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Railway Pooling in Britain before 1900: The Anglo-Scottish Traffic

Published online by Cambridge University Press:  11 June 2012

Geoffrey Channon
Geoffrey Channon
Affiliation:
Geoffrey Channon is head of the Department of Humanities at Bristol Polytechnic.
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Abstract

In this study of a neglected topic, Dr. Channon examines the attempts of British railway leaders to regulate competition among routes. Drawing illustrative material from the management of Anglo-Scottish traffic and making comparisons with the American railroad industry, Dr. Channon concludes that pooling agreements did not provide the long-term stability and savings that railway managers sought. Changes in traffic patterns led to dissatisfaction with pool allocations, and competitive pressures from outside, as well as legal and political uncertainties, undermined cconfidence in the pools. In contrast to the United States, where railroads were able to turn to consolidation after pooling had failed, in Britain this strategy was not a politically viable option.

Type
Articles
Information
Business History Review , Volume 62 , Issue 1 , Spring 1988 , pp. 74 - 92
Copyright
Copyright © The President and Fellows of Harvard College 1988

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References

1 For an excellent synthesis of a rich literature see Chandler, Alfred D. Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977), 122–87Google Scholar. Chandler draws together the research of numerous authors, notable among them Julius Grodinsky, Edward C. Kirkland, Maury Klein, Arthur M. Johnson, and Barry E. Supple, Gabriel Kolko, Paul W. MacAvoy, Albro Martin, and John F. Stover. See also Channon, Geoffrey, “A. D. Chandler's Visible Hand in Transport History: A Review Article,” Journal of Transport History, 3d ser. 2 (1981): 53–64CrossRefGoogle Scholar.

2 Important exceptions are Bagwell, Philip S., The Railway Clearing House in the British Economy, 1842-1922 (London, 1968)Google Scholar; Gourvish, Terence R., Mark Huish and the London and North Western Railway (Leicester, England, 1972)Google Scholar; and Cain, Peter J., “Railway Combination and the Government, 1900-1914,” Economic History Review 25 (1972): 623–41CrossRefGoogle Scholar.

3 Calculated from the Railway Returns. For a more detailed breakdown see Channon, Geoffrey, “The Great Western Railway under the British Railways Act of 1921,” Business History Review 55 (Summer 1981): 192CrossRefGoogle Scholar.

4 Irving, Robert J., “The Efficiency and Enterprise of British Railways, 1870-1914: An Alternative Hypothesis,” Economic History Review 31 (1978): 46–66CrossRefGoogle Scholar; Gourvish, Terence R., “The Performance of British Railway Management after 1860: The Railways of Watkins and Forbes,” Business History 20 (1978): 192–214CrossRefGoogle Scholar; and Cain, Peter J., “Private Enterprise or Public Utility? Output, Pricing and Investment on English and Welsh Railways, 1870-1914,” Journal of Transport History, 3d ser. 2 (1981): 9–23Google Scholar.

5 Marris, Robin, The Economic Theory of “Managerial” Capitalism (London, 1964)CrossRefGoogle Scholar.

6 Professor Bagwell notes that there were at least a dozen of these operating before 1914 under the auspices of the Railway Clearing House. In 1888 a General Rates conference was established as a measure of rationalization. Clearing House, 260, 262.

7 Ibid., 265-68.

8 Irving, “Efficiency and Enterprise,” 53.

9 Apart from the pools mentioned below, for example: a series of agreements in the 1850s which divided traffic between London and the north of England; a pool for Newcastle-Glasgow goods traffic (1854); and an arrangement for the division of Glasgow-Carlisle receipts (1853).

10 Inter-company meetings for the discussion of pooling and other topics, RAIL 410/718, 7 July 1886, Public Record Office, London [hereafter PRO].

11 There were exceptions. The most durable pool was probably the Humber Conference, which divided goods receipts from the traffic carried between certain places in Lancashire, including Liverpool and Manchester, and Hull and Grimsby from 1855 to 1904. See minutes of the Humber Conference, HMC 1/1, PRO.

12 For a detailed account see Channon, Geoffrey, “Pooling Agreements between the Railway Companies Involved in Anglo-Scottish Traffic, 1851-69” (Ph.D. diss., University of London, 1975), 108–14Google Scholar.

13 Ibid., 45-100, for detailed financial data.

14 The East Coast companies were admitted to Glasgow and given a sizeable share of the north of Scotland traffic.

15 The Midland was assigned to the “alternative” East Coast route (London and North Western to Rugby, via Midlands to Normanton, via North Eastern to York, via North British Railway from Berwick to Edinburgh). English and Scotch Agreement, 1 Jan. 1856, RAIL 1080/508, PRO.

16 Calculated from BR/NBR/4/226, 13 Feb. 1869, Scottish Record Office and Railway Returns. The pool's decisions affected a value of traffic as large as that of many individual companies and certainly as complex.

17 For example, Bagwell, Philip S., “The Rivalry and Working Union at the South Eastern and London, Chatham and Dover Railways,” Journal of Transport History 2 (1955-1956): 33–45Google Scholar.

18 Denison to Chandos (chairman of the London and North Western), RAIL 1008/109, 28 Jan. 1856, PRO.

19 Law Journal (1861): 823.

20 Reported in Herapath's Railway and Commercial Journal, 4 Aug. 1866.

21 Caledonian mergers: Scottish Central (1865); Scottish North Eastern (1866); North British mergers: Edinburgh, Perth and Dundee (1862); Edinburgh and Glasgow (1865).

22 In the period 1856-68 the company's capital account increased by about 4.4 times. Information on the company's performance in the old issues market is from Herapath's and Bradshaw's Shareholders Guide (to 1862), then Bradshaw's Railway Manual, Shareholders' Guide and Official Directory.

23 Channon, Geoffrey, “A Nineteenth-Century Investment Decision: The Midland Railway's London Extension,” Economic History Review 25 (Aug. 1972): 448–70CrossRefGoogle Scholar.

24 H. Lees, The North British Railway, Its Past and Future Policy (1866), 11. Lees had been a director of the Edinburgh, Perth and Dundee Railway.

25 See Channon, “Pooling Agreements,” 296-302 for a fuller account.

26 Calculated in Ibid., 334.

27 The exception was the Great Central's extension to London, which was promoted in the period of cheap money in the early 1890s and completed in 1899. Intercompany meetings …, RAIL 410/718, 27 July 1886, PRO.

28 The first Tay Bridge collapsed on 28 Dec. 1879, within two years of its opening. Its successor was opened in 1887, followed three years later by the Forth Bridge.

29 Pooling of English and Scotch Traffic, RAIL 491/360, 20 Oct. 1893, PRO.

30 For details, see Channon, “Pooling Agreements,” 314-37.

31 Minutes of English and Scotch Committee, RAIL 1080/508, 1 Nov. 1860, PRO.

32 That is, to divide customers according to their demand elasticities for transport services and to exploit in full “value-of-service” pricing.

33 Minute of English and Scotch Sub-Committee, RAIL 1080/510, 19 Feb. 1864, PKO.

34 For details see Gourvish, Mark Huish, 201-18, and Channon, “Pooling Agreements,” 223-34.

35 Armstrong, John, “The Role of Coastal Shipping in U.K. Transport: An Estimate of Comparative Traffic Movements in 1910,” Journal of Transport History, 3d ser. 8 (1987): 164–78CrossRefGoogle Scholar.

36 Channon, “Pooling Agreements,” 377-78.

37 Channon, Geoffrey, “The Aberdeenshire Beef Trade with London: A Study in Steamship and Railway Competition, 1850-69,” Transport History 2 (1969)Google Scholar; revised in Channon, “Pooling Agreements,” 378-407.

38 The only long-term cooperation involved the division of textiles and cattle receipts between the pool and the Dundee, Perth and London Shipping Company. This arrangement began in 1856 and was renewed in 1870 and 1875.

39 Minutes of Evidence of Joint Select Committee on Railway Companies Amalgamation, Parl. Papers 1872, xiii,9, 7489Google Scholar. Farrer was permanent secretary at the Board of Trade.

40 Channon, “Pooling Agreements,” 357-58.

41 For full details see Ibid., 431-32.

42 Nock, Oswald S., The Railway Race to the North (London, 1958)Google Scholar.

43 The mergers were Caledonian and Scottish Central (1865); Caledonian and Scottish North Eastern (1866).

44 Minutes of East Coast conference, RAIL 172/3, 4, 5, 6 between 1870 and 1880, PRO.

45 Calculated from a return for the year ending 31 Jan. 1882, RAIL 491/360, PRO.

46 For example, the North Eastern Railway (1854).

47 Inter-company meetings …, RAIL 410/718, 27 July 1886, PRO.

48 Ibid., 19 Oct. 1886, PRO.

49 Ibid.

50 Alderman, Geoffrey, The Railway Interest (Leicester, England, 1973), 120–26Google Scholar. The Railway and Canal Traffic Act of 1888 was the culmination of five years of attempts to revise and consolidate railway rates.

51 See Midland pooling agreements (1905), RAIL 491/776, and London and North Western pooling agreements, 1900-1925, RAIL 410/1236, PRO.

52 Cain, Peter J., “Railway Combination and the Government, 1900-1914,” Economic History Review 25 (1972): 637CrossRefGoogle Scholar.

53 For a recent account of the fate of pooling after the postwar consolidations see Butterfield, Peter, “Grouping, Pooling and Competition: The Passenger Policy of the London and North Eastern Railway, 1923-39,” Journal of Transport History, 3d ser. 7 (Sept, 1986): 21–47Google Scholar.