The aftermath of the war was always going to be a time of trouble and strife for the railways. Not only had they been managed under a completely different system, which raised questions about their future structure, but they had been heavily used and simultaneously starved of investment. The financial situation of the railways had also deteriorated substantially because the government was unwilling to pay what the companies felt to be fair compensation. First, however, there was the fraught industrial relations issue which had been bubbling under the surface for several years and only kept in check by patriotic need.
In truth, a strike during the war had been only narrowly averted. In 1916, the railway unions had been agitating to increase the war bonus, which was their members’ sole protection against rampant inflation. A few local unofficial strikes broke out and the National Union of Railwaymen struggled to keep control of its members, who were angered at the loss in real wages and were threatening an unofficial national strike. There were several meetings with the Prime Minister, Herbert Asquith, and his successor, Lloyd George, who took over at the end of 1916, and finally, in the spring of 1917, the war bonus26 was increased by five shillings. These bonuses were paid at the same set rate to all railworkers, which had the effect of flattening differentials. The footplatemen, who traditionally were far better paid than other workers, and their union, ASLEF, had pressed their long-standing claim for an eight-hour day, which met with a pledge from Albert Stanley, the President of the Board of Trade, that this measure would be implemented after the war.
The end of hostilities, therefore, was bound to release this pent-up pressure from the unions. The demand for an eight-hour day was quickly met, becoming standard for all railwaymen in February 1919. The locomotive crews, too, were bought off with a generous wage settlement – incorporating their war bonus now worth thirty-three shillings per week – which stipulated 120 miles was considered to be a day’s work. However, the government made the mistake of trying to drive down wages for the rest of the workforce, who were already less well paid and belonged to the industrially weaker NUR, by scrapping their war bonus and decreeing that wages should be returned to 1913 rates – whereas prices had increased by 150 per cent in the meantime. It was tantamount to an invitation to strike and even the union’s remarkably moderate leader Jimmy Thomas was forced into action.
A strike was called for 27 September 1919, and since it was supported by the footplatemen in ASLEF, despite their generous rise, the stoppage was near total. Thomas was ill-prepared, having been convinced he could negotiate a deal, and it was only thanks to the support of the Cooperative Wholesale Society, which enabled strikers to receive emergency payments, that the strikers did not starve. Support, however, was very solid and even the press, hostile at first, came round to the view that the men’s claims were reasonable. Interestingly, for the first time ever in a strike, there was a battle in the newspapers with both sides vying for advertising space to put forward their case. Ministers’ claims that Thomas was the head of an ‘anarchist conspiracy’ were scarcely credible given that the leader of the NUR was far to the Right of most of his members and after a week Lloyd George, who had been re-elected in the ‘khaki election’ of December 1918, caved in, allowing the workers to continue receiving their war bonus and their existing level of wages. Why he ever thought he could get away with such shabby treatment of the railway workers remains unclear but historians are agreed that it was his obstinacy which caused the strike.
The 100,000 women who had come into the industry during the war fared less well. At the peak they comprised a sixth of the labour force compared with just 2 per cent in 1914 – but the men wanted them out, even though many were reluctant to leave. Only around a third of those working in male grades resigned within a few weeks of the armistice but as there was no equal rights legislation in force (apart from a 1919 Act which prevented married women from being disqualified from certain jobs merely on the basis of the marital status), many women were peremptorily sacked to make way for the returning men. Helena Wojtczak sums up the bitterness of many of these women: ‘women’s heroism and sacrifice, however, were to be rewarded with a return to ill-paid, menial, women’s work, or by a place in the dole queue’.27 The 35,000 women in male grades at the end of the war dwindled to just 200 within five years and over successive years a few thousand were employed as clerks because, foolishly, union leaders had allowed these female grades to be paid less.
Cruelly, women were largely written out of most railway histories, their role being either ignored completely or portrayed as marginal or, worse, denigrated. In the standard reference book on railways in the Great War, Edwin Pratt28 complained women had been late or absent from work far more often than men, but completely ignored the fact that, unlike the men they worked alongside, they had to cope with childcare, domestic chores and shopping as well as their jobs. He also argued that women did not seek training for higher branches of railway work when they were specifically dissuaded from doing so since their status was temporary.
For their part, the railway companies had their own grievances about the way they had been treated after their gargantuan efforts during the war, but in their case the argument was with the government. Under the 1871 Regulation of the Forces Act, which allowed the government to control the network in wartime, the railways were supposed to be handed back in the same physical and financial state as pertained before the takeover. This was supposed to happen as soon as hostilities ended but the government, realizing that things would never be the same, prevaricated as the politicians debated the future structure of the railways. There were two issues to sort out: the level of compensation, if any, to be paid in relation to the wear and tear and lack of investment caused by the war, and the future structure of the railways given that a return to the pre-war situation with nearly 200 companies was not feasible. The railways had not only provided four years of free services to the government, but there had been many hidden costs too; there had been very little maintenance and renewal of the railways, nor had there been much replacement of equipment as the workshops had been transformed into munitions factories.
The compensation issue came to a head over the case of the Scottish railway, the North British, in what has been described as ‘the biggest row that had ever been between railway company and government’.29 At first there was no great urgency to resolve the problem as the railways were still profitable. However, as war traffic came to an end, an economic depression, which always affect the railway industry disproportionately, set in. Since the government had not allowed fares and charges to rise in line with inflation, and yet had agreed to an eight-hour day for the workforce and a wage bill that had risen from £47m pre-war to £160m, the railways’ financial situation was precarious. From annual net receipts before the war of £46m, the railways were now losing a similar amount and the government had to double fares and freight charges in July 1920 in order to make up that deficit in the short term. Not only were the fare increases highly unpopular but they reduced traffic at a time when passenger numbers were falling anyway because of the depression.
Since August 1915 the government had made payments to the railways in recognition of deferred maintenance and renewal of equipment, but after hostilities ceased the government seemed reluctant to pay up. The bigger companies had fared better, and some, like the Great Western and the London & North Western, had managed to set aside these payments into a depreciation fund. On the other hand, the South Eastern & Chatham was in such a bad state that its chairman would positively have welcomed a permanent nationalization under the terms of Gladstone’s 1844 Act that promised shareholders compensation equal to twenty-five years of profits. The North British, which was in a sadly decrepit state, had been forced to spend all its compensation on day-to-day expenses with the shareholders getting no return. At the end of the war, the railway claimed £616,194 but was offered only £186,194. The matter went to court and the Treasury eventually coughed up all but £1m of the much larger sum of £1
0.7m which the North British by then claimed it was owed.
However, the issue of compensation generally was not settled by the case and the government’s new creation, the Ministry of Transport, asked for independent advice from its auditors. Public opinion on the question was split. While it was widely recognized that the railways had performed well in the war, there was a lingering distaste for anything that might smack of ‘profiteering’ in wartime, a feeling which greatly muted potential support for the railways’ position. The government argued that the companies had been protected against the post-war depression and therefore were not entitled to as much compensation as they claimed. For their part, the railways claimed they had provided countless free services for the military, both passenger and freight, which the auditors estimated to have cost £112m. Taking into account other unpaid compensation, the government’s own auditors decided that the companies had a reasonable claim for £150m (including compensation), but in the event the railways received just £60m when they were restructured in 1923.
That restructuring was the subject of equally fierce debate and controversy. Under state control, the British railway network had been unified as never before and in many ways operated far more efficiently than before the war, carrying more traffic with fewer workers and less rolling stock. The pooling of wagons meant they no longer needed to be returned empty to their place of origin, locomotives were transferred to lines short of motive power and the duplication of services on parallel routes was reduced. Michael Bonavia summed it up well: ‘The lesson, that substantial economies could be obtained by getting away from traditional independence and operating the railways more or less as a single system, was learnt both by railway managers and outside observers.’30
This inevitably led to a debate about the structure of the railway industry in peacetime. Various suggestions ranged from complete nationalization – supported of course by the unions but also less predictably by Winston Churchill, still then a Liberal minister – to a return to the pre-war status quo. Both were unlikely, although nationalization was definitely considered for a while, but working out a viable compromise between the two extremes was never going to be easy. The fact that grouping was inevitable showed how quickly the mood had changed. The idea of amalgamations had, as we have seen, long been resisted by parliamentarians, but now there were virtually no voices in favour of retaining the higgledy-piggledy structure of 178 independent companies. Rationalization, rather than nationalization, was the flavour of the times, but ever since the first railways began to cover the land there have been widely differing views on how best to administer them. Mergers involving some of the larger companies had been discussed even before the war but any solution was likely to antagonize some of the big players and vested interests.
A key figure was the Conservative politician, Sir Eric Geddes, the first ever Minister of Transport, whose background as a railway manager was not evident in the decisions he made on the future of the industry. His rise through railway management had been meteoric; he was a dynamic man whose ‘breast was encrusted with medals when he was in full regalia’31 after carrying out a variety of roles during the war. After the post-war election, he had been given the important job of reorganizing the railways, despite an apparent vested interest since he was still nominally a director of the North Eastern Railway.
The government issued its proposals for the future of the railways in July 1920: initially the idea was that there should be seven groupings with Scotland and London having their own networks. Ireland, where Home Rule had just been established, though still wracked by civil war, was left alone. In what was an amazingly radical suggestion at the time, inspired by the need to respond to growing revolutionary movements in Europe, the Ministry suggested there should be worker directors on the board of the new railways. This met with objections predictably from the Railway Companies’ Association but also more surprisingly from the unions: although Jimmy Thomas, the NUR leader, had at first supported the plan, his members mostly favoured nothing less than nationalization with a 50 per cent representation on the board – workers’ control by any other name. As a result, rather strangely, the two sides of the industrial divide united to persuade the government to drop the plan for worker directors. Instead, the trade unions were given the right to represent workers at disciplinary hearings and the National Wages Board was established as an arbitrator of wage levels.
As for the structure, seven was eventually whittled down to four groupings, which became, after much wrangling over names, the Great Western, London & North Eastern, London, Midland & Scottish and Southern. London, therefore, was split between all four companies and Scotland divided up between two since the London & North Eastern had the eastern side of the country (and, oddly, the West Highland line to Fort William and Mallaig). The failure to proceed with London Lines, as it was tentatively called – a kind of precursor to British Rail’s Network SouthEast of the 1980s – was a missed opportunity to set up an integrated transport system for the capital that later could have been merged with London Transport to establish a truly regional system. Scotland, too, would have fared better with its own railway, but, as mentioned previously, that had to wait until the Scottish Region was formed by British Rail.
The Great Western was the only one of the four which easily slipped into its new structure, simply by taking on twenty-six minor, mostly Welsh, railways as subsidiaries ranging from the substantial South Wales coal and dock railways to all twelve miles of the Lampeter, Aberayron & New Quay Light railway. Its name, too, was an obvious choice, and in effect it was the only company to survive largely unchanged into the amalgamation era because it was so dominated by one company. For the other three, there was much wrangling over territory, management and, most of all, names. The Railways Act 1921, however, had an in-built Damoclean sword which forced the directors of even the fiercest rivals to the negotiating table; the alternative was allowing the structure to be determined by the bureaucrats of a new body called the Amalgamation Board.
Fortunately, the Board’s services were never called upon, apart from having to rubberstamp agreements thrashed out between the companies. How these crusty old railway directors, used to ruling their fiefdoms, must have choked at having to co-operate with their local enemies to avoid the indignity of a forced merger. The Act set the deadline for amalgamation in July 1923, but several railways merged voluntarily long before that date. There was no easy principle by which the territories could be established, although of the three the Southern was the most straightforward, taking in the London & South Western, the London, Brighton & South Coast and the combined South Eastern & Chatham railways. Even so, getting the railways to merge together by government fiat was a painful process. As the biographer of Sir Herbert Walker, the first chairman of the Southern, put it: ‘Innate rivalries do not slacken because a government passes an act of Parliament.’32 The South Western was dominant and the South Eastern and Brighton men had to fight hard for their corners with disputes over everything from electrification methods to, crucially, assessment of the relative financial value of each business so that the new shares could be apportioned fairly.
There were similar battles in the other two companies. The London & North Western had moved quickly, absorbing the Lancashire & Yorkshire, but merging with its old rival, the Midland, proved more difficult and two Scottish railways, the Caledonian and its old enemy the Glasgow & South Western, also had to be reconciled. The Scots were more willing to hand over their railways to an English-dominated concern than merge with one another, which may explain why the country did not get its own railway at this stage. The name, too, was a long source of debate with the London, Midland & Northern being put forward initially, but since it ignored the sensibilities of people north of the border, London, Midland & Scottish was chosen for what proved to be the largest of the Big Four. Again, as well as the larger railways, twenty-seven ‘constituent companies’ (subsidiaries) had to be incorporated, including tiny railways like the charming
ly named Garstang & Knott End in Lancashire, an eleven-mile line near Preston, built in 1863 to take farmers’ produce to market.
There was much controversy over the name of the fourth grouping, which took in seven large railways including the North Eastern, the Great Northern and the Great Eastern, all of which suggested that North and East should be in the title. In addition there were twenty-six smaller subsidiaries, including tiny railways such as the nine miles of the Gifford & Garvald railway company of East Lothian, which carried strawberries, pit props and malt whisky.
Because the mergers had taken place voluntarily, albeit under pressure of the Act, they were largely completed by the beginning of 1923, six months ahead of the official deadline. Eric Geddes, meanwhile, a man who had cut his teeth on the railways and steered through the legislation, left them to their own devices, perhaps sensing that the future of transport lay elsewhere. He went off first to a directorship in the motor industry, with Dunlop, and then into aviation, becoming chairman of Imperial Airways, the precursor to British Airways.
The only significant railways to be left outside the system were the Metropolitan and the London Electric Railway, which in 1933 became part of the London Underground, and a few joint lines that had been operated by more than one company. The forty other railways were insignificant, averaging just nine miles each. The amalgamation brought to an end the haphazard system created by the Victorians, which had survived because of successive governments’ reluctance to allow consolidation, out of fear of monopoly and encouragement of competition. With hindsight, it is easy to be harsh on this sprawling, cumbersome structure. After all, the system delivered a remarkably good service to virtually every community in the land, all built with private capital and no recourse to the taxpayer. But the old system, based on competition rather than coordination, would never have survived the competition with the road network that the railways were about to face.
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