The work of such a man as George Hudson, who rose from a position of obscurity until he could command the policy of several railroads, simply because of his gambling in railway shares and his ability to exercise undue influence over railway directors, was, doubtless, an incentive to others to try the same method of piling up wealth1. The names he received as the "Railway King" and the "Railway Napoleon" are typical of his shrewd, grasping policy, his work as a stock-jobber, and his ability to lord it over railway officials for his own material ends. Others were, doubtless, imitating his example; and the rage for speculation was fostered by the weekly reports and circulars of the many brokers. In the latter part of the year 1844 railway projects were numerous, money was abundant, and its investment in railways. was encouraged by the prospects of profit held out by scheming designers as bait to the unwary2. The editor of the most important railway journal of the time informs us that the fashionable phrase regarding the numerous railway undertakings that were daily making their appearance, was to say that a railway fever was raging3; and the editor of the London Times was urged to raise his voice in warning against the mania which was then spreading rapidly over the land, and which promised a severe financial crisis that would shake the country. By November 1844, a list of projected lines involving the aggregate capital of £563,203,000 was published, but many of these were abandoned. The rage for shares continued and increased in intensity in 1845, until it infected all classes from peer to peasant and from private individual to government officials. The press was full of

Grand Junction, London and Birmingham, Great Western, Birmingham and Gloucester, London and South Western, Manchester and Leeds, and the York and North Midland.

1 For his career, see the files of the Railway Times, vi (1843), pp. 1058, 1084, 1095–6, 1122, 1312-13; vII (1844), pp. 62, 131, 173-4, 327-8 (in which he is called the "Prince of Premium Hunters"), etc. Also the great detail given by Grinling, History of the Great Northern Railway.

2 Brit. Mus. 1396. g. 21, ‘Railways and the Board of Trade,' p. 7.

3 Railway Times, vII (1844), p. 485.

The Times, Nov. 20, 1844, p. 7, letter from "John Trot."

5 Jeans, Jubilee Memorial of the Railway System, p. 142, quoting from Spackman's published list.

Brit. Mus. 1396. e. 22 (4), ‘Ruminations on Railways,' No. 1, on "Railway Speculation," discussed the mania with sanity. The writer said (p. 6): "Such is the delirium in the share market, that many an honest, industrious tradesman withdraws from his more sober pursuits behind the counter, and dubs himself that delver into the mines of Golconda, a share-broker." In subsequent pages he goes

on to describe how vehement was the fever for railroads. d. 27, 'Railways and Shareholders,' p. 3.

See also Brit. Mus. 8235.

railway prospectuses1; and a large amount of the shares were in the hands of persons who were holding them, not for investment, but merely for speculation2. Share jobbing was rife3. Even such journals as the Railway Times and The Economist were encouraging this vast expenditure of money and declaring that railway securities would constitute important means of investing capital. On the other hand, the editor of the London Times was giving words of warning to the public against the time when blind confidence would be displaced by doubt and when the inevitable collapse would come5. All kinds of fraudulent methods were employed to delude the public and secure their funds. The significance of the mania may be judged by the fact that, during the three years 1844-6, Parliament sanctioned Bills for the construction of 8470 miles of railway, which was just about three times the mileage then constructed; and the amount of capital required for them, £180,138,901, was so great that the further growth of the railway system was checked for some years. The financial panic which followed the railway mania, and which was probably in large measure due to the locking up of so much money in these temporarily 1 See, for example, the Railway Times, The Economist, The Times, in their advertising columns.

The Times, Aug. 9, 1845, p. 6, on "Railway Speculation."

3 Ibid., July 11, 1845, p. 5; July 12, 1845, p. 5; July 14, 1845, p. 5; July 21, 1845, p. 7; July 25, 1845, p. 8; etc.

♦ The Economist, 1845, p. 1013; Railway Times, vii, p. 485.

5 The Times, Aug. 9, 1845, p. 6. It is interesting to contrast the editorial opinion of the Railway Times in 1844, when it was said that there was "neither fever nor lunacy in forming new railway schemes without end" (VII, p. 485), with that in 1845, when his verdict was that those embarking in new railway schemes ought to exercise more caution (vIII, Pt. 1, p. 569).

Railway Times, vin, Pt. 1, p. 1013, letter from "Expositor;" 'Railways as they Really Are,' No. 1, on the London, Brighton and South Coast Railway,' which exposes the frauds of this company, also Nos. II and vII; Brit. Mus. 8235. d. 27, 'Railways and Shareholders,' pp. 3-4; The Times, Oct. 18, 1845, p. 5, editorial; ibid., Oct. 23, 1845, p. 7, letter on " Railway Speculation." This subject was continued in ibid., Oct. 25, 1845, p. 4; Oct. 27, 1845, p. 4; Nov. 8, 1845, p. 4; Nov. 14, 1845, p. 4; Dec. 2, 1845, p. 4; in which the editor wrote strongly against the tide of speculation that was flooding the country. See also Brit. Mus. 1396. e. 22 (4), 'Ruminations on Railways,' No. II, 'The Railway Board of Trade,' and Brit. Mus. 1396. g. 21, 'Railways and the Board of Trade,' 3rd ed., pp. 20-28, showing the evils that attended the work of this body.

7 Jeans, op. cit., p. 142. In the year 1846 alone the length of railway authorized was almost double the total length of line authorized up to the end of 1843. Brit. Doc. 1854-5 [1965], XLVIII, 1, 'Report of the Railway Department of the Board of Trade' for 1854, p. xi. The amount of money authorized to be raised for the railways that were sanctioned in 1846 was £132,617,368; for those of 1847, £39,460,128; for those of 1848, £15,274,237; for those of 1849, £3,911,331 (ibid., p. vii).

unproductive enterprises, was severely felt in the spring of the year 1847, but we shall avoid any further reference to that subject. One outcome of the mania to which we may here allude was the great number of suits that were brought before the courts; some of these were instituted by railway companies against shareholders, because the latter refused to pay up the calls that were made upon them in connexion with their subscriptions; others were brought by individuals to recover deposits of money that they had advanced for the construction of railways which had not materialized. Some suits were started as a consequence of the winding up of undertakings that had proved abortive; and others were due to a variety of causes, which we need not enumerate1.

We have already noted that up to and including the year 1843 there had been considerable amalgamation of railways2; in fact, it was asserted in 1843 that "amalgamation is the order of the day." But after the cessation of the mania in 1846 there was a still greater agitation for amalgamation. With the great amount of construction and reorganization which took place immediately following the mania, the weaker roads found it necessary to ally with the stronger, not only to reduce the expenses of management and operation, but to produce peaceful relations among the companies. Beginning with this epochmaking time in the history of the railways, a vast amount of consolidation was effected, and the railways, instead of being left as independent units, were gradually becoming organized into a system which was beginning to take on its permanent form. We may say that, by 1850,

1 Railway and Canal Cases, Vols. iv and v, give many of these.

• Railway Times, Vol. vi, gives much material on this subject, in addition to what we have already given.

3 Ibid., vi, p. 1128.

4 Ibid., Ix, p. 316.

5 Brit. Doc. 1847–8 (510), LXIII, 449, gives very complete returns of all existing railway amalgamations in Great Britain and Ireland, accompanying which is a map showing the amalgamation of railways that had taken place.

The tendency in 1844 for railways to consolidate into a few great systems was becoming daily more manifest. The results that had already been realized showed conclusively that the probability was that the principal lines would be grouped into six or eight leading divisions. For the consolidations that had been made by 1844, see Brit. Doc. 1844 (318), XI, 17, 'Fifth Report of Select Committee on Railways,' Appendix No. 2, p. 21. For the probable results of the tendency toward amalgamation, see ibid., Appendix No. 2, p. 21.

The leading systems, as developed in outline, by 1844 were as follows: First. The Great North Western artery, extending for 238 miles in a direct line from London to Lancaster and connecting Birmingham, Manchester, Liverpool, and the manufacturing districts of Lancashire with the metropolis.

Second. The Great Midland and North Eastern system, beginning at Darlington, passing through York, within a few miles of Leeds and Sheffield, through Derby

the present-day grouping of lines into the great arteries of communication had been effected; and the changes since then have been the filling in of the network.

In connexion with the subject of amalgamation, there are one or two other features which require mention. The earlier railways had been formed by companies owning comparatively short lines; for example, the line from London to Liverpool belonged to three companies; and great loss of time and inconvenience arose from the want of unity of management and from disputes between the companies. Therefore, partly for economy of management, and partly for the convenience of the traffic, some of these companies whose lines formed links in a through route obtained powers to amalgamate. But as time went on a further increase in the number of railways led to competition of rival lines at many more points. This resulted in further amalgamation and buying up of rivals. Thus, amalgamation, which at first was a question of economy of management and public convenience, became later a matter of offensive and

and Leicester, and meeting the Great North Western artery at Rugby. The length of this line was 2013 miles, and it was soon to be extended to Newcastle.

Third. The Great Western system, from London to Bath, Bristol and Exeter. This when completed would give 1941 miles in a continuous line.

Fourth. The great transverse system, formed by the Liverpool and Manchester, the Manchester and Leeds, the Leeds and Selby, and the Hull and Selby railways, connecting the two leading ports of the east and west coasts, by a line of communication 132 miles long, and passing through the heart of the great manufacturing districts of Lancashire and Yorkshire.

Fifth. The South Western system, from London to Southampton and Portsmouth.

Sixth. The South Eastern system, consisting of the Dover and Brighton Railways, which diverged from a common trunk a little south of Croydon.

Seventh. The Eastern Counties system, intended to have connected Norwich and the Eastern counties with the metropolis, but only finished at that time from London to Colchester, 51 miles.

Eighth. The Northern and Eastern system, intended to connect London with York by a line passing through Cambridge and Lincoln, and completed for only 32 miles out of London.

Among the minor and subsidiary lines may be mentioned:

First. The Newcastle and Carlisle Railway, connecting the North Eastern and North Western arteries.

Second. The Birmingham and Gloucester, Bristol and Gloucester, and Cheltenham and Great Western railways, connecting the North Western and Great Western arteries.

Third. The Birmingham and Derby Railway, connecting the Midland and the North Western arteries.

(v. Brit. Doc. 1844 (318), xi, 17, 'Report of Railway Department of Board of Trade,' Appendix No. 2, p. 6.)

defensive policy, to enable the companies to fight one another more successfully.

The benefits from amalgamation were so apparent that many could foresee its continuance until all the railways of the country were united under the control of a few large corporations. Some went even further than that, and advocated a general amalgamation of all the railways, not only from the standpoint of economy of operation, but to prevent a great deal of the jobbing and indiscretion that existed in some boards of directors1. As early as 1846 a scheme was proposed for merging the shares of all railway companies into one common stock, under the management of a general proprietary board2; and this idea so occupied public attention that in 1852 the issue was investigated by a committee of Parliament3. That committee, however, reported adversely upon the plan, and it was never attempted. Another proposed solution of the railway problem, after the principle of monopoly had been recognized, was that certain districts should be assigned to particular railway companies, and that in those districts each should be protected from competition, in exchange for certain advantages that they were to give the public. No definite plan was brought forward to carry this into execution and its futility soon became evident.

Another factor tending to the harmonious operation of railways, after the principle of amalgamation had been quite largely followed out, was the establishment in 1847 of the Railway Clearing House. In the earlier period of railways, the rolling stock of one company did not generally pass from one line to another and the inconvenience and expense due to change of vehicles or transhipment were very great. But when the railway system had been developed to a considerable extent, it was necessary for the companies to have a mutual understanding in regard to the sending of traffic over one another's lines. For this purpose, the chief railway companies formed from among themselves an association, with a central office in London, to regulate certain questions of interchange of traffic as between the several companies, and to adjust the accounts arising out of the united action of the companies: to settle disputes as to the division of, and to

1 Brit. Doc. 1846 (489), XIII, 217, 'Report of Select Committee of House of Lords on Railways,' evidence of Mr W. Cubitt, p. 101, Q. 898; also 1852–8 (736), XXXVIII, 447, 'Minutes of Evidence,' p. 32. 2 Ibid.

Brit. Doc. 1852–3 (736), xxxvIII, 447, ‘Fifth Report of Select Committee on Railway and Canal Bills.' It shows that such a general amalgamation would be undesirable, and why.

• This view was taken by Gladstone's Committee of 1844 and by Lord Dalhousie's Railway Commission of 1845. See also Brit. Doc. 1852–3 (170), xxxvIII, 5, ‘Second Report of Select Committee on Railway and Canal Bills, Minutes of Evidence,' p. 30.