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Monday, 11 October 2010

Commerce and Finance in Railway Promotion - To Bristol and Southampton we go!

The individuals behind the establishment of Britain’s railway companies have been inadequately studied. What we do know is that they came from a range of different backgrounds, for example traders, landowners, industrialists and gentry. However, which of these groups of individuals played the most important role in the new railway companies has always been vague. Usually, historians have always ascribing the most prominent roles to interested parties such as ‘businessmen’ or ‘merchants,’ without exploring in much more detail the ‘nuts and bolts’ of their involvement.

However, my recent research on the London and Southampton Railway (L&SR) (later to become the London and South Western Railway) and Geoffrey Channon’s on the Great Western Railway (GWR), has given more detail as to who the promoters and early directors of these railway companies were. Subsequently, as my research came after Channon’s, I have established a more nuanced story behind the promotion of Britain’s early railways.

The promoters of the GWR in 1835 were all related to the fact that Bristol, one of its termini, had been a trading port for centuries. Subsequently, Channon showed that 16 of the 30 directors that were involved in its promotion between 1833 and 1835, came from ‘commerce and finance.’ This reflected the high number of merchants that were based in London and Bristol that served to gain from the promotion of a railway through the expansion of trade.[1] Some of the notable individuals included William Tothill, a manufacturing chemist, Thomas Guppy, owner with his brother of Friars Sugar Refinery, and Nicholas Roach, Chairman of the Bristol Dock company, who was also an oil and leather manufacturer.

Further, many of Bristol’s commercial bodies, such as the Corporation, the Society of Merchant Ventures, the Bristol Dock Company and the Bristol Chamber of Commerce, also backed the plan.[2] Therefore, the established merchants and trade organisations of the city came together to promote the new railway and further increase their wealth and prosperity.

However, when I looked at the L&SR, I found a different story. This story principally hinged on the fact that the company’s destination town, Southampton, was not an established trading port like Bristol. G.A. Sekton, a biographer of the L&SWR, wrote that in Southampton before 1834 ‘there were no manufacturers… requiring access to the great mart [London] for their consumption; there was no trade, no commerce there.’[3] Indeed, the port could only charitably be described as a small fishing village. Thus, this meant that the individuals involved in the establishment of the L&SR’s project were different to those involved in the GWR.

Firstly, 10 of the 23 (43.47%) directors that joined the L&SWR board between 1834 and 1840 were categorised as being involved in ‘commerce and finance.’ Yet, unlike the case of GWR, further investigation shows that only three of these individuals were merchants. The seven remaining promoters and directors were actually working in banking and finance. These included Sir John Easthope, a former stockbroker, Edmund Jerningham, of the London Joint-stock bank and Robert Williams, of Williams, Williams & Williams bank, Bridehead.

The reason for the significant involvement of financial men seems to be because of the investment opportunities provided by developing a completely new port. While in the case of the GWR there was a pre-existing economy held in the grasp of merchants looking to expand Bristol’s trade, Southampton possibly could have been developed quickly, providing a lucrative investment opportunity for bankers to make large amounts of money quickly. Indeed, the L&S’s original name was the ‘London, Southampton, and Branch Railway and Dock Company,’evidencing the fact that its promoters saw the opportunities of developing a new railway with a new port at its terminus. Lastly, the involvement of bankers would have also allowed the embryonic company to access the capital on favourable terms, as large amounts would be required to develop the port. This said, the docks part of the plan was dropped early on.

Thus, comparing my research with Channon’s has shown that who the promoters and early directors of railway companies were, was dictated by where the lines were proposed to be built and the economies through which they passed.

[1] Channon, Geoffrey, Railways in Britain and the United States, 1830-1840, (Aldershot, 2001), p.184

[2] Channon, Railways in Britain and the United States, p.56-58

[3] Sekton, G.A., The London & South Western Railway: Half a Century of Railway Progress to 1896, (London, 1896, reprint 1989), p.2

[4] Fay, Sam, A Royal Road, (Kingston, 1881) p.5

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