lot of the branch lines where we struggle to see how they could have made money were built for wider reasons. With the only other means of transport (other than the few places that had a navigable waterway) being the horse and cart, businesses in towns without a railway were being out-competed due to the costs of bringing materials in and product out. So the local business owners often promoted and funded a railway themselves, not really for direct commercial return but to promote continued prosperity of their other interests. This is a little like the justification for railways today, that they don't make a financial profit but promote wider economic activity.

Many of those branch lines came later in the Victorian period when the main lines were largely established, and most did indeed become the property of the main line companies, although they didn't always benefit financially from owning them. Nobody could have foreseen that within a few decades road transport would provide an alternative for that "last mile" and in a few decades more for the whole end-to-end journey.
 

Bald Rick

Veteran Member
Joined
28 Sep 2010
Messages
29,070
I imagine that there must have been quite a bit of cross-subsidisation taking place within companies. When one considers the amount of infrastructure for even a branch or secondary line (track, signalling, buildings, etc), the rolling stock, the staff, for fairly light freight loads and passenger numbers, many lines could never had made a penny, except perhaps at specific times (for example, harvest in agricultural areas). Pick-up goods, with a few items here, a few there, could not have been particularly profitable even when railways were the only reliable means of transportation. I imagine that with many companies regular bulk transport, especially coal, would have been set against loss-making services.

As for companies going broke, I read somewhere (I think it was the Forgotten Railways volume on East Anglia) that when practically every self-respecting town felt it necessary to have a railway connection and many set up their own company with a line connected to a major company's line, the big company would let the town pay for the building of the line, then take it over for a pittance once it went bankrupt, which many rapidly did.

As I’ve posted before, many were built simply to chase marginal income. Due to the success of some early railways, Government places a maximum %profit that railway companies could make, with everything above that level paid to Government. Therefore ragtehr than hand these ‘super profits’ to Government, some companies chose to spend them building lines with no conventional case, but could be used to increase the company value (to permit greater profits in future) and bring in a little more income at the margins.
 

ChiefPlanner

Established Member
Joined
6 Sep 2011
Messages
7,768
Location
Herts
Mass commuting - only really developed in London post 1870 once the Metropolitan District came feasible and operational. The likes of the Great Eastern developed North East London as a result of slum clearance in the inner areas and the need to run minimal workmens services for the displaced , which they enhanced as there was precious little other traffic around. The workers in cities until then walked to work , and often over some distances , as omnibus were for the middle classes in the start. (not cheap and limited capacity) . other places people lived on the land or near to the mill, pit or factory.

People worked much longer days - the 8 hour day came in around 1919 - so the workforce often worked 60+ hours a week , including part of Saturday. They had little time and not much spare money when generations of families were raised on about a £1 a week. All this is well documented (Booth , Rowntree etc) - trains were something they rarely used (maybe an annual excursion to Southend , Brighton or similar - and they were not always welcome there) - the gilded and monied classes were keen travellers of course - they had time and money.

Things of course changed as the 19thC moved on - but the real growth was around the Edwardian era. And beyond.
 

The Crab

Member
Joined
7 Apr 2011
Messages
212
As I’ve posted before, many were built simply to chase marginal income. Due to the success of some early railways, Government places a maximum %profit that railway companies could make, with everything above that level paid to Government. Therefore ragtehr than hand these ‘super profits’ to Government, some companies chose to spend them building lines with no conventional case, but could be used to increase the company value (to permit greater profits in future) and bring in a little more income at the margins.
I've not heard of this "Maximum profit" before. Can you provide a little more detail?
 

webbfan

Member
Joined
31 Dec 2019
Messages
54
Location
leicestershire
It seems bizarre to think that this number of passengers could have sustained an admittedly more limited network at the height of railway mania.

I guess it truly was a freight railway then !
Most of the earliest railways were built for freight. Until the Liverpool & Manchester Railway opened, few had even bothered about providing regular trains for passengers. And even in the railway mania, freight traffic was the main reason for wanting a railway.

Believe Liverpool to Manchester was around the second public railway - possibly first that only used locomotives, carried passengers from the start, as did London and Birmingham. Neither was short of passengers despite only carrying first and second class. One or two lines were freight only or passenger only - there was even the occasional director that felt it was degrading to carry freight - especially coal. One was heard to say they'll be transporting manure next - which of course they did (well sewage).
Dividend cap was about 10 per cent and only a few companies got near that and then only in first few years. By the time there was decent competition anyone getting near the limit was amongst the minority.
Not sure why you equate carrying of passengers with the mania. The first period of Railway mania was about everyone and his dog trying to put together the means to build a line. It was a right mess, there was probably more money committed than available as capital. There were some sensible proposals but there were many ill advised schemes, pure scams and proposals put forward that as soon as enough money appeared the original promoters would run.
Big companies did take over some financially failing lines but were also blackmailed into buying others, at inflated prices, that had been built or proposed as potential competitors.
 

webbfan

Member
Joined
31 Dec 2019
Messages
54
Location
leicestershire
It was typically 10%. I cant find the book now that this was in, unfortunatley.
Correct me if wrong, from memory. Not maximum profit but maximum dividends. Government were concerned that for certain routes a company had a monopoly so could charge what they liked. So a cap of about 10 percent was placed on dividends to stop profiteering in this way. It was at a time when company law was in it's infancy. Calculation of capital (and what was defined as capital), publication and format of accounts was very much a grey area and directors could do almost whatever they wanted - didn't even have to get round any rules like today. No need as there were so few.
 
Joined
7 Jan 2009
Messages
859
The laxness of rules around accounts is what allowed George Hudson to build his famous railway empire.... until it collapsed!
As Bletcheyite above says, one of the big changes over this timescale is the operations costs: the staff are better paid, the health and safety requirements much higher and the huge increase in the number and weight of trains mean that the trains must be maintained to higher standards than in the mid-Victorian period.
 

Bald Rick

Veteran Member
Joined
28 Sep 2010
Messages
29,070
Correct me if wrong, from memory. Not maximum profit but maximum dividends. Government were concerned that for certain routes a company had a monopoly so could charge what they liked. So a cap of about 10 percent was placed on dividends to stop profiteering in this way. It was at a time when company law was in it's infancy. Calculation of capital (and what was defined as capital), publication and format of accounts was very much a grey area and directors could do almost whatever they wanted - didn't even have to get round any rules like today. No need as there were so few.

Sorry yes, you’re quite right.
 
Status
Not open for further replies.

Top