The financial impact of the Great Central Railway’s London extension

By

Tony Sheward

© Tony Sheward 2020

1 THE FINANCIAL IMPACT OF THE GREAT CENTRAL RAILWAY’S LONDON EXTENSION

1. Introduction

The general opinion of authorities, who have written about the Great Central Railway’s (GCR) London Extension, seems to be that the project was not a financial success and acted as a drag on the company’s performance in the years following its opening. This article attempts to examine the financial results of the GCR in the years immediately leading up to the decision to commit to the project, the construction period, and operations from its opening up to 1913. It seeks to discover whether there were other factors, which influenced its financial performance either positively or negatively. For convenience, the title Great Central Railway is used throughout even though this name was not adopted by the Manchester, Sheffield & Lincolnshire Railway until 1897. A glossary of the abbreviations for the various lines is included at the end.

The detailed financial figures are presented in four time periods as follows:

a. The Immediate Years Prior to Work on the London Extension 1887-93 b. Construction of the London Extension Phase I 1894-99 c. Construction of the London Extension Phase II 1900-06 d. The Years after Completion of the London Extension Work 1907-13

The article takes as its main source the annual reports of GCR1 and the Railway Returns2. The historical background for the article is mainly taken from published sources, in particular the three-part history of the GCR by George Dow3 and the short history of the GCR by Robert Hartley.4

Although up to 1912, the annual reports were prepared in two half yearly tranches, the information in this article is presented by calendar year for ease of understanding and comparison. Also, 1913 was the first year in which the Railway Companies (Accounts and Returns) Act 1911 (the 1911 Act) took effect and yearly annual reports began. The figures for 1913 have been reconfigured to fit the reporting formats used up to 1912.

2. An Overview

Before looking in detail at the figures for the years covered, it is useful to take a bird’s eye view of what happened to the GCR during that period. The following graphs are set out in Figures A-E:

A. Gross Traffic Receipts from Passenger & Freight Trains B. Total Capital Receipts C. Net Revenue before Interest on Debentures and Loans, and Dividends D. Percentage Dividend on Ordinary Shares

2 E. Percentage Return on Capital versus Return on Long Term Debt and Consumer Prices Index

The monetary figures are as reported in the accounts, but of course there was inflation over the period covered and this distorts the figures to some extent. The Bank of England’s inflation calculator gives some idea of the impact that it has had. The figures below show the purchasing power of £1 in 2018 pounds at five-year intervals over the period covered and for 1913: Year Equivalent in 2018 Pounds £ 1887 129.16 1892 124.81 1897 127.68 1902 120.74 1907 118.17 1912 112.20 1913 113.35

Between 1887 and 1913 the overall effect of inflation was relatively modest with the pound in 1887 having a purchasing power of £129.16 in 2018 pounds and £1 in 1913 £113.35. As can be seen above, there was not a smooth progression due to the cyclical nature of economic growth.

The movement of the total gross traffic receipts over the four time periods in Figure A was as follows comparing the closing year of the previous period with the last year of the current period:

Year Gross Year Gross Percentage Traffic Traffic Increase Receipts Receipts £m £m % 1886 1.709 1893 1.845 8.0 1893 1.845 1899 2.699 46.2 1899 2.699 1906 3.752 39.0 1906 3.752 1913 4.897 30.5

The above figures are distorted by the coal strike in 1893. If the year 1892 (£2.071m) is substituted, then the growth from 1886 to 1892 was 21.2 per cent and that from 1892 to 1899 was 30.3 per cent. On the basis of these figures, it can be seen that there was an increase in the rate of growth following Phase I of the London Extension, although this was not maintained in the years after Phase II was completed. The industrial relations problems that affected the rail, coal, cotton textiles and shipbuilding industries in 1908 and 1911-12 were partly responsible.

In 1887, the GCR was predominantly a freight railway with gross receipts from freight trains making up 72.5 per cent of the total. The completion of the two Phases of the London

3 Extension did move the balance somewhat towards passenger trains, with 71.9 per cent of the total gross receipts coming from freight trains in 1899 and 70.1 per cent in 1906. However, in the years 1907-13 the percentage from freight trains began to edge up again reaching 73.3 per cent in 1913, slightly higher than it had been in 1887. In the graph, the plot for the total gross receipts is not unnaturally similar to that for the gross receipts from freight trains. The plot for the gross receipts from passenger trains is much smoother and less affected by the incidents of industrial unrest.

The amount of capital received by the GCR from the issue of securities in Figure B during the four time periods were as follows:

Period Capital Percentage Cumulative Received Increase Capital On 1887-1893 End of Period £m % £m To 1886 26.691 1887-1893 4.939 31.630 1894-1899 9.931 101.1 41.561 1900-1906 6.476 31.1 48.037 1907-1913 5.677 14.9 53.714

The first Phase of the London Extension required a more than doubling in the amount of capital received and, although Phase II needed less, it was still nearly a third more than during the pre-Extension period. After the two Phases were completed, capital received in the last period was nearer to the pre-Extension level, allowing for inflation. As will be seen in the detailed review of the years concerned below, this put a considerable burden on the GCR’s overall financial position. One instance of this was the use of various forms of working capital such as short-term loans and Lloyds Bonds. Hire purchase agreements for the supply of wagons had been used before 1887, but a special company, the Railway Rolling Stock Trust Ltd was formed to handle the hire purchase of the working stock for the Extension.

Of course, not all of the capital required for the two Phases of the London Extension was raised directly by the GCR. In Phase I, the GCR formed a joint committee to use the Metropolitan Railway’s (MR) lines from Harrow to Quainton Road and rented a pair of tracks from Harrow to Canfield Place near Marylebone from the MR. In Phase II, it formed a joint committee with the Great Western Railway (GWR) to build a line from Northolt Junction to Ashendon Junction. The construction of the new Nottingham Victoria station was covered by a joint committee with the Great Northern Railway (GNR) and the GNR made advances to the GCR for its share of the cost. Similarly, the GWR made advances to the GCR for both the construction of the Banbury Branch and its share of the joint line. Although such arrangements reduced the upfront capital costs, they did mean that there were higher fixed costs for rents, interest etc. once operations began.

The figures in Figure C shows the money that was left after the net revenue from operations, other receipts and other expenditures to be able to pay the interest on debentures and loans and dividends to shareholders. The figures can be summarised as follows:

4 Year Net Year Net Percentage Revenue Revenue Increase/ (Decrease) £m £m % 1886 1.090 1893 0.961 (11.8) 1893 0.961 1899 1.110 15.5 1899 1.110 1906 1.448 30.5 1906 1.448 1913 1.778 22.8

As with Graph A, the figure for 1893 was distorted by the coal strike in that year. If the year 1892 (£1.243m) is substituted, then the growth from 1886 to 1892 was 14.0 per cent and that from 1892 to 1899 was a reduction of 10.7 per cent. On the basis of these figures, it can be seen that there was pressure on net revenue during the construction work for Phase I, but that once it was operational the percentage rate of growth grew significantly. After completion of Phase II, growth continued at a slightly lower rate.

The extent to which the above growth was sufficient to cover the higher interest and dividend charges resulting from the capital raised to finance the London Extension and indeed produce better results than before is a very important consideration. This is examined further in the consideration of Figures D and E below.

Figure D shows that even before work on the London Extension started the GCR was not able to match the dividend payments on ordinary shares paid by some of its rivals. It should be explained that the GCR did in fact have three types of ordinary share; preferred ordinary shares that had some prior rights to a dividend, the normal ordinary shares and deferred ordinary shares which only had a right to a dividend after a payment to the other two. The percentages in Figure D are those for the normal ordinary shares and are the arithmetical average for the two half year dividends in each year.

Although 3⅜ per cent was paid in 1889 this proved to be an exceptional year and payments in the other years of 1887-93 were all well below that. The year 1893 was particularly difficult as a result of the coal strike in that year and no dividend was paid on any of its ordinary shares. In addition, it was not possible to make full payments to all its classes of preference shares. The preferred ordinary shares received a dividend in all years other than 1893 either equal to or slightly higher than that to the normal shareholders. The deferred ordinary shareholders received a dividend of ¾ per cent in 1889, which was to prove their only dividend until Grouping in 1923.

After work started on the London Extension, dividends were only paid on the normal ordinary shares in the four years 1894-97, with the maximum of 1¼ per cent in 1896. The preferred ordinary shares also received payments in those years. After 1897, no payments were made on any of the categories of ordinary shares in the period up to 1913, apart from ½ per cent to the preferred ordinary shares in 1898. From 1898 to 1913, it was also not possible to pay the preference share dividends on all the categories of preference share. In 1913 a full payment to all categories of preference share was almost achieved.

5 Figure E shows the percentage return on capital (the net revenue in Figure D as a percentage of capital receipts in Figure C) and gives a good indication of what sort of investment the GCR was for its ordinary shareholders. In the period 1887-93, the return on capital was above 4 per cent in all years apart from 1893, when it fell to 3 per cent. The return on government long term bonds5 is taken to represent a risk-free rate of return and one would expect railway ordinary shares to have a reasonable margin above that. As the return on government long term bonds was below 2¾ per cent in all years during that period, the GCR was performing satisfactorily apart from 1893. The consumer prices index6 is taken to be a measure of inflation and the GCR’s percentage was well above that during the period.

From 1894, the percentage return on capital, showed a gradual decline from 3.8 per cent in 1894 to 2.2 per cent in 1900, at which point it was lower than the return on government long term bonds at 2.53 per cent and remained so until 1905. From 1906 to 1913 the percentage return stabilised around 3 per cent rising in 1913 to 3.3 per cent. The rate of return on government long term bonds rose gradually during this period from 2.83 per cent in 1906 to 3.39 percent in 1913. As a result, the percentage return was just below that on government long term bonds for most of the years. Although the GCR’s net revenue rose as a result of the investment in the London Extension in absolute returns, it was not enough to produce a satisfactory margin over a risk-free borrowing rate.

The consumer prices index remained relatively low from 1894-1913 in a range 1.4-1.6 per cent and the GCR’s net revenues at least provided protection against inflation.

3. The Immediate Years Prior to Work on the London Extension 1887-93

A period of seven years prior to the first expenditures on the London Extension in 1894 has been taken has been taken as a reasonable indicator of how the GCR was performing before that commitment was made. The increases in capital authorised and created and the amount received into the capital account over the period were as follows:

6 31 December 1886 31 December 1893 Increase £m £m £m Capital Authorised & Created Shares 19.572 23.301 3.729 Loans 7.802 9.097 1.295

Total 27.374 32.398 5.024

Amount Received into Capital Account Shares 19.062 23.004 3.942 Loans 7.625 8.622 0.997 Miscellaneous 0.004 0.004 -

Total 26.691 31.630 4.939

In 1894, £6.2m of ordinary stock was authorised and created specifically for the London Extension, so none of the above increases related to the that project.

The total amount spent on capital account by the end of 1893 was £31.969m made up of:

£m Lines in the course of construction - Lines open for traffic 17.118 Working stock 3.708 Subscriptions to other railways 7.318 Docks, steamboats and other non-railway items 3.825

Total 31.969

Although there were a number of lines under construction by the GCR on its own account during the period, by the end of 1892 these were essentially open for traffic and the decks cleared for the London Extension. From 1894-1900, the only lines under construction by the GCR were the London Extension and the Banbury Branch connecting it with the GWR. One item of note is the extent to which the GCR had historically been involved in joint lines and the subscriptions to these were equivalent to 43 per cent of the spending on the companies own lines open for traffic and 23 per cent of the total capital spend. These subscriptions covered investment in both new lines and existing lines. Docks, steamboats and other non- railway activities accounted for 12 per cent of the total capital spend.

The capital expenditure 1887-93 was made up of the following:

7 Table 1 Analysis of Capital Expenditure 1887-93 Part I

1887 1888 1889 1890 1891 1892 1893 Total £ £ £ £ £ £ £ £ Lines Under Construction Wigan Extension 1,483 11,983 1,475 39,272 48,073 11,975 114,261 Fairfield & Central Stn 7,829 7,829 Branch Manchester Ctrl Stn 6,282 35,766 80,200 108,049 149,879 380,176 Chester & Connah’s Quay 37,170 90,968 134,658 262,796 Liverpool Huskisson to Central 1,251 381 2,304 58 3,994 Wirral 1,648 887 2,599 5,134 Beighton, Chesterfield & Annesley 8,666 306,655 558,971 582,477 1,456,769 Houghton Main Branch 9,238 36,277 26,399 71,914 Sub Total 52,764 139,968 227,028 466,405 795,857 620,851 2,302,873

Lines Open for Traffic Land Purchase (6,404) 13,278 14,512 (1,895) 24,797 21,524 105,082 170,894 Construction of Way & Stations 34,423 21,174 45,893 145,177 159,873 142,013 349,713 898,266 Law & Parliamentary 1,630 3,456 5,001 3,005 1,774 255 2,895 18,016 Other Sub Total 29,649 37,908 65,406 146,287 186,444 163,792 457,690 1,087,176

Total Lines 82,413 177,876 292,434 612,692 982,301 784,643 457,690 3,390,049

8 Table 1 Analysis of Capital Expenditure 1887-93 Part II

1887 1888 1889 1890 1891 1892 1893 Total £ £ £ £ £ £ £ £ Total Lines 82,413 177,876 292,434 612,692 982,301 784,643 457,690 3,390,049

Working Stock 32,044 48,082 89,215 173,819 295,558 293,413 156,256 1,088,387 Subscriptions to Other Railways Cheshire Lines (5,770) 10,000 5,000 35,000 105,000 120,000 70,000 339,230 W Riding & Grimsby 5,000 2,500 3,000 5,000 15,500 Blackpool 20,122 1,025 46,102 1,509 7,262 6,864 3,460 86,344 Wigan Jct Rly 22,500 22,500 Manchester Sth Jct & Altrincham 5,000 9,000 5,000 19,000 Macclesfield 1,500 3,000 4,500 Liverpool, St Helens & Sth Lancs Jct 25,820 80,880 13,300 120,000 Wrexham, Mold & Connah’s Quay 65,232 65,232 Sheffield & Midland 3,000 3,000 Oldham, Ashton & Guide Bridge 2,500 2,500 Wirral 59,105 75,089 134,194 Wrexham & Ellesmere 37,500 12,500 50,000 Sale of Land at Cornbrook (11,387) (11,387)

Sub Total 19,352 42,525 51,102 36,509 215,314 312,849 172,962 850,613

Docks, Steamboats & Non Railway 129 9,844 9,562 24,346 152,137 53,983 23,129 273,130

Total 133,938 278,327 442,313 847,366 1,645,310 1,444,888 810,037 5,602,179

9 The largest project within Lines Under Construction was the Beighton, Chesterfield & Annesley line, on which £1.457m was spent, some 63 per cent of the total. Its importance in terms of any future London Extension was that it completed a trunk route between Sheffield and Nottingham. However, its was important in other respects, particularly in facilitating the GCR’s involvement in the coal trade in Derbyshire, Nottinghamshire and Yorkshire, with Annesley becoming the exchange point with the London & North Western Railway (LNWR) for South Yorkshire coal.

The second largest project was the redevelopment of Manchester Central station and the link with the existing lines at Fairfield, on which £388k was spent, some 17 per cent of the total. This was the terminus for the services run by the Cheshire Lines Committee (CLC) considered necessary by the GCR to extend services on Merseyside and The Wirral, and into North Wales. The construction of the Chester & Connah’s Quay line during this period was an element of this extension and involved the spending of £263k, some 11 per cent of the total.

Other sizeable projects during the period were the Wigan Central station branch (£114k) and the Houghton Main colliery branch (£72k). The £15k carried forward from lines under construction in 1886 all related to the Wigan Central station branch, thus increasing the total for that project to £129k.

A total of £1.087m was spent on lines open for traffic in the period. In addition to enhancements on the many lines, which had been open for some time, there were also expenditures during the period on the lines above, which had recently been completed, particularly: £k Beighton, Chesterfield & Annesley 270 Chester & Connah’s Quay 85 Manchester Central station 74 Houghton Main colliery branch 19 Wigan Central station branch 13

The total expenditure during the period on lines under the direct control of the GCR was £3.390m, but in addition to this was £851k in subscriptions to the various joint committees and directly to other lines. Again, this was a mixture of monies required for new projects and ongoing expenditures on existing joint committees and other lines. Some £339k or 40 per cent of the total was advanced to the CLC. Advances to other committees or companies with projects closely linked to the CLC were:

£k Wirral 134 Liverpool, St Helens & Sth Lancs Jct 120 Blackpool 86 Wrexham, Mold & Connah’s Quay 65 Wrexham & Ellesmere 50

Not all of the above were near to fruition. The Blackpool scheme would never be built, whereas the Wrexham, Mold & Connah’s Quay (WM&CQ) line, although open, staggered from financial crisis to crisis and had to be rescued from closure by the GCR in 1904.

10 Expenditure on working stock during the period was £1.088m and rose markedly in the years 1890-93, as the newly constructed lines came into operation. Docks, steamboats and other non-railway activities required £273k. The grand total of capital expenditure in the period amounted to £5.602m.

Table 2 gives the Revenue Account for the period 1887-93:

11 Table 2 Revenue Account 1887-93 Part I

1887 1888 1889 1890 1891 1892 1893 £ £ £ £ £ £ £

Total Receipts Passenger Trains 375,844 361,090 385,497 420,100 441,209 459,319 460,414 Freight Trains 1,374,115 1,384,347 1,492,663 1,511,841 1,547,386 1,611,923 1,385,085 Grimsby Docks 35,242 34,553 36,814 38,831 39,523 43,646 41,742 Steamboats 63,311 65,372 73,955 76,380 85,355 83,888 76,411 Canals 76,945 80,229 83,886 83,998 77,004 69,599 56,275 Rents 48,452 49,063 49,384 51,130 53,359 56,229 59,660 Mileage & Demurrage 13,395 14,999 15,074 16,305 17,291 20,132 21,507 Other 3,143 3,078 3,580 4,253 4,867 6,203 5,784 Sub Total 1,990,447 1,992,731 2,140,853 2,202,838 2,265,994 2,350,939 2,106,878

Total Expenditure Maintenance of Way, Works & Stations 113,879 116,058 123,181 129,232 136,319 147,788 149,619 Locomotive Power 183,747 188,160 222,651 265,422 282,902 301,002 305,345 Carriage & Wagon Repairs 75,285 74,105 75,034 76,468 77,990 79,181 77,724

12 Traffic Expenses 329,561 335,983 350,928 371,348 385,253 404,978 409,187 General Charges 50,225 51,547 52,391 54,123 56,644 58,707 58,637 Law Charges 7,327 7,163 6,248 8,248 6,372 5,870 6,260 Parliamentary Expenses 841 1,225 3,519 2,639 3,563 1,714 842 Compensation 56,018 19,717 11,280 10,742 6,377 6,478 7,883 Rates & Taxes 47,464 48,517 48,997 49,045 50,082 49,779 58,939 Government Duty 2,011 1,878 1,975 1,977 1,779 1,666 1,600 C/Fwd 866,358 844,353 896,204 969,244 1,007,281 1,057,163 1,076,036

13 Table 2 Revenue Account 1887-93 Part II

1887 1888 1889 1890 1891 1892 1893 £ £ £ £ £ £ £

B/|Fwd 866,358 844,353 896,204 969,244 1,007,281 1,057,163 1,076,036 Tolls Payable 12,158 11,593 11,761 11,925 12,101 12,091 11,403 Rents Payable 29,105 30,266 30,285 30,319 30,690 30,767 32,050 Ferry Boat Expenses 8,375 8,118 8,661 9,068 9,300 9,461 9,466 Grimsby Docks Expenses 21,908 22,597 24,799 26,572 26,543 26,248 28,252 Canal Expenses 48,651 49,637 51,730 51,882 51,750 44,770 38,710 Steamboat Expenses 51,235 51,176 54,416 60,323 68,471 71,051 74,261 Others 0 0 0 0 0 0 0 Sub Total 1,037,790 1,017,740 1,077,856 1,159,333 1,206,136 1,251,551 1,270,178

Revenue Balance 952,657 974,991 1,062,997 1,043,505 1,059,858 1,099,388 836,700

14 Between 1887 and 1892 total receipts rose steadily if not spectacularly, with the 1892 figure 21 per cent higher than that of 1886 (£1.944m). The year 1893 was affected by a coal strike, which led to a 10 per cent reduction on 1892. The importance of freight traffic is readily apparent. Total expenditure rose in line with the increase in revenue but could not be reduced significantly in the year of the coal strike. The 1893 total was 32 per cent up on 1886 (£0.961m). The revenue balance in 1892 was 12 per cent up on 1886 (£0.983m), but the 1893 figure was 15 per cent lower.

It should be noted that the reporting formats set out in the Regulation of the Railways Act 1868 (the 1868 Act) required the results of joint lines to be shown in the Net Revenue Account, as was depreciation on the steamboats. The above table thus does not give the full picture as regards operational results.

Table 3 gives the Net Revenue and Appropriation Account for the years 1887-93:

15 Table 3 Net Revenue & Appropriation Account 1887-93 Part I

1887 1888 1889 1890 1891 1892 1893 £ £ £ £ £ £ £ Receipts B/Fwd Balance 2,422 2,050 2,184 2,519 4,334 2,111 2,623 Balance Revenue Account 952,657 974,991 1,062,997 1,043,505 1,059,858 1,099,388 836,700 Joint Line Net Receipts Manchester Sth Jct & Altrincham 28,835 25,948 26,612 25,540 25,083 26,116 26,852 W Riding & Grimsby 21,690 23,812 27,556 26,877 30,664 32,010 30,036 Sheffield & Midland 18,126 18,037 20,280 24,277 23,363 21,391 17,812 Cheshire Joint Lines 52,806 51,176 57,182 62,971 59,847 56,285 51,841 Macclesfield 0 181 837 1,078 2,402 2,381 4,175

General Interest Receivable 4,435 4,375 4,375 5,393 11,571 14,124 7,196 Sub Total 1,080,971 1,100,570 1,202,023 1,192,160 1,217,122 1,253,806 977,235 Expenditure Interest on Debentures Stock 342,039 342,042 343,989 348,049 376,231 380,091 384,590 Interest on Loans 1,820 1,810 1,792 1,778 1,778 1,778 1,778 Joint Line Net Expenses Oldham, Ashton & Guide Bridge 2,605 4,522 2,623 1,302 3,644 3,400 2,899 Macclesfield 154 0 0 0 0 0 0

General Interest 440 3,891 4,091 552 5,361 Steamship Depreciation 2,000 2,000 2,500 5,000 5,000 5,000 5,000 Other 1,000 Sub Total 350,058 354,265 354,995 356,681 386,653 390,269 399,628

Transfer to/(from) Reserve

Balance Available for Dividends 730,913 746,305 847,028 835,479 830,469 863,537 577,607

16 Table 3 Net Revenue & Appropriation Account 1887-93 Part II

1887 1888 1889 1890 1891 1892 1893 £ £ £ £ £ £ £

Balance Available for Dividends 730,913 746,305 847,028 835,479 828,250 863,537 577,607

Preference Stocks 646,474 648,002 659,137 682,319 709,424 771,660 577,476 Preferred Ordinary Stock 60,472 71,616 126,315 117,875 91,858 70,795 0 Ordinary Stock 21,917 24,503 43,261 33,170 24,857 18,459 0 Deferred Ordinary Stock 0 0 15,796 0 0 0 0

Sub Total 728,863 744,121 844,509 833,364 826,139 860,914 577,476

Balance C/Fwd 2,050 2,184 2,519 2,115 2,111 2,623 131

% Dividend on Preferred Ordinary Stock 1.75 1.75 3.625 3.125 2.25 1.75 0 % Dividend on Ordinary Stock 1.5 1.75 3.375 2.75 2.125 1.625 0 % Dividend on Deferred Ordinary Stock 0 0 0.75 0 0 0 0

17 In comparison with the revenue balance from the lines wholly owned by the GCR, the aggregate revenue balances from the joint lines was much smaller. The total for 1886 was £107k and this had increased to £135k by 1892, by some 26 per cent. The 1893 figure was lower as a result of the coal strike. The joint lines were a mixed bag with the CLC regularly producing a revenue balance in excess of £50k and the Oldham, Ashton & Guide Bridge (OA&GB) regularly making a loss of a few thousand pounds. The other operational item in the Net Revenue Account was depreciation on the steamships, which was £2k in 1887 rising to £5k by 1893.

One of the largest items in the Net Revenue Account was interest on debenture and other long-term loans. The figure amounted to £341k in 1886 rising to £386k in 1893, as more debentures were issued to fund the capital programme. The majority of the debentures had an interest rate of 4½ per cent, higher than some of the leading railway companies such as the Midland Railway (MidR). This interest had to be paid, before any dividends could be paid to shareholders and, together with the fixed rate dividends on the preference shares issued as outlined below, placed a heavy burden on the GCR’s finances, before dividends could be paid to the ordinary shareholders.

The remaining items in the Net Revenue Account were mainly interest payable and receivable on short term loans and deposits used for working capital purposes.

From 1887-92, the dividends for the preference shareholders were paid in full. As more stock was issued the cost rose from £646k to £772k per annum. In 1893, because of the poor operating results, it was only possible to pay the preference shareholders in full for the first half of the year. In the second half, it was only possible to pay preference share dividends on those shares issued before 1872, a reduction of £194k. The preference shares were issued in tranches over the life of the GCR and at varying rates of interest ranging from 3¼-6 per cent, with the average just over 4½ per cent, again higher than some of the leading railway companies. There had been a period 1872-81 when the prevailing rate was 5 per cent, but the situation had improved and the rate for the issues in 1889 and 1891 was 4 per cent. It can be seen that the fixed burden of interest on debentures, loans and preference shares in 1892, when everything was paid in full, amounted to £1.154m and it only needed adverse trading conditions as in 1893 to cut back on these payments.

The GCR ordinary shares were of three types, preferred ordinary shares, normal ordinary shareholders and deferred ordinary shareholders. Dividends were paid on a half yearly basis and the figures above are the arithmetic average of the two payments. The preferred ordinary shareholders had a dividend of 1¾ per cent in 1887, rising to 3⅝ per cent in 1889 and falling back to 1¾ per cent in 1892. It was a similar trend for ordinary shareholders with 1½ per cent in 1887, rising to 3⅜ per cent in 1889 and falling back to 1⅝ per cent in 1892. The deferred ordinary shareholders only received a dividend of ¾ per cent in 1889 and this was to be their last dividend, before the GCR became part of the London & North Eastern Railway (LNER) in 1923. No payments to any of the ordinary shareholders were possible in 1893.

18 4. Construction of the London Extension Phase I 1894-99

The years 1894-99 were dominated by the construction of the London Extension from Annesley to Marylebone via Aylesbury and the MR main line. The line opened in various stages to coal, passenger and other freight traffic during the course of 1899 and for convenience the whole of that year is treated as part of the construction phase. The term Phase I is used, because by the end of the period the GCR Board had decided that the line via Aylesbury was not suitable for all of its traffic and negotiations had started with the GWR for use of an alternative route into London via High Wycombe. This latter route would not be fully open until 1906 and in effect the years 1900-06 were Phase II of Extension project.

The six years 1894-99 provide an indication of how the GCR coped with the problems of the main Phase of the Extension project. The increases in capital authorised and created and the amount received into the capital account over the period were as follows:

31 December 1893 31 December 1899 Increase £m £m £m Capital Authorised & Created Shares 23.301 35.433 12.132 Loans 9.097 12.966 3.869

Total 32.398 48.399 16.001

Amount Received into Capital Account Shares 23.004 30.281 7.277 Loans 8.622 11.280 2.658 Miscellaneous 0.004 - (0.004)

Total 31.630 41.561 9.931

As mentioned above, in 1894, £6.2m of ordinary stock was authorised and created specifically for the London Extension. In addition, a further £3.1m issue of 4 per cent preference shares was made and further debentures issued with a 4½ per cent coupon.

The total amount spent on capital account by the end of 1899 was £45.386m made up of:

19 £m Lines in the course of construction 0.233 Lines open for traffic 28.138 Working stock 5.162 Subscriptions to other railways 7.595 Docks, steamboats and other non-railway items 4.258

Total 45.386

By the end of 1899, the £10.632m spent on the London Extension during the period was transferred to lines open for traffic, leaving only £233k in lines under construction all relating to the Banbury Branch. The latter was an important part of the London Extension project, allowing freight trains to be run over GWR metals to a variety of destinations via Banbury.

The capital expenditure 1894-99 was made up of the following:

20 Table 4 Analysis of Capital Expenditure 1894-99 Part 1

1894 1895 1896 1897 1898 1899 Total £ £ £ £ £ £ £ Lines Under Construction London Extension 842,328 2,740,493 3,215,402 2,163,395 1,670,697 10,632,315 Banbury Branch 124,260 108,872 233,132 Neasden-Northolt 358 358 Sub Total 842,328 2,740,493 3,215,402 2,163,395 1,794,957 109,230 10,865,805

Lines Open for Traffic Land Purchase 72,215 102,302 16,451 11,414 5,586 42,497 250,465 Construction of Way & Stations 148,556 41,072 59,286 79,588 76,960 875,552 1,281,014 Law & Parliamentary 1,721 1,233 1,174 2,183 559 5,664 12,534 Interest 16,786 16,786 Other 746 3,021 3,767 Sub Total 222,492 144,607 76,911 93,931 83,105 943,520 1,564,566

Total Lines 1,064,820 2,885,100 3,292,313 2,257,326 1,878,062 1,052,750 12,430,371

21 Table 4 Analysis of Capital Expenditure 1894-99 Part II

1894 1895 1896 1897 1898 1899 Total £ £ £ £ £ £ £ Total Lines 1,064,820 2,885,100 3,292,313 2,257,326 1,878,062 1,052,750 12,430,371

Working Stock 61,675 63,665 101,611 28,436 22,385 1,172,000 1,449,772 Subscriptions to Other Railways Cheshire Lines 43,800 40,000 7,000 18,000 14,000 122,800 W Riding & Grimsby 2,500 3,000 5,500 Blackpool (680) 50,250 29,700 7 9,270 Wigan Jct Rly 50 (141,720) (141,670) Manchester Sth Jct & Altrincham 9,000 15,420 8,520 3,000 2,000 37,940 North Wales & Liverpool 10,000 10,000 Oldham, Ashton & Guide Bridge 3,000 3,000 Wirral 17,361 17,361 Dee & Birkenhead 30,000 30,000 GWR & GCR Jt Committee 112,500 112,500

Sub Total 69,481 75,500 72,720 56,220 (135,720) 138,500 276,701

Docks, Steamboats & Non Railway 68,014 151 9,714 29,744 68,983 40,929 217,535 Premiums on Stocks & Shares (95,999) (95,999) Other (600,000) (600,000)

Total 13,678,3 1,263,990 2,424,416 3,476,358 2,371,726 1,833,710 2,308,180 80

22 One thing that is particularly striking about Table 4 is the scale of the total capital expenditure compared to Table 1. In the seven years covered by Table 1, the total was £5.602m compared with £13.678m in the six years covered by Table 4, an increase approaching 150 per cent. This would probably have been a stretch for any of the contemporary railway companies. As might be expected, the £10.632m spent in lines under construction for the London Extension towered over all other items. As mentioned above, the only other line under construction during the period was the Banbury Branch. At the end of the period, a small amount had also been spent on the Neasden-Northolt line, which would be the link with the joint line with the GWR. Although the £10.632m was transferred to lines open for traffic in 1899, there were other expenditures on the London Extension in the latter category during that year of £768k. It is not clear whether this amount and other amounts spent in 1900 and beyond were part of the original scope of the project or enhancements. One aspect of this was the delay in completing the four-track bridge over the London & North Western Railway (LNWR) at Northwick Park. The amounts reported include interest of £909k on the capital involved. Capitalisation of interest was not banned by the Board of Trade and the GCR was not unique amongst railway companies in using it. However, the Board kept a watchful eye on the practice, as there had been instances in the past where short-term profits, dividends and share prices had been boosted by improper use of the practice. As depreciation of railway assets was not carried out at this time, such interest charges were never charged in the Net Revenue Account. One consequence of this was, when the Extension was opened for traffic, interest on the securities previously deferred was then charged in the Net Revenue Account. Consequently, interest on debentures rose from £412k in 1898 to £516k in 1900 with the resulting pressure on the amount available for dividends.

Other expenditures on lines open for traffic were slightly lower per annum than in the period compared with 1887-93. Expenditures on lines recently completed in the period 1887-93 were:

£k Beighton, Chesterfield & Annesley 115 Houghton Main colliery branch 13 Chester & Connah’s Quay 3 Manchester Central station 2 Wigan Central station branch 1

1 Subscriptions to other railways during the period of £277k were only about /3 of that 1887-93 net of a refund of £142k from the Wigan Junction Railway. As in the previous period, a number of the advances related to the CLC and its adjuncts:

£k CLC 123 Dee & Birkenhead 30 Wirral 17 North Wales & Liverpool 10

However, perhaps the most significant advance was the £113k to the Great Western Railway & Great Central Railway Committee (GWR&GCR). This would be the vehicle through

23 which the expenditures on the Northolt Junction-Ashendon Junction part of Phase II of the London Extension would be made.

Expenditures on working stock in the period were higher than 1887-93 mainly due to the £1.172m spent in 1899, when the London Extension came into use. Expenditures on docks, steamboats and other non-railway activities were lower than 1887-93 at £218k. This excluded the £600k received from the sale of the GCR’s South Yorkshire Canals in 1895. Premiums on the issue of stocks and shares of £96k were also credited.

Table 5 gives the Revenue Account for the period 1894-99:

24 Table 5 Revenue Account 1894-99 Part I

1894 1895 1896 1897 1898 1899 £ £ £ £ £ £ Total Receipts Passenger Trains 595,548 590,114 614,881 623,721 643,331 758,696 Freight Trains 1,552,849 1,575,514 1,645,927 1,685,908 1,780,873 1,940,013 Grimsby Docks 49,307 48,682 52,429 53,717 57,689 60,159 Steamboats 86,745 85,713 84,016 90,605 88,401 108,077 Canals 69,850 17,201 14,702 12,508 12,861 13,113 Rents 61,037 59,173 60,219 62,419 63,360 88,488 Mileage & Demurrage 25,805 24,788 23,112 28,871 32,268 28,847 Other 5,403 5,725 5,293 6,692 5,953 7,641 Sub Total 2,446,544 2,406,910 2,500,579 2,564,441 2,684,736 3,005,034

Total Expenditure Maintenance of Way, Works & Stations 157,417 147,806 166,971 176,567 191,451 215,156 Locomotive Power 334,162 317,031 356,106 377,369 420,036 590,570 Carriage & Wagon Repairs 85,765 83,958 90,424 99,668 118,719 150,302 Traffic Expenses 430,384 434,000 447,766 479,014 503,107 635,628

25 General Charges 60,712 61,946 65,156 66,767 70,323 80,224 Law Charges 6,373 6,315 6,776 6,820 6,709 8,410 Parliamentary Expenses 1,395 1,365 2,506 3,435 2,409 1,631 Compensation 7,482 6,697 7,163 7,526 11,445 23,779 Rates & Taxes 62,049 68,818 75,544 77,147 79,117 94,438 Government Duty 1,602 1,606 1,580 1,648 1,688 1,952 C/Fwd 1,147,341 1,129,542 1,219,992 1,295,961 1,405,004 1,802,090

26 Table 5 Revenue Account 1894-99 Part II

1894 1895 1896 1897 1898 1899 £ £ £ £ £ £

B/|Fwd 1,147,341 1,129,542 1,219,992 1,295,961 1,405,004 1,802,090 Rents Payable 29,552 30,000 31,172 32,767 34,390 41,043 Ferry Boat Expenses 9,391 9,386 9,190 9,086 9,257 9,180 Grimsby Docks Expenses 31,269 30,382 34,863 33,114 31,958 33,511 Canal Expenses 39,015 24,529 22,873 22,436 22,462 21,895 Steamboat Expenses 78,061 73,823 74,393 77,283 80,726 83,492 Others Sub Total 1,334,629 1,297,662 1,392,483 1,470,647 1,583,797 1,991,211

Revenue Balance 1,111,915 1,109,248 1,108,096 1,093,794 1,100,939 1,013,823

27 Gross revenue resumed its upward growth, after the strike in 1893. Between 1892 and 1898, the year before the London Extension opened, it grew from £2.351m to £2.685m, by 14 per cent. However, the 1899 figure was £3.005m, nearly 12 per cent up on 1898. This reflected new traffic generated by the Extension, although the full year effect would not be felt until 1900. Both freight and passenger revenue benefitted, although passenger revenue rose to a greater extent than freight. Rents rose from £63k to £88k between 1898 and 1899, by nearly 40 per cent, as the new stations on the Extension provided additional premises to offer for rent. Canal revenues fell sharply between 1894 and 1895 following the sale of the South Yorkshire Canals in that year.

Total expenditure rose from £1.270m in 1893 to £1.584m in 1898, by nearly 25 per cent, but the increase to £1.991m in 1899 was a further 26 per cent. The most notable increases were in locomotive power, carriage & wagon repairs and traffic expenses. Canal expenses did not fall proportionately with revenues after the sale the South Yorkshire Canals in 1895 and the remaining canals showed a deficit of £7-10k from 1895-99.

The revenue balance recovered from the setback in 1893 and remained around the 1892 figure of £1.100m up to 1898, showing little effect from the capital investments 1887-93. The figure fell to £1.014m in 1899, by 8 per cent, not responding to a part year of traffic from the London Extension.

Table 6 gives the Net Revenue and Appropriation Account for the years 1894-99:

28 Table 6 Net Revenue & Appropriation Account 1894-99 Part 1

1894 1895 1896 1897 1898 1899 £ £ £ £ £ £ Receipts B/Fwd Balance 131 2,538 4,247 2,400 2,207 5,268 Balance Revenue Account 1,111,915 1,109,248 1,108,096 1,093,704 1,100,939 1,013,823 Joint Line Net Receipts Manchester Sth Jct & Altrincham 28,987 29,792 31,247 32,944 34,466 37,794 W Riding & Grimsby 35,069 35,963 36,119 35,883 38,061 41,397 Sheffield & Midland 22,244 24,298 30,932 32,817 33,963 37,577 Cheshire Joint Lines 61,890 63,426 73,541 73,821 76,067 82,742 Macclesfield 2,732 2,382 2,509 2,924 3,028 4,089 Nth Wales & Liverpool 1.168 754

General Interest Receivable 4,375 4,376 4,375 4,374 4,375 875 Other 3,466 Sub Total 1,267,343 1,272,023 1,291,066 1,278,867 1,294,274 1,227,785 Expenditure Interest on Debentures Stock 393,590 393,500 393,590 404,225 410,468 481,425 Interest on Loans 1,778 1,778 1,778 1,778 1,778 1,778 Joint Line Net Expenses Oldham, Ashton & Guide Bridge 2,406 500 1,070 909 1,135 2,095 Nth Wales & Liverpool 601 1,162

Interest on Lloyds Bonds 29,870 93,770 General Interest 9,761 7,772 6,894 11,308 15,944 47,142 Steamship Depreciation 5,000 5,000 5,000 5,000 5,000 5,000 Sub Total 412,535 408,640 408,933 424,382 464,195 631,210

Transfer to/(from) Reserve 7,000 7,000 7,000 7,000 7,000 (35,000)

Balance Available for Dividends 847,808 856,383 875,133 847,485 823,079 631,575

29 Table 6 Net Revenue & Appropriation Account 1894-99 Part 1I

1894 1895 1896 1897 1898 1899 £ £ £ £ £ £

Balance Available for Dividends 847,808 856,383 875,133 847,485 823,079 631,575

Preference Stocks 804,076 804,077 804,076 804,077 804,076 630,376 Preferred Ordinary Stock 33,204 38,931 56,130 38,835 13,735 Ordinary Stock 7,990 9,128 12,527 2,366 Deferred Ordinary Stock

Sub Total 845,270 852,136 872,733 845,278 817,811 630,376

Balance C/Fwd 2,538 4,247 2,400 2,207 5,268 1,199

% Dividend on Preferred Ordinary Stock 0.75 0.875 1.75 1.5 0.25 0 % Dividend on Ordinary Stock 0.75 0.875 1.25 0.25 0 0 % Dividend on Deferred Ordinary Stock 0 0 0 0 0 0

30 Ignoring the 1893 net balance from the joint lines, which was affected by the coal strike, the balance in 1899 of £202k was 50 per cent up on 1892’s £135k. Although a new joint line, the North Wales & Liverpool (NW&L), was included from 1896, its net balance in 1899 was fairly minimal. The largest increases were recorded by the Manchester South Junction & Altrincham (MSJ&A), Sheffield & Midland (S&MidR) and the CLC. Steamship depreciation was a regular £5k per annum during the period.

Interest on debentures and other loans continued to be one of the largest items in the Net Revenue Account. The total rose from £386k in 1893 to £483k in 1899, as more debentures were issued to fund the London Extension. The new debentures had an interest rate of 4½ per cent, the same as in the preceding period.

The remaining items in the Net Revenue Account were mainly interest payable and receivable on short term loans and deposits used for working capital purposes. However, interest payable increased substantially in 1898-99. Partly this was due to the GCR raising funds via Lloyds Bonds, a commonly used form of short-term financing used by railway companies in the Victorian era. The interest on these amounted to £94k in 1899. General interest on short term bank loans, which had been below £10k up to 1896 rose sharply in the following three years and totalled £47k in 1899. This resort to short term borrowing indicates how the cost of the London Extension was squeezing the GCR’s finances.

In the years 1894-98, £7k per annum was transferred to the reserves to provide for possible cost increases relating to the London Extension. The whole of the £35k so provided had to be transferred back to the Net Revenue Account in 1899 to meet such costs.

From 1894-98, the dividends for the preference shareholders were paid in full, after the problems of 1893. As more stock was issued the cost rose from £772k per annum in 1892 to £804k in 1898. In 1899, because of the poor operating results, it was only possible to pay the preference shareholders of shares issued up to 1889 in full for the first half of the year and in the second half, it was only possible to pay preference share dividends on those shares issued before 1876. Together this resulted in a reduction of £174k on 1898. In that year, the fixed burden of interest on loans and debentures and dividends on preference shares amounted to £1.216m and in 1899 this burden was not sustainable.

It was possible to resume payment of dividends for the preferred ordinary shareholders and the ordinary shareholders in 1894. Both categories of shares received ¾ per cent in that year. Increases were possible up to 1896, when the preferred ordinary shareholders received 1¾ per cent and the ordinary shareholders 1¼ per cent. Payments tailed off thereafter with the preferred ordinary shareholders receiving nothing after the first half of 1898 and the ordinary shareholders nothing after the first half of 1897.

5. Construction of the London Extension Phase II 1900-06

As explained above, the years 1900-06 were dominated by the project to build a joint line with the GWR from Northolt Junction to Ashendon Junction and the connecting lines from Neasden Junction to Northolt Junction and from Ashendon Junction to Grendon Underwood Junction. Apart from the amount to complete the Banbury Branch and a small amount on the Grimsby & District Light Railway (GDLR), the remainder of the amount spent by the GCR 31 on lines under construction during the period was for the two connecting lines. Similarly, the major part of the subscriptions to other railways was made up of the advances to the GWR&GCR for the main line. Although the whole system was available for freight traffic in late 1905, passenger traffic did not start until April 1906. Thus, the years 1900-06 are treated as the construction period of Phase II.

This period shows how the problems the GCR faced in Phase I continued into Phase II and in some ways were exacerbated by the latter. The increases in capital authorised and created and the amount received into the capital account over the period were as follows:

31 December 1899 31 December 1906 Increase £m £m £m Capital Authorised & Created Shares 35.433 35.433 - Loans 12.966 20.988 8.022

Total 48.399 56.421 8.022

Amount Received into Capital Account Shares 30.281 30.365 0.084 Loans 11.280 17.672 6.392

Total 41.561 48.037 6.476

Virtually all the additional capital raised during Phase II was from debentures. These had a 3½ per cent coupon and had to be issued at a substantial discount.

The total amount spent on capital account by the end of 1906 was £51.734m made up of:

£m Lines in the course of construction 0.006 Lines open for traffic 33.711 Working stock 6.855 Subscriptions to other railways 6.851 Docks, steamboats and other non-railway items 4.574 Capital repayable to GCR & MidR Committee (263)

Total 51.734

By the end of 1900, the Banbury Branch had been completed and the £266k spent on the work, including the £233k spent before 1900, was transferred to lines open for traffic. Between 1900 and 1905, expenditure was mainly on the two elements of Phase II of the London Extension, Neasden Junction to Northolt Junction and Ashendon Junction to Grendon Underwood Junction, £528k on the former and £127k on the latter. In 1906, expenditure began on the GDLR.

The capital expenditure during the period 1900-06 was made up as follows:

32 Table 7 Analysis of Capital Expenditure 1900-06 Part 1

1900 1901 1902 1903 1904 1905 1906 Total £ £ £ £ £ £ £ £ Lines Under Construction Banbury Branch 32,101 32,101 Neasden-Northolt 73,889 59,940 70,871 78,112 110,321 134,939 528,072 Grendon Underwood- Ashendon 2,291 219 18,216 36,897 35,958 33,917 127,498 Grimsby District Light Rly 6,231 6,231 Sub Total 108,281 60,159 89,087 115,009 146,279 168,856 6,231 693,902

Lines Open for Traffic Land Purchase 36,640 (627) 5,700 13,706 43,058 24,748 24,124 147,349 Construction of Way & Stations 413,269 119,929 89,150 35,527 83,387 158,321 494,725 1,394,308 Law & Parliamentary 2,747 2,884 1,865 3,824 4,764 16,084 Other 4,600 3,970 30,582 493 71,004 (36,279) 18,764 93,134 Sub Total 457,256 126,156 127,297 49,726 197,449 150,614 542,377 1,650,875

Amalgamations Nth Wales & Liverpool 258,909 258,909 Buckley Rly 92,389 92,389 Wrexham, Mold & Connor’s Quay inc Working Stock 538,998 538,998 Wigan Jct 283,972 283,972 St Helens 359,037 359,037

Total Lines 565,537 186,315 216,384 164,735 343,728 1,209,766 1,191,617 3,878,082

33 Table 7 Analysis of Capital Expenditure 1900-06 Part II

1900 1901 1902 1903 1904 1905 1906 Total £ £ £ £ £ £ £ £ Total Lines 565,537 186,315 216,384 164,735 343,728 1,209,766 1,191,617 3,878,082

Working Stock 385,904 162,068 314,903 185,897 149,104 244,798 232,589 1,675,263 Subscriptions to Other Railways Cheshire Lines 12,000 22,000 20,000 12,000 66,000 W Riding & Grimsby 6,000 6,000 GCR & MidR 17,000 5,000 (4,959) 17,041 Blackpool (47,000) (17,691) (64,691) Manchester Sth Jct & Altrincham 28 20,000 20,028 North Wales & Liverpool 4,000 4,000 South Yorks 3,500 4,000 40,000 47,500 Oldham, Ashton & Guide Bridge 5,000 6,350 11,350 Shireoaks & Laughton 3,500 14,500 14,000 32,000 GWR & GCR 31,906 43,921 118,596 153,405 176,786 195,181 62,021 781,816 Hull & Barnsley & GCR 1,000 1,000 Sale of Joint Property (36,508) (34,630) (71,138)

Sub Total 52,934 72,271 81,096 131,397 196,656 224,181 92,371 850,906 Docks, Steamboats & Non Railway 16,107 15,900 1,387 60,940 11,472 49,497 160,833 316,136 Discount on New Debenture Stock 642,465 642,465 Capital Repayable GCR & (1, MidR (1,015,000) 015,000) Total 1,662,947 436,554 613,770 542,969 700,960 1,728,242 662,410 6,347,852

34 In the seven years covered by Table 7, the total capital expenditure of £6.348m returned to nearer the level in the 1887-93 of £5.602m and was 49 per cent lower than in the six years of the main expenditures on the London Extension. Even so, expenditures on Phase II comprised a significant part of the total for 1900-06. Of the amount spent on lines under construction, £655k was spent on the Neasden Junction to Northolt Junction and Grendon Underwood Junction to Ashendon Junction lines, with the remainder being the amount to complete the Banbury Branch and initial expenditure on the GDLR. Within the £851k spent on subscriptions to other railways £782k was to the GWR&GCR for the line between Northolt Junction and Ashendon Junction.

Expenditures on lines open for traffic in the seven years 1900-06 at £1.651m was similar to the £1.565m for the six years 1894-99. Expenditures on lines recently completed in the period 1894-99 were:

£k London Extension 280 Banbury Branch 50 Houghton Main colliery branch 62

Within subscriptions to other railways £70k was advanced to the CLC and the NW&L. There were also advances to new lines; £48k to the South Yorkshire Railway (SYR), £35k to the Shireoaks, Laughton & Maltby Railway (SL&MR) and £1k to the Hull & Barnsley Railway & GCR (H&BR&GCR). All these three were short colliery related lines. The SL&MR became part of the S&MidR in 1904 and the latter changed its name to the GCR & Midland Railway (GCR&MidR). There were also two credits, £65k from the Blackpool Railway, which was never built, and £71k from the sale of joint properties.

A number of amalgamations took place during the period. This involved the GCR, which had previously been an investor in a railway company and in some cases proving additional assistance such as provision of working stock, taking over the whole company and merging its operations with its other wholly owned lines. In 1905, the NW&L, the Buckley and the WM&CQ were taken over at a cost of £890k. In 1906, the Wigan Junction and St Helens Railways were acquired at a cost of £643k. These amalgamations increased the penetration of the CLC and strengthened the GCR’s position on Merseyside and in North East Wales.

Expenditures on working stock during the period at £1.675m were 16 per cent up on the £1.450m spent 1894-99, mainly reflecting the additional operations generated by the London Extension. Expenditures on docks, steamboats and other non-railway activities at £316k during the period were 45 per cent up on 1894-99. Over half the 1900-06 expenditure was made in 1906, when the development of a new dock at Immingham got under way, although the bulk of the cost was to be financed by a separate company, as explained below. The issue of new debentures completed in 1900 was only accomplished by offering a discount on the nominal value, which totalled £642 and was added to capital expenditure. In 1906, following the change of name of the S&MidR to GCR&MidR, adjustments were made to the financial arrangements and a credit of £1.015m was included for capital repayable to the GCR.

Table 8 gives the Revenue Account for the period 1900-06:

35 Table 8 Revenue Account 1900-06 Part I

1900 1901 1902 1903 1904 1905 1906 £ £ £ £ £ £ £ Total Receipts Passenger Trains 853,700 904,755 953,731 1,002,218 1,031,545 1,064,712 1,121.097 Freight Trains 2,069,976 2,021,420 2,148,096 2,190,593 2,239,469 2,452,548 2,631,143 Grimsby Docks 62,267 61,784 67,549 69,107 69,428 70,973 75,383 Steamboats 119,274 108,831 115,482 118,064 118,660 116,998 133,213 Canals 12,340 11,902 11,906 11,930 10,999 10,922 11,316 Rents 92,378 96,727 98,871 100,097 106,053 109,555 112,111 Mileage & Demurrage 21,662 19,688 16,444 17,205 20,830 22,063 22,955 Other 6,627 5,357 6,155 5,176 5,909 5,986 5,841 Sub Total 3,238,224 3,230,464 3,418,234 3,514,390 3,602,893 3,853,757 4,113,059

Total Expenditure Maintenance of Way, Works & Stations 249,921 252,296 274,695 283,685 289,763 330,500 364,366 Locomotive Power 724,010 669,286 645,178 657,754 663,957 695,799 737,843 Carriage & Wagon Repairs 191,134 183,735 191,492 207,484 222,106 240,077 252,771 Traffic Expenses 715,085 723,581 749,468 757,930 756,499 787,978 837,602

36 General Charges 82,852 85,586 86,162 88,759 91,739 97,880 103,661 Law Charges 9,270 9,333 9,879 10,246 10,258 10,396 9,808 Parliamentary Expenses 880 2,390 3,207 3,572 4,707 5,392 5,230 Compensation 37,452 32,939 33,304 26,205 27,426 27,894 32,607 Rates & Taxes 101,149 104,329 108,552 112,794 120,237 128,266 129,588 Government Duty 2,229 2,465 2,580 2,790 2,829 2,984 3,302 C/Fwd 2,113,982 2,065,940 2,104,517 2,151,219 2,189,521 2,327,166 2,476,778

37 Table 8 Revenue Account 1900-06 Part II

1900 1901 1902 1903 1904 1905 1906 £ £ £ £ £ £ £

B/|Fwd 2,113,982 2,065,940 2,104,517 2,151,219 2,189,521 2,327,166 2,476,778 Rents Payable 46,072 46,544 46,777 47,283 48,863 51,098 53,240 Ferry Boat Expenses 9,754 9,704 10,700 11,099 12,049 12,821 13,798 Grimsby Docks Expenses 35,393 32,534 33,551 32,905 33,196 36,019 38,703 Canal Expenses 22,112 22,332 22,932 23,256 22,880 21,846 22,089 Steamboat Expenses 88,907 89,113 94,115 98,074 99,883 100,123 107,609 Others Sub Total 2,316,220 2,266,167 2,312,592 2,363,836 2,406,392 2,549,073 2,712,217

Revenue Balance 922,004 964,297 1,105,642 1,150,554 1,196,501 1,304,684 1,400,842

38 Gross revenue showed strong growth during the period rising from £3.005m in 1899 to £4.113m in 1906, by 37 per cent, by which time both Phases of the London Extension were completed. Passenger revenue continued to benefit more than freight revenue, the increases being 48 percent and 36 per cent respectively. Not all the growth in gross revenues was attributable to traffic on the London Extension and there were significant increases in rents, Grimsby Docks and steamboats, by 27, 25 and 23 per cent respectively. Total expenditure rose from £1.991m in 1899 to £2.712m in 1906, by 36 per cent. The most noticeable increases were in maintenance of way, works and stations; and carriage and wagon repairs. The canals continued to make a loss averaging £11k per annum. The revenue balance, which had reached £1.014m in 1899, fell back in 1900 and 1901 and did not exceed that level until 1902. Growth resumed thereafter and the 1906 total at £1.401m was 38 per cent up on 1899. Table 9 gives the Net Revenue and Appropriation Account for the years 1900-06:

39 Table 9 Net Revenue & Appropriation Account 1900-06 Part 1

1900 1901 1902 1903 1904 1905 1906 £ £ £ £ £ £ £ Receipts B/Fwd Balance 1,199 923 1,642 3,840 5,678 6,232 7,045 Balance Revenue Account 922,004 964,297 1,105,642 1,150,554 1,196,501 1,304,684 1,400,842 Joint Line Net Receipts Manchester Sth Jct & Altrincham 38,232 39,231 40,667 38,660 39,457 40,044 37,806 W Riding & Grimsby 43,325 40,727 46,015 50,126 47,675 44,115 45,812 GCR & MidR 37,360 36,515 34,638 34,515 37,302 37,077 37,324 Cheshire Joint Lines 65,554 70,895 78,150 79,751 76,038 80,432 87,341 Macclesfield 3,851 5,315 4,277 4,368 4,676 4,071 4,263 Nth Wales & Liverpool 1,560 2,880 3,633 4,079 GWR & GCR 19,474 MR & GCR 1,221

Sub Total 1,111,525 1,159,463 1,313,911 1,365,447 1,411,406 1,516,655 1,641,128 Expenditure Interest on Debentures Stock 515,892 533,158 572,056 589,251 622,326 677,253 719,211 Interest on Loans 1,778 1,778 1,778 1,778 1,778 1,778 1,778 Joint Line Net Expenses Oldham, Ashton & Guide Bridge 4,274 4,622 3,283 4,550 4,317 3,812 4,053 Nth Wales & Liverpool 81 Rents MR Harrow-Canfield Place 16,699 MR & GCR 23,019

Interest on Lloyds Bonds 112,629 110,318 80,444 71,262 58,050 44,770 38,370 Nottingham Jt Stn Interest on GNR Advance 6,864 17,178 17,210 17,554 17,554 17,553 17,553 Banbury Branch & Joint Line Interest on GWR Advances 3,522 9,813 9,819 9,812 9,812 9,812 36,147 Hire of Working Stock 44,000 44,000 44,000 41,875 33,375 24,875 16,375 General Interest 9,686 13,977 13,105 17,111 23,786 28,006 34,388 Steamship Depreciation 5,000 2,500 Sub Total 703,726 737,344 741,695 753,193 770,998 807,859 907,593 40 Table 9 Net Revenue & Appropriation Account 1900-06 Part 1I

1900 1901 1902 1903 1904 1905 1906 £ £ £ £ £ £ £

Expenditure 703,726 737,344 741,695 753,193 770,998 807,859 907,593 Transfer to/(from) Reserve (8,000)

Balance Available for Dividends 407,799 430,119 572,216 612,254 640,408 708,796 733,535

Preference Stocks 406,876 428,477 568,376 606,576 634,176 701,751 726,027 Preferred Ordinary Stock Ordinary Stock Deferred Ordinary Stock

Sub Total 406,876 428,477 568,376 606,576 634,176 701,751 726,027

Balance C/Fwd 923 1,642 3,840 5,678 6,232 7,045 7,508

% Dividend on Preferred Ordinary Stock 0 0 0 0 0 0 0 % Dividend on Ordinary Stock 0 0 0 0 0 0 0 % Dividend on Deferred Ordinary Stock 0 0 0 0 0 0 0

41 The net balance from the joint lines, increased from £203k in 1899 to £229k in 1906, by 13 per cent. Most of this change took place in 1906, when the net balances from the GWR&GCR and the Metropolitan Railway & GCR Joint Committee (MR&GCR), were included for the first time. The contribution from the NW&L ceased from 1904, when it was amalgamated with the GCR. Also relating to the joint lines, two sets of rents started in 1906, the rent to the MR for the two tracks from Harrow South Junction to Canfield Place of £17k per annum and the rent to the MR&GCR of £23k per annum for the joint lines north of Harrow. It should be mentioned that the provisions of joint committee agreements varied considerably, dependent on the circumstances of the companies involved. The MR&GCR is a case in point as described in Alan Jackson’s London’s Metropolitan Railway7. The agreement followed a long running dispute between the two companies about the adverse effect on passenger receipts from Central London to stations north of Harrow of the GCR’s decision to develop the joint line with GWR via High Wycombe and included provisions compensating the MR. During Phase II of the London Extension project, the GCR also incurred interest charges on advances made by two partner companies. The GNR made an advance to the GCR for the joint station at Nottingham, which incurred annual interest charges of £18k. The GWR made a similar advance for the Banbury Branch, which incurred annual interest charges of £10k. Also, between 1906-08, the GWR made an advance for the GCR’s share of the joint line, which incurred an annual interest charge of £26k at its peak in 1906. Part of the cost of new working stock for the London Extension was reduced by a £1m hire agreement and charges for this started in 1900 at £44k per annum. The amount began to reduce in 1903 and by 1906 the annual charge had fallen to £16k per annum, with repayment completed in 1907. Steamship depreciation was £5k and £3k in 1900 and 1901 but ceased for the remainder of the period. It appears that this was financial reasons rather than any significant improvement in the quality of the fleet. Interest on debentures and other loans rose markedly from £483k in 1899 to £721k in 1906, by 49 per cent, as the full effect of the money raised for the London Extension was felt. This was despite the fact that the Second Debentures raised from 1900 onwards had an interest rate of 3½ per cent. The GCR still used Lloyds Bonds extensively during the period. Interest on these which had been £94k in 1899 rose to a peak of £113k in 1900, when the capital value outstanding was £2.915m. The amount reduced gradually thereafter and had fallen to £38k in 1906. General interest, which had been £47k in 1899 fell to £10k in 1900 but increased gradually to £36k in 1906. A transfer from the reserves of £8k was made in 1901. It was not possible to pay dividends to all the preference shareholders during the period. The year 1900 proved to be the low point and dividends were only paid to issues made up to 1872 totalling £407k. In the years up to 1906, the amount paid out gradually increased to £726k in 1906. Even then, this was not a full payment and the 1891 issue was not paid in full. In 1906, the aggregate amount paid on debentures and loans and preference share dividends was £1.447m, an indication of the fixed burden then on the GCR, before ordinary share dividends could be paid.

42 No ordinary dividends were, therefore, paid during the period. 6. The Years after Completion of the London Extension Work 1907-13

By the beginning of 1907, the GCR was clear of the construction work for both Phases of the London Extension. Theoretically, this was the time when the GCR should have been able to develop additional traffic and improve on the difficult financial position that it found itself in at the end of 1906. For convenience, the years up to 1913 are taken as the period when an improvement was reasonably likely to have taken place. The government took control of the railways under the Regulation of the Forces Act 1871 on 5 August 1914 at the start of World War I, so the year 1914 and those up to Grouping in 1923 were not years in which the Board of the GCR had full commercial control.

Further expansion of the GCR’s network continued during the years 1907-13, albeit on a more modest scale than during the London Extension years. Only two projects were undertaken on its own account, the Doncaster avoiding line and the GDLR. Both of these were concerned with making easier access to the new dock at Immingham. Subscriptions to other railways remained at a relatively high level and included investment in the North Lindsey Light Railway (NLLR), a line relating to goods traffic along the south bank of the Humber.

The construction of the new dock at Immingham was technically a GCR project but it was built by a separate Humber Commercial Railway & Dock Company (HCR&DC) set up under an Act of 1904. Construction costs did not appear in the GCR’s accounts, but by a parallel agreement the GCR undertook to lease the works for 999 years from completion and pay a 4 per cent dividend to the HCR&DC ordinary shareholders. These arrangements were necessary because the GCR did not have the financial strength to raise the money itself in 1904. However, they did mean that GCR would have a significant increase in its fixed costs from completion in 1911.

The years 1907-13 were not wholly conducive to a GCR financial recovery, particularly strikes in the cotton textiles and ship building industries in 1908, the labour unrest in the railway industry that lead to a national rail strike in 1911 and a coal strike in 1912.

Before looking at the figures for 1907-13, it should be remembered as mentioned at the beginning that 1913 was the first year in which the reporting changes set out in the 1911 Act came into force. To complete the picture for these years, the figures for 1913 have been simplified and presented in a similar manner to those for the preceding years. This has thrown up some anomalies.

The increases in capital authorised and created and the amount received into the capital account over the period were as follows:

43 31 December 1906 31 December 1913 Increase £m £m £m Capital Authorised & Created Shares 35.433 35.433 - Loans 20.988 25.612 4.624

Total 56.421 61.045 4.624

Amount Received into Capital Account Shares 30.365 30.792 0.427 Loans 17.672 22.905 5.233 Other - 0.017 0.017

Total 48.037 53.714 5.677

The majority of the additional capital raised during the period was from debentures. As in the previous period these had a 3½ per cent coupon and had to be issued at a substantial discount.

The total amount spent on capital account by the end of 1913 was £56.570m made up of:

£m Owned Lines not open for traffic 0.088 Lines open for traffic 34.194

Lines Leased 0.037

Lines Jointly Owned 5.517

Lines Jointly Leased 0.067

Rolling stock 7.932 Manufacturing/repairing works & plant 0.954

Sub Total Railways 48.789

Canals 0.911 Steamboats 0.688 Docks, harbours & wharves 2.263 Hotels 0.132 Electric power stations 0.125 Land & property not part of the railway 2.953 Subscriptions to other companies 0.709

Total 56.570

44 By the end of 1913, both the Doncaster avoiding line and the GDLR had been completed and transferred to lines open for traffic. Some £139k had been spent on the former and £42k on the latter, including the £6k spent in 1906. In the years 1910-12 after completion, further sums of £17k on the former and £15k on the latter were spent. The £88k in the table above had been spent on several smaller schemes.

The capital expenditure during the period 1907-13 was made up as follows:

45 Table 10 Analysis of Capital Expenditure 1907-13 Part 1

1907 1908 1909 1910 1911 1912 1913 Total £ £ £ £ £ £ £ £ Lines Under Construction Doncaster Avoiding Line 13,018 27,439 61,827 36,951 139.235 Grimsby Light Rly 4,080 969 4,261 26,469 35,779 Sub Total 17,098 28,408 66,088 63,420 175,014

Lines Open for Traffic Land Purchase 30,071 (16,356) (5,524) (34) 16,394 12,703 10,659 47,913 Construction of Way & Stations 512,464 157,617 129,055 39,474 132,378 28,832 91,789 1,091,609 Law & Parliamentary 1,380 5,059 402 1,048 1,826 9,715 Leased Lines 38,291 38,291 Other (15,122) 70,516 30,313 11,634 36,375 89,500 223,216 Sub Total 528,793 211,777 158,903 51,476 185,147 132,083 142,565 1,410,744

Amalgamations

Lancs, Derby & East Coast 2,905,094 2,905,094 inc Working Stock

Other Railway Expenditure Previously not Shown Separately 6,137 6,137

Total Lines 3,450,985 240,185 224,991 114,896 185,147 132,083 148,702 4,496,989

46 Table 10 Analysis of Capital Expenditure 1907-13 Part II

1907 1908 1909 1910 1911 1912 1913 Total £ £ £ £ £ £ £ £ Total Lines 3,450,985 240,185 224,991 114,896 185,147 132,083 148,702 4,496,989

Working Stock 195,973 16,839 60,914 83,929 298,841 177,586 834,082 Subscriptions to Other Railways Cheshire Lines 26,000 22,000 12,000 3,400 5,000 21,500 89,900 W Riding & Grimsby 15,000 15,000 5,000 2,050 5,000 32,950 3,000 78,000 GCR & MidR (4,400 105,619 59,469 18,000 29,400 2,800 350 ) Oldham Ashton & Guide Bridge (2,500) (2,500) Manchester Sth Jct & Altrincham 6,000 6,000 Nth Lindsey Lt Rly 50,000 450 7,500 10,995 16,236 14,507 99,688 Hull & Barnsley & GCR & MidR 7,000 12,500 14,300 1,400 38,250 66,500 97,550 237,500 South Yorks 24,000 9,000 10,000 (3,000) 40,000 MR & GCR Joint 7,500 12,000 9,028 28,528 GWR & GCR Joint 62,592 12,186 1,203 421 902 609 77,913

Sub Total 200,061 146,186 84,353 14,571 55,497 114,395 145,585 760,648

Docks, Steamboats & Non Railway 88,167 13,228 (28,055) 121,679 9,324 24,703 25,678 254,724 Capital Repayable GCR & MidR (1,181,250) (1,181,250) Adjustments per 1911 Act (329,707) (329,707)

Total 3,935,186 (764,812) 281,289 312,060 333,897 570,022 167,844 4,835,486

47 Table 10 includes a credit adjustment of £330k arising from the changes to the reporting requirements set out in the 1911 Act. One element of this was the offsetting of the net premiums and discounts on the issue of securities against the cash received from those issues as opposed to against capital expenditure. There were other items such as the transfer of certain elements of subscriptions to other railways from capital expenditure to current assets in the balance sheet. Excluding this credit, in the seven years covered by Table 10, total capital expenditure of £5.165m was 19 per cent lower than during Phase II of the London Extension and 8 per cent lower than 1887-93. As mentioned above, the only two notable lines under construction were the Doncaster avoiding line and the GDLR. Expenditure on lines open for traffic in the years 1907-13 at £1.411m was 15 per cent lower than in the Phase II years. As expected with the larger network, the expenditure was well up on 1887-93. Apart from the additional expenditures on the two construction projects completed during the period mentioned above, in 1907-08 there were further expenditures of £3k on the Neasden Junction – Northolt Junction and Grendon Underwood Junction – Ashendon Junction projects of Phase II. Within subscriptions to other railways £100k was advanced for the new NLLR. Other significant advances in the period were: £k

H&B&GCR 238 GCR&MidR 106 CLC 90 GWR&GCR 78 WR&G 78 SYR 40

A number of the above advances were related to lines serving collieries in the Yorkshire coalfields. For convenience advances to H&B&GCR include work on the four-mile line between Laughton and Ravenfield, which required a separate joint committee with the MidR. Coal production in the UK was to reach its all-time peak in the years running up to World War I and haulage of coal was a major source of revenue for the GCR. A major amalgamation took place in 1907, by which the GCR acquired the Lancashire Derbyshire and East Coast Railway, which, despite the name, was primarily a line between Chesterfield and Lincoln and had been promoted by Nottinghamshire coal owners. It would prove to be the largest amalgamation undertaken by the GCR and added assets of £2.905m, including working stock. Expenditures on working stock fell significantly from the £1.675m spent in the years 1900-06 to £834k now that the two Phases of the London Extension were completed. Expenditure on docks, steamboats and other non-railway activities at £255k was 19 per cent lower than in 1900-06. As mentioned above, the dock development at Immingham was financed by a separate company and not included in this amount. In 1908 there was a further credit of £1.181m in respect of the establishment of the GCR&MidR. Table 11 gives the Revenue Account for the period 1907-13:

48 Table 11 Revenue Account 1907-13 Part I 1907 1908 1909 1910 1911 1912 1913 £ £ £ £ £ £ £ Total Receipts Passenger Trains 1,161,768 1,184,927 1,179,608 1,213,245 1,238,365 1,239,104 1,307,514 Freight Trains 2,918,949 2,776,219 2,796,926 2,947,575 3,116,535 3,193,534 3,589,047 Grimsby Docks 78,609 80,876 80,816 84,120 86,161 92,761 196,873 Steamboats 144,012 126,956 122,901 131,127 143,684 155,017 295,437 Canals 11,541 10,239 10,450 10,068 9,617 9,214 12,095 Rents 115,250 117,837 119,338 119,722 120,939 121,922 97,506 Mileage & Demurrage 22,085 17,763 17,878 12,438 13,479 17,779 Hotels 115,091 Receipts from Running Powers 78,630 Other 9,069 10,072 10,124 10,700 11,210 10,435 39,516 Sub Total 4,461,283 4,324,889 4,338,041 4,528,995 4,739,990 4,839,766 5,731,709 Total Expenditure Maintenance of Way, Works & Stations 398,848 362,951 365,772 393,730 406,775 390,211 451,254 Locomotive Power 870,964 881,616 821,132 872,828 925,698 958,868 868,804 Carriage & Wagon Repairs 268,007 248,004 253,206 270,504 291,322 296,780 666,132

49 Traffic Expenses 885,479 865,719 858,520 888,558 929,564 981,890 1,076,442 General Charges 108,073 106,857 105,664 107,651 110,848 111,127 117,669 Law Charges 9,737 9,262 13,533 8,163 9,753 9,808 10,269 Parliamentary Expenses 3,021 1,206 3,023 1,560 2,022 1,965 208 Compensation 36,751 39,344 33,216 32,542 35,660 39,556 48,751 Rates & Taxes 129,411 131,601 138,860 139,972 142,330 147,520 132,269 Government Duty 3,356 3,463 3,446 3,474 3,456 3,256 3,306 C/Fwd 2,713,647 2,650,023 2,596,372 2,718,982 2,857,428 2,940,981 3,375,104

50 Table 11 Revenue Account 1907-13 Part II

1907 1908 1909 1910 1911 1912 1913 £ £ £ £ £ £ £

B/|Fwd 2,713,647 2,650,023 2,596,372 2,718,982 2,857,428 2,940,981 3,375,104 National Insurance 9,316 20,028 Rents Payable 53,535 52,950 51,329 49,496 49,239 49,624 35,434 Mileage & Demurrage 4,733 Ferry Boat Expenses 13,518 13,083 12,617 12,856 12,873 13,446 Grimsby Docks Expenses 39,987 39,701 38,706 39,160 38,219 42,109 116,634 Canal Expenses 21,383 21,225 21,193 21,042 21,235 21,415 18,785 Steamboat Expenses 132,910 120,777 111,927 121,453 131,638 139,463 282,087 Hotel Expenses 102,735 Others 5,806 Sub Total 2,974,980 2,897,759 2,832,144 2,962,989 3,110,632 3,216,354 3,961,346

Revenue Balance 1,486,303 1,427,130 1,505,897 1,566,006 1,629,358 1,623,412 1,770,363

51 The changes in railway company accounts brought about by the 1911 Act mean that adjustments have had to be made to make the figures comparable with those for the years up to 1912, mainly by allocating the additional information in the 1913 accounts to the categories assumed to have been used previously, where possible. The comparisons using the 1913 figures need to be treated with some caution, particularly as regards hotel revenues and expenses and receipts from running powers. Gross receipts rose by 39 per cent from the £4.113m in 1906 to £5.732m in 1913. Growth was not evenly spread over the years and 1908 saw a small reduction on 1907. There was also a large increase between 1912 and 1913, reflecting the industrial relations problems in 1911-12. In contrast to 1900-06, the increase in passenger revenue at 16 per cent was lower than that for freight at 36 per cent. As regards non-railway activities, the opening of the new dock at Immingham in July 1912 resulted in a considerable boost to the revenue from Grimsby Docks (includes Immingham) in 1913 and the revenue from steamboats. Whereas revenue from the Grimsby Docks rose by 23 per cent between 1906 and 1912, the rise between 1912 and 1913 was 112 per cent. Similarly, steamboat revenue rose by 16 per cent between 1906 and 1912 and by 91 per cent between 1912 and 1913. Total expenditure rose from £2.712m in 1906 to £3.961m in 1913. As might be expected, the expenses relating to Grimsby Docks and steamboats rose substantially between 1912 and 1913. From 1912 the GCR was required to pay employers’ National Insurance contributions arising from the Liberal government’s social welfare legislation. The revenue balance rose from £1.401m in 1906 to £1.770m in 1913, by some 26 per cent. The growth was not evenly spread with reductions in 1908 and 1912. Table 12 gives the Net Revenue and Appropriation Account for the years 1907-13:

52 Table 12 Net Revenue & Appropriation Account 1907-13 Part 1

1907 1908 1909 1910 1911 1912 1913

£ £ £ £ £ £ £ Receipts B/Fwd Balance 7,508 8,121 8,394 7,577 8,538 10,049 9,441 Balance Revenue Account 1,486,303 1,427,130 1,505,897 1,566,006 1,629,358 1,623,412 1,770,363 Joint Line Net Receipts Manchester Sth Jct & Altrincham 35,988 34,978 34,047 34,235 35,237 34,307 38,066 W Riding & Grimsby 48,956 50,967 56,782 61,373 65,247 67,343 77,640 GCR & MidR 39,149 34,548 37,446 39,090 41,090 38,999 36,401 Cheshire Joint Lines 88,325 77,725 84,237 92,849 100,301 110,111 118,753 Oldham, Ashton & Guide Bridge 1,010 MR & GCR 3,588 4,191 2,236 7,712 9,740 11,328 36,889 GCR & NSR 4,812 3,116 3,701 3,260 4,201 3,977 4,083 GWR & GCR 25,001 23,207 27,055 40,542 48,209 51,368 58,599 South Yorks 406 610 886 1,758 1,381 2,482 3,227 GCR, Hull & B, MidR 40 118 54 28 46 Other Receipts from Joint Lines 6,838

Sub Total 1,740,036 1663,593 1,760,721 1,854,520 1,943,356 1,953,404 2,161,356

53 Table 12 Net Revenue & Appropriation Account 1907-13 Part II

1907 1908 1909 1910 1911 1912 1913

£ £ £ £ £ £ £ Expenditure Interest on Debenture Stock 803,728 842,858 854,136 862,496 869,780 887,492 909,746 Interest on Loans 1,778 1,778 1,778 1,778 1,778 1,778 1,778 Joint Line Net Expenses Oldham, Ashton & Guide Bridge 4,079 4,302 5,139 6,034 4,750 3,037 Non-Operational Expenses 6,892 GCR, Hull & B, MidR 107 Interest on Lloyds Bonds 37,260 37,260 37,260 36,560 35,860 35,700 34,320 Nottingham Jt Stn Interest on GNR Advance 17,553 17,552 17,553 17,552 17,553 17,554 17,553 Banbury Branch & Joint Line Interest on GWR Advances 46,947 20,056 9,812 9,812 9,812 9,812 9,812 Hire of Working Stock 9,875 GWR & GCR Rent 32,939 43,750 43,750 43,750 43,750 43,750 MR & GCR Rent 35,000 35,000 35,000 35,000 35,000 35,000 35,000 MR Rent Harrow – Canfield Pl 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Rents & Guaranteed Interest on Other Joint Lines 23,734 Humber Commercial Railway & Docks Interest 23,841 99,104 129,176 Steamship Insurance a/c 10,000 10,000 10,000 Interest on Temporary Loans & Other Funds 18,195 General Interest 55,819 47,077 43,840 43,524 41,607 32,303 36,623 Sub Total 1,032,039 1,058,822 1,068,268 1,086,506 1,113,731 1,195,637 1,286,579

Transfer to/(from) Reserve (23,000) Balance Available for Dividends 707,997 628,771 692,453 768,014 829,625 757,767 874,777

54 Table 12 Net Revenue & Appropriation Account 1907-13 Part III

1907 1908 1909 1910 1911 1912 1913

£ £ £ £ £ £ £ Balance Available for Dividends 707,997 628,771 692,453 768,014 829,625 757,767 874,777

Preference Stocks 699,876 620,375 684,876 759,476 819,576 748,326 866,076 Preferred Ordinary Stock Ordinary Stock Deferred Ordinary Stock

Sub Total 699,876 620,375 684,876 759,476 819,576 748,326 866,076

Balance C/Fwd 8,121 8,396 7,577 8,538 10,049 9,441 8,701

% Dividend on Preferred Ordinary Stock 0 0 0 0 0 0 0 % Dividend on Ordinary Stock 0 0 0 0 0 0 0 % Dividend on Deferred Ordinary Stock 0 0 0 0 0 0 0

55 The net balance from the joint lines increased from £229k in 1906 to £375k in 1913, by 64 per cent. The majority of the increase took place from 1910 onwards. The biggest increases took place in the two committees formed as a result of the London Extension, the GWR&GCR and the MR&GCR, and the WR&G. The full year impact of the rents for the tracks from Harrow South Junction to Canfield Place and the MR&GCRC lines north of Harrow was felt from 1907 onwards at £20k and £35k per annum respectively. The rent for the GWR&GCR line from Northolt Junction to Ashendon Junction started in 1908 at £33k and settled at £44k per annum thereafter. The last payment under the hire agreement for working stock was made in 1907. Payments under the HCR&DC agreement started in 1911 at £24k, rising to £129k in 1913. Provisions of £10k per annum for steamship insurance were made in the years 1910-12 primarily to meet the new obligations under the Marine Insurance Act 1906. No charges for steamship depreciation were made during the period. Interest on debentures and other loans rose from £721k in 1906 to £912k 1913, by 26 per cent, as debentures needed to be raised for on-going capital expenditure, because the GCR’s financial position prevented the issue of new shares. Interest on Lloyds Bonds fell only slowly from £38k in 1906 to £34k in 1913 when the capital value outstanding at the end of the year was still £828k. General interest charges rose from £34k in 1906 to peak at £56k in 1907 and then fell back to £37k in 1913. In 1908 an amount of £23k was transferred from the reserves to support profits. It was not possible to pay dividends to all the preference shareholders during the period. The year 1908 was the low point and dividends were only paid to issues made up to 1881 totalling £620k. By 1913, payments were being made to all the issues, although the 1894 preference shareholders received only half of their entitlement, at a cost of £866k. In 1913, the aggregate amount paid on interest on debentures and loans and preference share dividends was £1.778m, an even greater fixed burden before ordinary share dividends could be paid than in 1906. No ordinary share dividends were, therefore, paid during the period. 7. An Assessment

It is appropriate to start with the original strategy behind the GCR’s London Extension and inevitably with Sir Edward Watkin, Chairman of the GCR 1864-94. Although the GCR also had general managers during that period, the personality of Watkin was such that he directed the strategy of the GCR and it was rare that the Board overruled his recommendations. Watkin was also Chairman of the South Eastern Railway (SER) 1866-94 and of the MR 1872-94 and held directorships in other railway companies, including the Submarine Continental Railway Company. In the early years of the three chairmanships, the domestic problems of the companies were a primary concern.

By the mid-1870s, Watkin had already started to think of ways in which the three companies could be linked up. In 1875, he became a director of the Aylesbury & Buckingham Railway (A&BR) and by 1881 had obtained powers for the MR to expand beyond Harrow to Aylesbury and Chesham. At this point, he was not fixed on a link to the GCR via Aylesbury

56 and a new line north and for a time considered that the Chesham branch would join up with the LNWR at Tring as a way to gain running powers to connect with the GCR further north. In London, once the East London Railway (ELR), which connected with the SER at New Cross, was opened in 1876, Watkin began to see the possibility of a link between the then incomplete Inner Circle (Aldgate to South Kensington was part of the MR) and the ELR. This was finally achieved in 1884, when the problems with the District Railway had been overcome.

By 1888, even before the Chesham branch had opened, Watkin appears to have decided that that a GCR connection with the MR north of Aylesbury using part of the A&BR was the way to go. Work started on the MR’s line from Chalfont Road to Aylesbury, which was completed in 1892, and the A&BR was acquired in 1891. Further north, Watkin had got powers in 1889 for a new line between Beighton near Sheffield to Annesley near Nottingham, which although serving the coalfields, brought the GCR a little nearer to London. Manoeuvres to determine the exact route of the London Extension continued 1889- 93, but in that year the GCR obtained powers for the route as eventually built. Watkin was forced to retire from his chairmanships in the following year after a stroke, but by then the die was cast.

The GCR’s early history also affected its strategy for the London Extension. The company and its progenitors were never financially very sound and much of its expansion took place by means of joint committees. The most significant of these was the CLC comprised of the GCR, GNR and the MidR, which was eventually to cover over 140 route miles in Lancashire, Cheshire and surrounding areas. By the time powers were sought for the London Extension, the GCR was involved in six joint lines of varying sizes; besides the CLC these were the MSJ&A, WR&G, GCR&MidR, OA&GB and NSR&GCR. It was not, therefore, surprising that even Watkin had to consider using joint lines to achieve his strategic goals and thereby keep the cost within manageable limits. The MR was important in this as it provided most of the last 45 miles into London. Inner London had expanded considerably since the lines to the other main line terminals had been built and the cost of an independent line for even half of those 45 miles would have racked up significant land costs.

William Pollitt (later Sir), who had become General Manager of the GCR in 1886, was the man who guided the strategic direction of the GCR after Watkin had retired. He was in effect tied into Watkin’s strategy, but began to put his own stamp on it. In all probability there was a personal element to this as John Bell, who became the MR’s Chairman and Managing Director from 1894-1901, had been a rival of Pollitt in the past, when they both worked for the MS&LR. Even Watkin had recognised that the MR’s line from Quainton Road to Harrow had its deficiencies, particularly congestion at the southern end, challenging gradients and curves and inadequate facilities for long distance freight and passenger trains, but it was likely that his strategy would have been to encourage the MR and the GCR to work together to bring about gradual improvements. Pollitt was willing to consider an alternative and as early as 1896 had secured an Act authorising a branch between Woodford & Hinton and Banbury to enable freight trains to access the area around London using GWR metals. The GWR obtained powers to build a direct link to Birmingham via Acton and Princes Risborough in 1897 and by 1899 the GCR had agreed to participate in a joint line between

57 Northolt Junction and Ashendon Junction and powers for this revised plan were obtained. Thus, as the original route of the London Extension was completed in 1899-1900, the GCR was committed to a second Phase involving about 50 route miles of track, including the 12 miles of connections at each end, which were a 100 per cent cost to the GCR.

In the same year that Pollitt became General Manager, Alexander Henderson (later Sir and then Lord Faringdon) joined the Board as a Director. He already had experience in the City of London with the accountants Deloittes, as a stockbroker and as a financier of railways at home and abroad. In all probability, the Board had recognised that the scope and cost of the London Extension project needed a strengthening of the GCR’s financial expertise. Henderson was particularly involved in the initial financing of the project and the measures taken later to deal with the strain on the GCR’s finances as the project progressed, in particular the forms of current liabilities used, listed below. By 1899, his value to the GCR was recognised by his appointment as Chairman to succeed Lord Warncliffe.

The change of strategy also resulted in a claim for compensation from the MR for the expenditure that it had incurred for accommodating the GCR, which would not now be needed. Ultimately, this claim would not be settled until 1905, after both Bell and Pollitt had relinquished their positions. The MR&GCR agreement included a compensation mechanism based on passenger traffic receipts in 1904, which took effect in 1906.

The original Watkin plans for the London Extension (plus a small amount for Phase II) involved an increase of nearly 150 per cent in capital expenditure in the years 1894-99 compared to 1887-93, which would have been a stretch of any railway company. They also precluded any expenditure on any other new lines. Expenditure on the Pollitt plans in the years 1900-06 involved only a 13 per cent increase in capital expenditure compared to the years 1887-93, but also precluded any expenditure on other new lines, other than a small amount of initial expenditure on the GDLR.

At the beginning of the London Extension project, it was possible to create £6.2m of new share capital for the project. The issue of the new shares plus debentures proved to be inadequate for the actual expenditure on the project and, as discussed below, the net revenue after completion of both Phases failed to produce a return to the ordinary shareholders and did not allow a full return to all the categories of preference shareholders. By 1900, investor confidence in the GCR had deteriorated so much that no new shares were created or issued before World War I, over seven years after the completion of Phase II. The GCR was still able to earn sufficient net revenue to pay its debenture holders in full and virtually all the capital raised after 1900 was in the form of debentures. This, of course, increased the fixed charges to be paid before any payments to the shareholders. Payment of interest on debentures and long-term loans, which cost £386k in 1893 had risen to £518k in 1900, £721k in 1906 and £911k in 1913. In addition, some £909k of interest was capitalised during construction and thus was never charged in arriving at net revenue.

The GCR was also forced to make use of various forms of current liabilities to help finance both Phases of the London Extension:

58 i. Advances from the GNR of £615k for the construction of the Nottingham joint station. ii. Advances from the GWR of £280k for the construction of the Banbury Branch. iii. Advances from the GWR for the construction of the GWR&GCR joint line and the Ashendon Junction to Grendon Underwood link. The maximum amounts were £957k and £108k respectively, but these amounts were cleared in 1908. iv. Use of a hire purchase agreement with the Railway Rolling Stock Trust for £1m of rolling stock for the Extension. v. Use of Lloyds Bonds, which had not been used before 1897, reaching a peak with a capital value of £2.915m in 1900, falling to £932k in 1906 and £828k in 1913. vi. Increased use of short-term borrowings, with general interest charges rising from £5k in 1893 to £47k in 1900 and £56k in 1907, before falling to £37k in 1913. vii. Use of the Wharncliffe Dwellings Company to build houses for the people displaced by the construction of the line in London.

Non-railway activities were also affected by the problems of raising capital and the most important of these was the construction of the new dock at Immingham. This was financed by the HCD&RC, which then leased the dock to the GCR.

Pollitt, in addition to the not inconsiderable task of bringing Watkin’s plans for the London Extension to fruition, had to try to maintain the profitability of the GCR while doing it. Although the GCR recovered from the coal strike of 1893 and gross revenue continued on a similar upward trajectory to the years 1887-1892, expenditures in the Revenue Account rose considerably and the revenue balance in 1899 was lower than in 1892. The Net Revenue Account had to bear the increased interest costs of the debentures and higher current liabilities, despite the fact that some of the interest costs of the London Extension were capitalised. By 1899, the amount available for dividends in the Appropriation Account was not sufficient to pay all the dividends due to the preference shareholders and with nothing left for the ordinary shareholders, despite a £35k transfer from the reserves.

Pollitt retired in 1902 and the bulk of the task of overseeing the completion of Phase II of the London Extension and making a commercial success of extended project fell to Samuel Fay (later Sir). Fay was supported by the financial expertise of Henderson as Chairman. The latter was personally involved in matters such as the financing of the new dock at Immingham via the HCR&DC. George Dow describes a wide range of measures taken by Fay to grow revenue and to improve efficiency. In terms of gross revenue, these rose more rapidly than they had in the period 1894-99. The costs of the enlarged network rose steadily also and it was not until 1902 that the revenue balance exceeded that of 1899, but grew steadily up to 1906, when Phase II was completed. Although interest costs in the Net Revenue Account restricted the amount available for dividends, this amount did grow steadily up to 1906. Unfortunately, the extra amount available for dividends was not sufficient in any of the years 1900-06 to pay the preference shareholders in full.

59 The years 1907-13 should have provided an opportunity for Fay, supported by Henderson, to put the London Extension behind him and to grow the profitability of the GCR to at least something similar to that in the years 1887-93. To some extent, economic conditions were favourable in that there was no major depression in those years and rearmament of the navy with the Dreadnought type of capital ship favoured some of the railways’ industrial customers. However, increasing amounts of labour unrest tended to negate the otherwise favourable conditions. Three of the years 1908 and 1911-12 were particularly affected. The railways themselves were hit with strikes in 1911, while in 1908 it was mainly cotton textiles and ship building and in 1912 the coal industry, all major customers of railways.

Growth of gross revenue and the revenue balance was uneven as a result of the industrial relations problems, but 1913 was showing an encouraging improvement on 1906. Increasing charges in the Net Revenue Account continued to be a problem, not only in respect of interest on debentures and current liabilities but also rents stemming from the two Phases of the London Extension. The GCR had to pay £20k per annum to the MR for the rent of the two tracks from Harrow to Canfield Place, £35k per annum to the MR&GCR for the rent of the lines north of Harrow and £44k to the GWR&GCR for the rent of the lines between Northolt Junction and Ashendon Junction. At the end of the period, interest payments to the HCR&DC had also started and had reached £129k in 1913.

The balance available for dividends fell below that of 1907 for three years, not recovering until 1910. A transfer of £23k from the reserves was necessary in 1908. For the whole period 1907-13, it was not possible to pay all the preference shareholders in full. In 1913 the position had improved so that the payment to the preference shareholders at £866k was only £62k short of a full pay out. Even so, the GCR had a fair way to go before it could pay a reasonable dividend to its ordinary shareholders.

Before giving a final assessment on the financial impact of the GCR’s London Extension, it is useful to look at the overall health of the railway industry in 1913. Sheward in his review of 20 of the leading railway companies8 showed that the railways were a mixed bunch. Companies such as the GWR, MidR, NER and North British Railway were still producing ordinary share dividends of over 6 per cent, whereas the GCR and Cambrian Railways could not pay any. However, an article by Mitchell, Chambers and Crafts9, using modern financial analysis techniques concluded that returns on capital employed fell from 1870-97 such that by 1897 investors made little or no money in real terms. By 1910 the task of restoring returns to cover the cost of capital would have been extremely difficult. Figure F illustrates this in relation to the GCR’s return on capital compared the risk-free rate on government debt. It could thus be argued that the GCR’s London Extension project took place at an unfavourable time for railway companies generally. Although outside the period covered by this article, it is worth noting that during World War I and its aftermath the interest rate on long term government debt rose steadily to over 5 per cent in 1920-21. It is difficult to see how the GCR and some of the other railway companies could have become a financial success in such conditions and some form of consolidation, ultimately Grouping, became inevitable.

60 The question of strategy undoubtedly affected the ability of the project to make a satisfactory return. Watkin’s thinking was obviously influenced by his interests other than GCR, although there is no direct evidence that he sought to benefit the MR and SER disproportionately compared to the GCR. Even he recognised that the use of the MR’s tracks from Quainton Road to Harrow had imperfections and, before the project started, had pressed the MR to make a number of improvements to its facilities. Before he was forced to retire as the GCR’s chairman, there is no clear evidence of any plans to make further improvements after the project was completed. The 1935 New Works Programme proposals for the MR between Harrow and Rickmansworth eventually carried out in 1960 are an indicator of what might have been possible through further co-operation with the MR. As it was, the change of leadership at the top of both companies resulted in Pollitt taking up a new strategic direction leading to Phase II and joint line with the GWR. Although comparisons are not really possible, it could be said that the London Extension after two Phases ended up being over- scoped for the likely traffic and more costly than continued co-operation with the MR.

The nature of the project itself also had an effect on its financial success. Compared to the capital projects that the GCR had carried out 1887-93, Phase I of the London Extension led to a more than doubling of the capital spend in the years 1894-99 and precluded any other new lines being built. In addition to the huge cost, the administrative effort required to control such a major project was well in excess of anything the GCR had attempted before. It is not surprising that there were cost overruns, difficulties in raising additional capital and an increased use of current liabilities, accompanied by a deterioration in the financial results with no dividends on the ordinary shares paid after 1898. Work on Phase II, although considerably less capital intensive, had the effect of making the financial position worse.

The commercial prospects of the London Extension also affected its financial outcome. Building a direct line from Nottingham to London had to face the reality that other railway companies particularly the MidR, LNWR and GNR, had already chosen routes to London where the traffic was expected to be most favourable and had had decades to establish themselves. The competition for the new stations at Loughborough, Leicester and Rugby was likely to be strong and south of Rugby there were no rich pickings. Use of joint lines for the final approach to Marylebone, of course, involved sharing of traffic revenue.

From 1902, it was down to Fay, supported by Henderson, to make a financial success of the strategy to which Watkin and Pollitt had committed the GCR. While his efforts in a variety of fields were many and various, he was fighting an uphill battle, particularly in respect the increased interest and fixed charges that had resulted from the London Extension. Until Phase II was completed in 1906, the full potential to develop more traffic was not available. After 1906 and up to 1913, the last full peacetime year, industrial relations problems affecting both the GCR directly and many of its major customers meant that progress was slow. Although no dividends were paid on the ordinary shares in 1913, there was at least the possibility that a few more years of prosperity might have led to a reasonable return, had World War I not intervened. Interest on debentures and long-term loans, and on current liabilities were paid regularly in full and the risk of insolvency was avoided.

61 Figure A

Great Central Railway Gross Receipts from Passenger & Freight Trains

6,000

5,000

4,000 0 0 0 £

s t p i 3,000 e c e R

s s o r

G 2,000

1,000

- 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913

Year

Total £000 Passenger £000 Freight £000

62 Figure B

Great Central Railway Total Capital Received 60,000

50,000

40,000 0 0 0 £ d e v i e 30,000 c e R l a t i p a C

l 20,000 a t o T

10,000

- 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 8 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Year

63 Figure C

Great Central Railway Net Revenue before Interest & Dividends

2,000

1,800

1,600 0 0 0 £ s 1,400 d n e d i v i

D 1,200

& t s e r

e 1,000 t n I e r o f 800 e b e u n

e 600 v e R t e

N 400

200

- 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 1 8 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Year

64 Figure D

Great Central Railway Percentage Ordinary Dividend

4

3.5

3 d n e d i 2.5 v i D y r a n i 2 d r O e g a t 1.5 n e c r e P 1

0.5

0 1885 1890 1895 1900 1905 1910 1915

Year

65 F igure E

Great Central Railway Percentage Return on Capital v Return on Long Term Debt and Consumer Prices Index

5.0

4.5

4.0

3.5

3.0 %

e g a

t 2.5 n e c r e

P 2.0

1.5

1.0

0.5

0.0 188718881889189018911892189318941895189618971898189919001901190219031904190519061907190819091910191119121913

Year

Percentage Return % Return on Long Term Government Bonds % Consumer Prices Index %

66 Glossary of Railway Names

A&BR Aylesbury & Buckingham Railway CLC Cheshire Lines Committee (joint line) ELR East London Railway GCR Great Central Railway (Manchester, Sheffield & Lincolnshire Railway to 1897) GCR&MidR Great Central Railway & Midland Railway (joint line); S&MidR up to 1904 GDLR Grimsby & District Light Railway GNR Great Northern Railway GWR Great Western Railway GWR&GCR Great Western Railway & Great Central Railway (joint line) H&BR&GCR Hull & Barnsley Railway & Great Central Railway (joint line) HCR&DC Humber Commercial Railway & Dock Company LNER London & North Eastern Railway LNWR London & North Western Railway MSJ&A Manchester South Junction & Altrincham (joint line) MidR Midland Railway MR Metropolitan Railway MR&GCR Metropolitan Railway & Great Central Railway (joint line) NLLR North Lindsey Light Railway NW&L North Wales & Liverpool (joint line) NSR&GCR North Staffordshire Railway & Great Central Railway (joint line); Macclesfield Railway up to 1897 OA&GB Oldham, Ashton & Guide Bridge (joint line) S&MidR Sheffield & Midland Railway (joint line) SER South Eastern Railway SL&MR Shireoaks, Laughton & Maltby Railway (joint line) SYR South Yorkshire Railway (joint line) WM&CQ Wrexham, Mold & Connah’s Quay WR&G West Riding & Grimsby (joint line)

References

67 1 The annual reports of the GCR for the years 1854-1922 can be found in The National Archives (TNA) RAIL 1110/ 155, 156 & 305.

2 The Railway Returns for the years in question can be found in TNA RAIL 1053.

3 Dow, G. (1959, 1962 & 1965), Great Central Vol I: The Progenitors 1813-63, Vol II: Domination of Watkin 1864-99, Vol III: Fay Sets the Pace 1900-22, Locomotive Publishing Company Vols I & II and Ian Allan Vol III.

4 Hartley, R F. (1986), Manchester to Marylebone, A Short History of the Great Central Railway, Leicester Museums.

5 Janssen, N., Nolan, C. and Thomas, R. (2002), Money, Debt and Prices in the United Kingdom 1705-1996, Economica, vol 69 no275, pp 461-479.

6 O’Donoghue, J., Golding, I and Allen, G (2004), Consumer Price Inflation since 1750, (London Office for National Statistics), (ONS Economic Trends 604).

7 Jackson, A. A. (1986), London’s Metropolitan Railway, David & Charles.

8 Sheward, T. (2016), The Financial State of Britain’s Railways in1913, Journal of The Railway & Canal Historical Society, No 255 pp 410-425.

9 Mitchell, B. R., Chambers, D. and Crafts, D, (2009), How Good Was the Profitability of British Railways 1870-1912?, (University of Warwick, Department of Economics, 2009) (Warwick Economic Research Papers 2009-01).