Managing the “Royal Road”: The London & South Western Railway 1870-1911 David Anthony Turner Thesis submitted for the degree of Doctor of Philosophy University of York Department of History Institute of Railway Studies and Transport History September 2013 1 Abstract There has been considerable scholarship over the last fifty years on the causes of the late- nineteenth and early-twentieth century British railway industry’s declining profitability. Nonetheless, scholars have largely avoided studying how individual companies’ were managed, instead making general conclusions about the challenges industry leaders faced and the quality of their responses. This thesis examines the management of one of the British railway industry’s largest companies, the London and South Western Railway (LSWR), during the tenures of three of its General Managers: Archibald Scott, who was in the post between 1870 and 1884, Charles Scotter, who succeeded him from 1885 to 1897, and Charles Owens, who held the position between 1898 and 1911. Compared with other major British railways the LSWR’s profitability ranged from being poor under Scott, to excellent under Scotter and then average under Owens. This thesis will explore what internal and external factors caused these changes. Furthermore, it considers how the business’ organisational form, senior managers’ career paths and directors’ external business interests all played a role in shaping the company’s operational efficiency and financial performance. Ultimately, the thesis will argue that while external factors were an influence on the LSWR’s profitability between 1870 and 1911, primarily its financial performance was determined by the quality of the strategies and policies enacted by its directors and managers. Ultimately, this thesis brings clarity to the existing debates and, by using the LSWR as a case study, provides important suggestions as to what actually caused the British railway industry’s declining profitability between 1870 and 1911. 2 This thesis is dedicated to: Mum, Dad, Hannah, Grandpa, and Chiara. 3 Contents Abstract 2 Dedication 3 Contents 4 List of Figures, Maps and Illustrations 6 List of Maps 8 Acknowledgements 10 Author’s Declaration 12 Chapter 1 – British Railways 1870-1914 13 Section 1 – Management in the British railway industry, 1870-1914 14 Section 2 – British railway industry performance - 1870-1914 34 Section 3 – Case study selection 41 Section 4 – The nature and format of the study 48 Section 5 – Appendices 52 Chapter 2 – The LSWR’s Management Structures 54 Section 1 – The LSWR’s board and its committees 55 Section 2 – Operational Structure 59 Section 3 – Conclusion: Structure and management weaknesses 77 Chapter 3 – LSWR decision-makers 82 Section 1 – The LSWR’s clerical labour market and traffic managers’ careers 83 Section 2 – LSWR directors’ external business interests 94 Section 3 – The LSWR’s ‘activist’ directors 109 Section 4 – Conclusion 116 Section 5 – Appendices 119 Chapter 4 – Company policy during Archibald Scott’s tenure: 1870-1884 123 Section 1 – Major Capital Expenditure 124 Section 2 – Operational pressures 143 Section 3 – Operational matters until c.1881 157 Section 4 – Operational matters, c.1881-1884 173 Section 5 – Conclusion 188 Section 6 – Appendices 192 Chapter 5 – Company policy during Charles Scotter’s tenure: 1885-1897 195 Section 1 – Company Operations 195 Section 2 – Major Investment 215 Section 3 – Overall Conclusion 227 Section 4 – Appendices 231 4 Chapter 6 – Company policy during Charles Owens’ tenure: 1898-1911 233 Section 1 – Capital investment, 1897- 1901 233 Section 2 – Wage increases 1897-1901 249 Section 3 – Operations after 1901 252 Section 4 – Reducing operational costs 264 Section 5 – Conclusion 284 Section 6 – Appendices 289 Chapter 7 - Conclusion 290 Appendix A: Chief Administrators and Officials 305 Appendix B: Biographies of LSWR’s major decision-makers, 1870-1911 307 Abbreviations 318 Bibliography 319 5 List of Figures, Maps and Illustrations Chapter 1 1. A ‘typical’ British railway management structure in 1910 17 2. LSWR network in 1890 42 Appendix A. Operating Ratio of the LSWR and the average of the industry's fifteen 53 largest companies Chapter 2 1. The LSWR’s management structure in 1910 58 2. LSWR Traffic Department Structure in 1870 62 3. LSWR Traffic Department Structure 1884-1893 65 4. LSWR Traffic Department Structure, 1899-1912 67 5. LSWR Locomotive Department Structure 1872-1885 69 6. Main LSWR Way and Works Department main structure 1870 76 Chapter 3 1. The number of directors that sat on the LSWR's Traffic Committee 1870- 110 1911 2. The number of Special Committees held by the LSWR board, 1870-1911 112 Chapter 4 1. The Somerset and Dorset Railway in 1890 (MAP) 125 2. The planned route of the ‘Guildford, Kingston and London Railway’ and 129 the LSWR’s alternative lines (MAP) 3. The LSWR's western extensions between 1874 and 1880 (MAP) 131 4. LSWR capital purchases 1870-1891 136 5. The Salisbury and Yeovil Railway (MAP) 138 6. Staines, Wokingham and Woking Junction Railway (MAP) 138 7. The Mid Hants Railway (MAP) 139 8. The Bishops Waltham branch (MAP) 140 9. The LSWR's line between the SWWJR and its main line (MAP) 140 10. The average number of pence earned per passenger, 1870-1884 144 11. LSWR Operating Ratio if passengers, paid the same average fare as in 145 1870 12. Wage costs of major departments (pence per train mile) 148 13. Wage costs as a proportion of department costs of the LSWR’s major 150 departments 14. LSWR locomotives renewal rate 1868-1882 166 15. Capital spent on 'lines open for traffic' 175 Appendix 4.2. The LSWR driver’s and firemen’s petition to the LSWR board 193 6 Chapter 5 1. Cost of the Traffic Department and its wages per train mile 1885-1897 200 2. Alterations to trains on numerous lines 201 3. Alterations to trains on numerous lines 201 4. Engineering Department costs and wages per train mile 1885-1897 203 5. Cost of the Locomotive Department per train mile 1885-1897 206 6. The expenditure of the LSWR and its four main departments per train 209 mile 1885-1897 7. Capital spent on widening LSWR lines from December half-year 1885- 217 1902 8. The Meon Valley Line between Alton and Fareham (MAP) 224 9. The Basingstoke and Alton Light Railway (MAP) 225 Chapter 6 1. Number of passengers conveyed by the LSWR between 1890 and 1911 235 2. LSWR Expenditure at Stations and yards, 1892-1906 236 3. Annual capital expenditure on the Southampton Docks, 1895-1911 240 4. LSWR average revenue per ton of merchandise and minerals hauled 244 5. LSWR capital expended on major projects and its total capital 27 expenditure, 1898-1911 6. LSWR Expenditure on 'Lines open for Traffic' and the Southampton 248 Docks, 1870-1911 7. The position of the Feltham Marshalling Yard (MAP) 270 7 List of Tables Chapter 1 1. The return on capital employed of Britain's fifteen largest railways 1870- 34 1910 2. Proportion of train miles run by passenger and goods trains on eight 44 principal British railway companies in 1872, 1885 and 1897 Appendix 1.1. British Railways Rates of Return on capital employed, 1872-1910 (five- 52 year moving average) 1.2. British Railways’ Operating Ratio, 1872-1907 (five-year moving 53 average) Chapter 2 1. Train mile per track mile LSWR trains ran 1870-1910 61 2. LSWR locomotive shed structure in 1906 71 Chapter 3 1. The position in which LSWR traffic managers appointed between 1858 84 and 1870 2. Typical promotional paths of LSWR traffic managers 1870-1911 85 3. LSWR traffic managers’ career paths 1870-1911 87 4. The average time it took managers to reach their first senior 90 management post and their age when they reached it 5. Primary occupations of LSWR directors 1870-1880 (August) 95 6. Directors' primary occupations and external directorships in 1880 99 7. The number of directorships LSWR directors had on joining the company 100 8. Sectors in which new directors held directorships 102 9. Directorships LSWR directors were appointed to after joining the board 106 10. Example of how a diplomatic engagement score is calculated 111 Appendix 3.1. All LSWR directors that sat on the Traffic Committee 1870-1911 119 3.2. Joint committees, part-owned companies and bodies LSWR directors 120 sat on 1870-1911 3.3. All directors who served on a LSWR Special committee 1870 to 1904 121 3.4. All LSWR directors between 1870 and 1911 identified as ‘activists’ 122 Chapter 4 1. Growth in third class passenger numbers 1865-1884 146 2. Capital expended on vacuum brake 1883-1888 155 3. Compensation paid to passengers for accidents between 1870 and 1900 156 4. Material costs as a proportion of Locomotive Department costs and per 167 train mile relative to the cost in 1870 (100) 8 Appendix 4.1. LSWR line purchases, 1870-1884 192 4.3. Track width of the LSWR’s lines 1878-1890 194 Chapter 5 1. LSWR competitive express services to the West Country in 1878 and 210 1893 2. The LSWR’s major capital investment decisions that will be studied in 215 this chapter 3. The traffic and trade of the Southampton Docks, 1892-1897 222 Appendix 5.1. Track width of the LSWR’s lines 1880-1890 231 Chapter 6 1. Increase of LSWR passenger traffic expressed numerous ways 235 2. Track width of the LSWR's lines, 1898-1908 238 3. The traffic and trade of the Southampton Docks in 1897 and 1908 242 4. LSWR cost inefficiency scores 264 5. Cost of Locomotive Department expenditure attributable to lowering 279 fuel costs in 1901 and 1906 6. Locomotive Department Costs in 1906 and 1911 280 Appendix 6.1.