Railway history comprises the railways of the world from the early nineteenth century in Britain to the present day. Cheap efficient land transportation was an essential need of the industrial revolution, as existing road transportation by wagon was too slow and expensive. Although English shippers had experimented with man-made canals from the middle of the eighteenth century, they were expensive to build and maintain, still slow as mule-drawn boats moved at only three miles an hour, and using steam power was impractical. But in fact they provided the main competition with railroads until well into the 1840s, in both England and the United States. With its extensive river system, the United States supported a large array of steamboats that effectively competed with railroads after 1815 until the 1870s. The canals and steamboats lost out because of the dramatic increases in efficiency of the railroads, in terms of speed, scheduling, and costs per ton-mile. In Germany, on the other hand, parts of its well-integrated system of rivers and canals remained competitive into the early twenty-first century.
- 1 Nineteenth century
- 1.1 Britain
- 1.2 British Empire
- 1.3 United States
- 1.4 Europe
- 1.5 Asia
- 1.6 Economic impact
- 2 Twentieth Century
- 3 Bibliography
- 4 Labor issues
- 5 External Links
Railroads originated in England, which had created an elaborate system of canals and roadways to haul coal for the new steam engines, making possible the Industrial Revolution. The engineers and businessmen needed to create and finance a railway system were also available. The first high pressure steam engine locomotive was developed by Richard Trevithick in 1802; a locomotive using smooth wheels on an iron track could pull cars of freight a few hundred yards. In 1815, George Stephenson built the prototype of the modern steam locomotive, starting a technological race over the next century to build locomotives with more power at higher steam pressures. Stephenson himself was one of the major innovators. His decisive breakthrough came in 1825 when he built the Stockton and Darlington line, 12 miles long, that proved it was commercially feasible to have a system of usable length. On his first run, his locomotive pulled 38 freight and passenger cars at speeds as high as 12 miles per hour. Stephenson’s “Rocket” was the locomotive for the Liverpool and Manchester line, which opened in 1830. Stephenson went on to design many more railways, and is best known for standardizing designs, such as the “standard” gauge of rail spacing, at 4 feet 8 ½ inches. Thomas Brassey was even more prominent, operating construction crews that at one point in the 1840s totaled 75,000 men throughout Europe, the British Empire, and Latin America. He and thousands of British engineers and crews went all over the world to build new lines.
British engineers invented and improved thousands of mechanical devices, and developed the science of civil engineering to build roadways, tunnels and bridges. The telegraph, although invented and developed separately, proved essential for the internal communications of the railways because it allowed a central control station to track all the trains in the system, shifting slower trains to a siding while a fast train went by, warning of hazards, and sending out orders to fix or work around troubles. Most important for efficiency, the telegraph allowed a system to use a single track for two-way traffic.
Britain had a superior financial system based in London that funded both the railways in Britain and also in many other parts of the world, including the United States, up until 1914. The boom years were 1836 and 1845-47, when Parliament authorized 8,000 miles of lines at a projected cost of £200 million, which was about the same value as the country’s annual Gross Domestic Product (GDP) at that time. A new railway needed a charter, which typically cost over £200,000 (about $1 million) to obtain from Parliament, but opposition could effectively prevent its construction. The canal companies, unable or unwilling to upgrade their facilities to compete with railways, used political power to try to stop them. The railways responded by purchasing about a fourth of the canal system, in part to get the right of way, and in part to buy off critics. Once a charter was obtained, there was little government regulation, as laissez faire and private ownership had become accepted practices. The railways largely had exclusive territory, but given the compact size of Britain, this meant that two or more competing lines could connect major cities.
Isambard Kingdom Brunel (1806–1859) designed the first major railway, the Great Western Railway, built originally in the 1830s to cover the 100 miles from London to Bristol. After Brunel turned to steamships George Hudson (1800-71) became the most important railway promoter of his time. The “railway king” of Britain, Hudson amalgamated numerous short lines and set up a “Clearing House” in 1842 which rationalized the service by providing uniform paperwork and standardized methods for transferring passengers and freight between lines, and loaning out freight cars. He had a particular aptitude for visualizing and arranging spectacular company and line amalgamations and his activities helped to bring about the beginnings of a more modern railway network. In 1849 he exercised effective control over nearly 30% of the rail track then operating in the United Kingdom, most of it owned by four railway groups, the Eastern Counties Railway, the Midland, the York, Newcastle and Berwick, and the York and North Midland, before a series of scandalous revelations forced him out of office. The economic, railway, and accounting literatures have treated Hudson as an important figure in railway history, although concentrating largely on the financial reporting malpractices of the Eastern Counties Railway, while Hudson was its chairman, which were incorporated into the influential Monteagle Committee Report of 1849.
By 1850, rates had fallen to a penny a ton mile for coal, at speeds of up to fifty miles an hour. Thus, Britain had a well integrated, well engineered system that allowed fast, cheap movement of freight and people. The system directly or indirectly employed tens of thousands of engineers, mechanics, repairmen and technicians, bringing a new level of technical sophistication that could be applied to many other industries, and helping many small and large businesses to expand their role in the industrial revolution. Thus railroads had a tremendous impact on industrialization. By lowering transportation costs, they reduced costs for all industries moving supplies and finished goods, and they increased demand for the production of all the inputs needed for the railroad system itself. By 1880, there were 13,500 locomotives which each carried 97,800 passengers a year, or 31,500 tons of freight.
Leunig (2006) assesses train speeds in England and Wales during 1843-1912. Trains were fast compared with coaches or walking, and the social saving of time saved grew over time to become over 10% of national income in 1912. Including fare savings, social savings were 14% of national income in 1912, with consumer surplus of 6%. Time savings dominated fare savings once railways became a new good: travel for the masses. Using the social savings-total factor productivity identity, the article shows that railways accounted for around a sixth of economy-wide productivity growth in this era.
Howlett (2004) explores an important labor market development toward the end of the 19th century, the rise of the internal labor market. Railway companies were pioneers in this area, and in 1904 comprised all 10 of the largest enterprises in Britain. Howlett presents an analysis of the career histories of 848 traffic staff workers of the Great Eastern Railway Company. This large longitudinal sample provides the first detailed account of the internal labor dynamics of a pre-1914 railway company, providing a unique insight into an early internal labor market. Union membership was quite low before World War I. There was a clearly structured market for unskilled entrants, that promotion and demotion were an important managerial tool, and that there was a significant wage premium for promotion.
Nationalization and Privatization
Bagwell (2004) shows the Railway Bill of February 1993 privatized the railways. Railtrack was responsible for the infrastructure; passenger services were provided by (initially) 25 operating companies, while goods services were concentrated in three companies, eventually EWS (English Welsh and Scottish Railway Ltd). The records and experiences of travelers reveal that punctuality and reliability, i.e., the likelihood of timetabled services running at all, deteriorated. Passengers' complaints increased in number. Under British Rail, before 1993, much engineering work was done "in house." Contracting it out was detrimental to good overall management and contributed to low morale among passengers and staff alike. Secretary of State for Transport Stephen Byers's decision in October 2001 to put Railtrack under administration is explained.
In Canada, the national government strongly supported railway construction for political goals. First it wanted to knit the far-flung provinces together, and second, it wanted to maximize trade inside Canada and minimize trade with the United States, to avoid becoming an economic satellite. The Grand Trunk Railway of Canada linked Toronto and Montreal in 1853, then opened a line to Portland Maine (which was ice-free), and lines to Michigan and Chicago. By 1870 it was the longest railway in the world. The Intercolonial line, finished in 1876, linked the Maritimes to Quebec and Ontario, tying them to the new Confederation.
Anglo-entrepreneurs in Montreal sought direct lines into the U.S. and shunned connections with the Maritimes, with a goal of competing with American railroad lines heading west to the Pacific. Joseph Howe, Charles Tupper, and other Nova Scotia leaders used the rhetoric of a "civilizing mission" centered on their British heritage, because Atlantic-centered railway projects promised to make Halifax the eastern terminus of an intercolonial railway system tied to London. Leonard Tilley, New Brunswick's most ardent railway promoter, championed the cause of "economic progress," stressing that Atlantic Canadians needed to pursue the most cost-effective transportation connections possible if they wanted to expand their influence beyond local markets. Advocating an intercolonial connection to Canada, and a western extension into larger American markets in Maine and beyond, New Brunswick entrepreneurs promoted ties to the United States first, connections with Halifax second, and routes into central Canada last. Thus metropolitan rivalries between Montreal, Halifax, and Saint John led Canada to build more railway lines per capita than any other industrializing nation, even though it lacked capital resources, and had too little freight and passenger traffic to allow the systems to turn a profit.
Den Otter (1997) challenges popular assumptions that Canada built transcontinental railways because it feared the annexationist schemes of aggressive Americans. Instead Canada overbuilt railroads because it hoped to compete with, even overtake Americans in the race for continental riches. It downplayed the more realistic Maritimes-based London-oriented connections and turned to utopian prospects for the farmlands and minerals of the west. The result was closer ties between north and south, symbolized by the Grand Trunk's expansion into the American Midwest. These economic links promoted trade, commerce, and the flow of ideas between the two countries, integrating Canada into a North American economy and culture by 1880. About 700,000 Canadians migrated to the U.S. in the late 19th century. The Canadian Pacific, paralleling the American border, opened a vital link to British Canada, and stimulated settlement of the Prairies. The CP was affiliated with James J. Hill's American railways, and opened even more connections to the South. The connections were two-way, as thousands of American moved to the Prairies after their own frontier had closed.
Two additional transcontinental lines were built to the west coast--three in all--but that was far more than the traffic would bear, making the system simply too expensive. One after another, the federal government was forced to take over the lines and cover their deficits. In 1923 the government merged the Grand Trunk, Grand Trunk Pacific, Canadian Northern and National Transcontinental lines into the new the Canadian National Railways system.
Since most of the equipment was imported from Britain or the U.S., and most of the products carried were from farms, mines or forests, there was little stimulation to domestic manufacturing. On the other hand, the railways were essential to the growth of the wheat regions in the Prairies, and to the expansion of coal mining, lumbering, and paper making. Improvements to the St. Lawrence waterway system continued apace, and many short lines were built to river ports.
India provides an example of the British Empire pouring its money and expertise into a very well built system designed for military reasons (after the Mutiny of 1857), and with the hope that it would stimulate industry. The system was overbuilt and much too elaborate and expensive for the small amount of freight traffic it carried. However, it did capture the imagination of the Indians, who saw their railways as the symbol of an industrial modernity—but one that was not realized until a century or so later.
The British built a superb system in India. However, Christensen (1996) looks at of colonial purpose, local needs, capital, service, and private-versus-public interests. He concludes that making the railways a creature of the state hindered success because railway expenses had to go through the same time-consuming and political budgeting process as did all other state expenses. Railway costs could therefore not be tailored to the timely needs of the railways or their passengers.
By the 1940s, India had the fourth longest railway network in the world. Yet the country's industrialization was delayed until after independence in 1947 by British colonial policy. Until the 1930s, both the Indian government and the private railway companies hired only European supervisors, civil engineers, and even operating personnel, such as locomotive drivers (engineers). The government's "Stores Policy" required that bids on railway matériel be presented to the India Office in London, making it almost impossible for enterprises based in India to compete for orders. Likewise, the railway companies purchased most of their matériel in Britain, rather than in India. Although the railway maintenance workshops in India could have manufactured and repaired locomotives, the railways imported a majority of them from Britain, and the others from Germany, Belgium, and the United States. The Tata company built a steel mill in India before World War I but could not obtain orders for rails until the 1920s and 1930s.
In the United States, railway mania began with the Baltimore and Ohio Railroad in 1828 and persisted through the 1870s. Although the South started early to build railways, it concentrated on short lines linking cotton regions to oceanic or river ports. Its lack of a real network was a major handicap during the American Civil War. The North and Midwest constructed networks that linked every city by 1860. In the heavily settled Corn Belt (from Ohio to Iowa), over 80% of farms were within 5 miles of a railway. A large number of short lines were built, but thanks to a fast developing financial system based on Wall Street and oriented to railway securities, the majority were consolidated into 20 trunk lines by 1890. State and local governments often subsidized lines, but rarely owned them. The federal government operated a land grant system between 1855 and 1871, through which new railway companies in the uninhabited West were given millions of acres they could sell or pledge to bondholders. A total of 129 million acres were granted to the railroads before the program ended, supplemented by a further 51 million acres granted by the states, and by various government subsidies. This program enabled the opening of numerous western lines, especially the Union Pacific-Central Pacific with fast service from San Francisco to Omaha and east to Chicago. West of Chicago, many cities grew up as rail centers, with repair shops and a base of technically literate workers.
Although the transcontinentals dominated the media, with the completion of the first in 1869 dramatically symbolizing the nation’s unification after the divisiveness of the Civil War, most construction actually took place in the industrial Northeast and agricultural Midwest, and was designed to minimize shipping times and costs.
The U.S. imported British technology in the 1830s, but was soon self sufficient, as thousands of machine shops turned out products and thousands of inventors and tinkerers improved the equipment. The military academy at West Point saw most of its graduates become civil engineers in the private sector. This was a better paying, higher status job than army officer, in stark contrast to the preeminence of officers in Europe. The result was that the Americans became enamored of engineering solutions for all economic, political and social problems, combined with an unusually strong financial system that grew out of the railways.
As the railways grew larger they devised increasingly complex forms of management, invented middle management, setting up career paths, and establishing uniform bureaucratic rules for hiring, seniority, firing, promotions, wage rates and benefits.
Chandler (1965) demonstrates that the large-scale problems of management became obvious in the middle of the 19th century with the rise of the great railroad systems, such as the Pennsylvania and the Baltimore and Ohio. New methods had to be invented for mobilizing, controlling, and apportioning capital, for operating a widely dispersed system, and for supervising thousands of specialized workmen spread over hundreds of miles. The railroads solved all these problems and became the model for all large businessed. The main innovators were three engineers, Benjamin H. Latrobe of the Baltimore and Ohio, Daniel C. McCallum of the Erie, and J. Edgar Thomson of the Pennsylvania Railroad. They devised the functional departments and first defined the lines of authority, responsibility, and communication with the concomitant separation of line and staff duties which have remained the principles of the modern American corporation.
By 1880, the nation had 17,800 locomotives carrying 23,600 tons of freight, but only 22,200 passengers. The effects of the American railways on rapid industrial growth were many, including the opening of hundreds of millions of acres of very good farm land ready for mechanization, lower costs for food and all goods, a huge national sales market, the creation of a culture of engineering excellence, and the creation of the modern system of management.
Licht (1983) shows that railways changed employment in many ways. Lines with hundreds or thousands of employees developed systematic rules and procedures, not only for running the equipment but in hiring, promoting, paying and supervising employees. The railway system was adopted by all major business. Railways offered a new type of work experience in enterprises vastly larger in size, complexity and management. At first workers were recruited from occupations where skills were roughly analogous and transferable, that is, workshop mechanics from the iron, machine and building trades; conductors from stagecoach drivers, steamship stewards and mail boat captains; station masters from commerce and commission agencies; and clerks from government offices.
Throughout western Europe, railway construction was the main engine of economic growth in the 1840s and into the 1850s, stimulating growth in coal mining, iron mongering, machinery making and civil engineering. By speeding up turnover, the railways made wholesaling and manufacturing more profitable, while bringing remote farmlands closer to markets and thus much more profitable. The creation of complex business organizations led to the multiplication of new managerial and engineering skills that spread from railways to other technologically-oriented industries. As T.H. Ashton concluded: “The locomotive railway was the culminating triumph of the technical revolution: its effects on the economic life of Britain and, indeed, of the world, have been profound.”
In France, railways became a national medium for the modernization of backward regions, and a leading advocate of this approach was the poet-politician Alphonse de Lamartine. One writer hoped that railways might improve the lot of “populations two or three centuries behind their fellows” and eliminate “the savage instincts born of isolation and misery.” Consequently, France built a centralized system that radiated from Paris (plus lines that cut east to west in the south). This design was intended to achieve political and cultural goals rather than maximize efficiency. After some consolidation, six companies controlled monopolies of their regions, subject to close control by the government in terms of fares, finances, and even minute technical details. The central government department of Ponts et Chaussées [roads and bridges] brought in British engineers and workers, handled much of the construction work, provided engineering expertise and planning, land acquisition, and construction of permanent infrastructure such as the track bed, bridges and tunnels. It also subsidized militarily necessary lines along the German border, which was considered necessary for the national defense. Private operating companies provided management, hired labor, laid the tracks, and built and operated stations. They purchased and maintained the rolling stock—6,000 locomotives were in operation in 1880, which averaged 51,600 passengers a year or 21,200 tons of freight. Much of the equipment was imported from Britain and therefore did not stimulate machinery makers. Although starting the whole system at once was politically expedient, it delayed completion, and forced even more reliance on temporary experts brought in from Britain. Financing was also a problem. The solution was a narrow base of funding through the Rothschilds and the closed circles of the Bourse in Paris, so France did not develop the same kind of national stock exchange that flourished in London and New York. The system did help modernize the parts of rural France it reached, but it did not help create local industrial centers. Critics such as Emile Zola complained that it never overcame the corruption of the political system, but rather contributed to it. The railways probably helped the industrial revolution in France by facilitating a national market for raw materials, wines, cheeses, and imported manufactured products. Yet the goals set by the French for their railway system were moralistic, political, and military rather than economic. As a result, the freight trains were shorter and less heavily loaded than those in such rapidly industrializing nations such as Britain, Belgium or Germany. Other infrastructure needs in rural France, such as better roads and canals, were neglected because of the expense of the railways, so it seems likely that there were net negative effects in areas not served by the trains.
Belgium provided an ideal model for showing the value of the railways for speeding the industrial revolution. After breaking with the Netherlands in 1830, the new country decided to stimulate industry. It planned and funded a simple cross-shaped system that connected the major cities, ports and mining areas, and linked to neighboring countries. Belgium thus became the railway center of the region. The system was very soundly built along British lines, so that profits were low but the infrastructure necessary for rapid industrial growth was put in place.
In Germany, political disunity (Germany did not become unified until 1870) and deep conservatism made it difficult to build lines in the 1830s. However, by the 1840s, trunk lines did link the major cities, although each German state was responsible for the lines within its own borders. Economist Frederick List summed up the advantages to be derived from the development of the railway system in 1841:
- First, as a means of national defense, it facilitates the concentration, distribution and direction of the army. 2. It is a means to the improvement of the culture of the nation…. It brings talent, knowledge and skill of every kind readily to market. 3. It secures the community against dearth and famine, and against excessive fluctuation in the prices of the necessaries of life. 4. It promotes the spirit of the nation, as it has a tendency to destroy the Philistine spirit arising from isolation and provincial prejudice and vanity. It binds nations by ligaments, and promotes an interchange of food and of commodities, thus making it feel to be a unit. The iron rails become a nerve system, which, on the one hand, strengthens public opinion, and, on the other hand, strengthens the power of the state for police and governmental purposes.
Lacking a technological base at first, the Germans imported their engineering and hardware from Britain, but quickly learned the skills needed to operate and expand the railways. In many cities, the new railway shops were the centers of technological awareness and training, so that by 1850, Germany was self sufficient in meeting the demands of railroad construction, and the railways were a major impetus for the growth of the new steel industry. Observers found that even as late as 1890, their engineering was inferior to Britain’s. However, German unification in 1870 stimulated consolidation, nationalization into state-owned companies, and further rapid growth. Unlike the situation in France, the goal was support of industrialization, and so heavy lines crisscrossed the Ruhr and other industrial districts, and provided good connections to the major ports of Hamburg and Bremen. By 1880, Germany had 9,400 locomotives pulling 43,000 passengers or 30,000 tons of freight.
Russia was a latecomer, building a private system in the 1870s and 1890s. The state nationalized most of the lines, with military goals in mind, as exemplified by the Trans-Siberian railroad, and with the aid of foreign funding. While the modernizing dreams of Count Wittke in the early 20th century were not fully realized, the lines did give an impetus to the metallurgical industry, as a major new industrial area grew up in the south, based on the coal mines of the Donetz basin and the iron ore of Krivoi Rog, linked by rail lines.
In Spain, the railways were designed by the government to foster industry, but setting the hub in Madrid for political reasons negated much of the advantage. The lines were poorly built and poorly managed, and probably slowed industrialization by diverting capital and talent.
In Italy, the railways were a political necessity to bind together the new nation. The equipment, expertise and funding was imported, but the main export, silk, was too light to make the system profitable.
In Japan railways were part of the stunningly successful industrial transformation of the late nineteenth century. Betweem 1870 and 1874, railway building accounted for nearly a third of all state investment in modern industry, augmented by large British loans. Profits were high as the lines facilitated the rapid growth of textiles, cement, glass, and machine tools as well as civil engineering.
China started building late. In 1900 there were only 860 kilometers of track and about 3,000 railway workers. After 1920 the major cities, ports and mining districts were connected. Railways became a major employer of industrial labor and by 1937 they had about 300,000 employees in China Proper and the Japanese-controlled Northeast, along 21,270 kilometers of track.
See also Industrial Revolution
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