by Charles Loft
Much of the rail network in 1938 consisted of lines that had completely failed to fulfil the hopes of those who financed them. The Clayton West branch, which survived until 1983 due to the difficulty of operating a replacement bus service, earned annual receipts of £1,811 in 1881, against expenses of £2,500. The bitter competition between the South Eastern and London, Chatham and Dover companies ruined both shareholders and services alike. When the Manchester, Sheffield and Lincolnshire company, whose initials were jokingly said to stand for ‘Money Sunk and Lost’, built an extension to London and renamed itself the Great Central, the wags justifiably re-dubbed it ‘Gone Completely’. The ‘railway king’, George Hudson, central figure in the ‘railway mania’ investment boom of the 1840s, built a railway empire that exceeded a thousand miles and shaped the network permanently on imaginary profits and false promises that ruined many an investor as well as himself.
Railways had never been guaranteed financial successes, but in the inter-war years no one was making much money from them. The assumption that earnings would return to pre-war levels, on which the Southern, LNER, LMS and GWR had been created from a host of smaller companies in 1921, proved to be wrong and, although the industry was by no means bankrupt, earnings on ordinary stocks ranged from little to nothing. The LNER paid nothing on its deferred stock after 1925 and even preferential stockholders could not always count on a return. In 1938, ordinary shareholders of three of the big four received no dividend while those of the fourth got half of 1 per cent. These results prevented the companies raising investment capital on the stock market, resulting in a net disinvestment of £125 million between 1920 and 1938. What investment did take place (including the Southern Railway’s major programme of electrification) had been largely dependent on government incentives, such as grants to cover interest payments, since 1929.
While the causes of the industry’s financial performance between the wars should not be oversimplified (and a major factor was a decline in heavy-freight traffic, especially coal, which was caused by general economic conditions), both the railway network and the legal framework in which it operated reflected the virtual monopoly of inland transport the railways had enjoyed prior to 1914. Not only the number of lines, but the number of competing separate networks, the short distances between stations and the complex framework of regulations protecting passengers and businesses from ruthless exploitation by the railways’ monopoly made less and less sense once significant numbers of buses and lorries existed to rival the stopping train and the pick-up goods. When a small consignment of merchandise needed to be taken to or collected from a railway siding by lorry, the greater convenience of simply taking it to its final destination in one road journey was fairly obvious. The First World War kick-started the road haulage industry, as the government ordered large numbers of lorries for use on the Western Front and at the end of the war sold them off at a time when large numbers of men who had been trained to use them needed work and possessed demobilisation grants with which to purchase vehicles. Railway freight charges were governed by regulations that required the approval of charges schemes by the Railway Rates Tribunal and obliged them to carry any traffic offered, to provide a reasonable level of service, to publish charges and not to give undue preference to one customer over another. One consequence of these regulations was that railway charges bore little relation to the cost of specific services; another was that, as hauliers could pick and choose traffic and quote whatever price they liked to individual customers, it was a simple enough matter for them to undercut the published railway rate for a job by enough to win the traffic. General merchandise traffic fell by more than a quarter between 1924 and 1937, largely as a result of transfers to road.
Just as a certain class of freight traffic was almost inevitably lost to road, so buses proved devastating rivals to rural railway services that were not particularly fast and served stations that were often inconveniently sited (by 1950, branch line operating costs were 25d per passenger mile against 2d for a bus). Peter Butterfield’s study of the north-east shows that, between 1921 and 1925, rail receipts for journeys under ten miles declined by a quarter; 1926–7 saw an even greater expansion of bus services and a parallel fall in rail passengers and, at some stations, traffic had fallen to less than 10 per cent of its pre-1914 level by 1929. Service improvements sometimes helped restore it, but not by enough in the long term to justify the additional cost. Attempts to win back traffic by lowering fares produced mixed results. It was not only branch lines that suffered, but wayside stations on the main line like Little Bytham (although it was not until the withdrawal of all local trains between Peterborough and Grantham in 1959 that Little Bytham closed). By 1938, 50 per cent of passenger revenue in the LNER’s north-eastern area was being earned by just seven stations while 53 per cent of stations earned just 2 per cent of revenue – an imbalance that persisted into the 1960s and not just in the north-east. The rise of road transport has been estimated to have cost the railways as many as 300 million passenger journeys a year by 1937. While total land passenger journeys increased by nearly half between 1920 and 1938, rail passenger traffic increased only slightly and this was more than offset by a decline in earnings per passenger mile as the railways cut fares to compete.
In the face of this onslaught the big four argued for greater restrictions on road transport and fewer on rail. In 1928, they won the right to expand into passenger road transport and to establish a royal commission, the findings of which led to the imposition of a licensing system on bus operators. In 1932, further lobbying saw the establishment of the Salter Conference on transport, which led to legislation increasing the railway’s commercial freedom (a little) and imposing a licensing scheme on road hauliers. Both licensing schemes involved an examination of the need for a service and the existence of alternatives – including rail – before a new licence was granted. But if these Acts restricted road transport, they did not solve the railway companies’ difficulties, and in 1938 they launched a new ‘Square Deal’ campaign for increased commercial freedom. Although the government accepted their case, legislation had not been passed by the outbreak of war. By the late 1930s the railways’ general merchandise and short-distance rural passenger traffic had no real commercial future unless some overriding reason could be found for eliminating road competition. This was precisely what happened when Britain went to war: petrol was rationed and the railways were busier than ever before.
The author of Railways To-day, published in 1938 as part of a series entitled Pageant of Progress, introduced his subject with the observation that ‘we are so accustomed in these days to take railways as a matter of course, like the hills, that it may be a surprise to some of us to be reminded that, until a little over a century ago, railways were not in existence as public carriers’.31 The idea that railways might not be as permanent as the hills was equally surprising. When, a few months before the Mallard’s run, Douglas Macdonald Hastings of the Evening News stumbled across the deserted Singleton station in Sussex, which had lost its passenger service three years earlier and was now available to let, he gave his readers an account of his exploration of this strange phenomenon, ‘too incredible for invention’. Singleton station was quite an extensive affair, as it was the station for Goodwood racecourse and had been built with both the capacity and style to accommodate Goodwood’s well-heeled clientele (the patterned glass was still in the windows of the goods shed in 1981, when the platforms were being used as a scrapyard). There was a carpet of leaves in the booking hall and the ticket office hatch closed with a ‘ghostly bang’. A generation ahead of the preservation movement, he concluded that he might take the lease:
I wanted to play with it. I wanted to fill the racks in the booking office with bright green tickets and stamp them with a date stamp… I had even made up my mind to buy a second-hand train so that I could drive it and shunt it in and out of my station with clouds of steam and blasts on the whistle.32
By 1938 some railwaymen appreciated that
the ‘small wayside station has in most cases outlived its usefulness’,33 and in Britain, as elsewhere, the rail network had begun to contract. The LNER withdrew passenger services from thirty branch lines and closed two others outright in 1930–34, generally blaming bus competition for rendering the services unsustainable. In 1929, a deputation from Allendale, where it was rumoured that the branch service from Hexham was to be withdrawn, lobbied the railway’s passenger manager for its retention. But this level of protest was rare and the company gave it short shrift. Passenger numbers had collapsed in the previous six years and the deputation was told that, unless they picked up, no assurance could be given about the future. The decline continued and the service was withdrawn in 1930. The LNER was not alone in closing lines: in the summer of 1937 Gainsborough pictures took over Cliddesden station on the recently closed Basingstoke and Alton line to film Will Hay’s classic railway comedy Oh, Mr Porter!, and across the country the 1930s saw the final passenger services leave Devil’s Dyke, Loch Tay, Knott End, Ditton Priors and Durham Elvet among many others. Even London Transport drew in the Metropolitan Line’s horns from Brill and Verney Junction. Dolphinton could consider itself particularly unfortunate to lose two lines. Some 1,200 miles of route were closed to passengers between 1923 and 1938, three quarters of them in just five years from 1929, without significant protest, so low was their usage. Nevertheless, by 1934 the LNER had concluded that ‘there are probably not many cases left where the company will benefit by cancelling services’.34
In the early 1930s, the LNER also investigated the possibility of fighting fire with fire by turning two of its branch lines into private roads, along which it would run its own bus and haulage services. The Wivenhoe–Brightlingsea line served a small resort near Colchester, with a healthy summer traffic, not too much bus competition and a route far enough from any road to offer the possibility of charging tolls for cars to use it after conversion. The Mid-Suffolk Light Railway between Haughley and Laxfield was a very rural affair which – being the remnant of a grander, unfinished, plan – didn’t really go anywhere and had suffered from the depression in agriculture and the rise of the bus. But any hope the LNER had of road conversion as a business proposition stumbled at the first hurdle. In both cases the junction stations made little sense as freight railheads; it would be simpler and cheaper to distribute freight from Colchester or Ipswich. The cost would also be prohibitive, particularly on the Mid-Suffolk, where it was estimated at over £200,000. Single-track railways would need significant widening for use as a road, which meant converting even minor cuttings and embankments would entail significant expense. Road maintenance and operating costs did not seem attractive either, although in the case of Brightlingsea this partially reflected the LNER’s determination to cater for even the highest peak of summer traffic, requiring nineteen 52-seater buses, whereas only three were needed in winter. It would be another thirty years before the railway abandoned high peak summer traffic as fundamentally unprofitable.
By the time the LNER attempted to tackle the inter-war decline in rural passenger traffic by replacing its rails with a road, the tiny independent group of railways controlled by Colonel H. F. Stephens had already tried – and failed – to solve the problem by replacing trains with a bus on rails. A world away from the glamour of the east and west coast expresses, Holman Fred Stephens exemplified the eccentricity the English like to believe is a national characteristic. His clipped moustache and military title – acquired in the Territorial Royal Engineers – belied his background as the son of one pre-Raphaelite artist, named after another. Having qualified as a civil engineer and worked briefly for the Metropolitan Railway, at the age of twenty-two he oversaw the construction of the South Eastern Railway’s Hawkhurst branch on the Kent–Sussex border and by the turn of the century had set himself up in a small office in Tonbridge from where he built a Heath Robinson empire of rural railways with such names as the Hundred of Manhood and Selsey Tramway, the Shropshire and Montgomeryshire Light and the Welsh Highland. Typified by their tendency to connect ‘places with little demand for transport via country with none at all’,35 using worn out second- or third-hand equipment, the locomotives often saddled with the names of Greek gods, Stephens’s lines pioneered the art of running railways on a shoestring. His work was his life; he lived in hotels and clubs and visited at least one of his projects in a lorry to which flanged wheels could be fitted, enabling him to inspect those parts of the line too remote to be reached by road. Early aficionados of railway whimsy were attracted by his practice of retiring broken-down or unwanted stock, most of which had been relatively ancient when purchased, to some corner of an overgrown yard deep in the sleeping countryside, just in case part of it came in handy. The 1896 Light Railways Act eased many of the regulations governing railway construction in return for imposing speed and weight limits (it is this Act which allowed preservationists to begin reopening lines in the 1960s). The Act helped Stephens to engineer most of the lines he controlled (and others) cheaply, avoiding major works in favour of harsher gradients and numerous level crossings. On one of the rare occasions he had to build a tunnel – on the East Kent Light Railway – he built it to take double track in the hope of future expansion, but cut costs by only excavating enough chalk inside the tunnel to allow for one line.
Economy of construction was increasingly matched by economy of operation as Stephens responded to bus competition. The Light Railways Act had been passed specifically to help the rural economy by opening up areas to railway development that would never support conventionally engineered lines; unfortunately, within a quarter of a century of its passing, the prospects of such lines had taken a significant downturn thanks to the bus and the lorry. Stephens’s lines were particularly vulnerable, operating as they did on routes that were often paralleled by roads but with inconveniently sited stations. His best-known innovation was the introduction of petrol railmotors: two lorry chassis fitted with flanged wheels and specially made bus-type bodies coupled back to back, which was cheaper than having a reverse gear.36 These were first introduced on the Kent and East Sussex Railway (K&ESR), which ran between Headcorn on the Tonbridge–Dover line and Robertsbridge on the Tonbridge–Hastings line, via Tenterden. Passenger numbers had fallen by over a third between 1913 and 1922 when the new machines arrived, cutting costs and providing a more intensive service that led to a temporary stabilisation in traffic. But while the railmotors slowed the descent towards bankruptcy (and inspired similar efforts elsewhere), they could not prevent it. The fact that they were not always able to cope with the gradients, could not pull freight and provided an uncomfortable and sometimes fume-filled journey didn’t help, and by 1926 the K&ESR was in the red. When, in 1930, the directors sought advice from Sir Herbert Walker, chairman of the Southern Railway, he told them the position seemed hopeless:
There is absolutely no chance whatever of being able to effect sufficient economies to enable the line to be run at a profit and even if the line were closed down for passenger traffic and worked only as a goods line it is very doubtful whether the receipts would more than cover working expenses.37
By this time passenger numbers were around two-fifths of the 1913 figure. Results elsewhere on Stephens’s lines in 1930 were no better. On the Shropshire and Montgomeryshire, passengers were nearly 80 per cent down on 1923, the Ffestiniog had ceased carrying them altogether except in summer and the East Kent had already abandoned passenger services on its Sandwich extension – a line of which the railway’s historian writes ‘its future had looked bleak ever since its opening’.38 In 1931 Stephens succumbed to a series of strokes. The strain of it all may have been a factor, but he never lost the determination and optimism that made him something of a model for the preservationists who have rescued some of his lines and many others. When he fell ill he was still working on plans for a new electric suburban light railway south of Croydon and ballast had been laid on further extensions of the ever-optimistic East Kent.
Stephens’s as
sistant of some forty years, William Austen, took over the business and while some lines closed and others went into receivership, remarkably the K&ESR and the East Kent were open to passengers when the railways were nationalised, as was the Sheppey Light Railway in north Kent, which Stephens had engineered but never owned. All three lines would soon come under the scrutiny of the newly formed Railway Executive of the British Transport Commission (BTC), as the nationalised behemoth pursued the 1947 Transport Act’s dream of ‘an efficient, adequate, economical and properly integrated’ national multi-modal transport system ‘to provide most effectively and conveniently for the needs of the public, agriculture, commerce and industry’.
With well over 600,000 employees and assets which included trams, buses, lorries, canals, docks, hotels, depots, offices, a travel agents and a film company, the BTC typified the vast public corporations that ran much of Britain by the end of the 1940s. The nation may have been on the winning side in the Second World War but the spoils of victory were freedom and survival, not prosperity. Facing levels of austerity that make the modern use of the term ring hollow, with petrol and many foodstuffs still rationed in 1949 and cities disfigured by bomb sites, the central control and communal enterprise that had secured Britain’s survival were now expected to make good its future. Along with the British Electricity Authority, National Coal Board, the NHS and the planned Iron and Steel Corporation, the BTC was brought into being by the Labour government elected by a landslide in a general election sandwiched between the defeats of Germany and Japan in 1945. These centralised, nationalised near-monopolies joined the General Post Office, the BBC and state-owned airlines in a centrally planned economy. It is hard to imagine anything more different to the network Colonel Stephens had run from Tonbridge, but in its death throes, the remnants of Stephens’s empire hinted at the difficulties the new railway order would face in the 1950s.
