Wednesday, 25 April 2012

PhD Historiography Snippet - Forward Planning by Railway Companies

The Midland Railway's St. Pancras Station
Numerous historians have touched on the lack of accurate forward planning in railway companies’ investment policies in the nineteenth century. Irving argued that in the 1870s the NER’s investment was higher than the line’s traffic demanded and in the 1880s only kept pace with it. Consequently, with traffic increasing rapidly in the late 1880s, investment policies failed by 1888 as network capacity was inadequate.[1] Hodgkins argued that Sir Edward Watkin’s attempted expansion of the small Manchester, Sheffield and Lincolnshire Railway in the1880s added lines that were ‘too much for it to digest’. Ultimately these extensions were expensive failures as they were 'not properly weighed up as investment opportunities.'[2] 

Channon’s study of the Midland Railway’s extension to London in 1869 provided the most detail on what decision-makers knew when formulating a major policies. He argued that those who made the decision, the General Manager and a small group of directors, could not be considered traditional ‘profit maximisers’ as their ‘knowledge of costs revenues, and alternatives was either too rudimentary or too incomplete to form the basis of accurate profit forecasts.’ Indeed, construction costs, especially in London, were particularly hard to predict.[3] Therefore, if Channon's assessment of the knowledge Midland Railway decision-makers' had is applied to the cases above, it suggests that those directing policy within nineteenth century railway companies possessed rudimentary information regarding the cost of, and potential revenues from, their ventures.

[1] Irving, R.J., The North Eastern Railway Company, (Leicester, 1976)  , p.166
[2] Hodgkins, David, The Second Railway King: The Life and Times of Sir Edward Watkin, (Melton Priory, 2002)  , p.486
[3] Channon, Geoffrey, Railways in Britain and the United States, 1830-1940: Studies in Economic and Business History, (Aldershot, 2001), p.107

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