Why Did the Midland Railway adopt a Policy of Foreign Expansion in the period 1844–1914?

By David A. Pearson JP MA (York) FRSA FCIB MCMI MInstD

Introduction and Definitions

The purpose of this essay is to demonstrate why the Midland Railway had to adopt an aggressive expansion policy into the territories of other railway companies or face serious loss of traffic that may ultimately have resulted in its absorption or amalgamation with larger or other rival concerns. To achieve this, the essay covers the following areas:

  1. The geography and purpose of the Midland at the end of its independent corporate existence. This will provide a retrospective review of the extent of the Midland system at the end of its corporate existence, with some reflections in particular instances of how the company had managed to arrive at particular locations[1]
  2. The growth of the Midland and the apparent way that this formed part of a strategic plan. Which will review how and why the company grew to such an extent.

The essay will provide comparisons with other railway companies, and the national outlook, especially with the imperial policies of the UK government. It will also consider the Midland as a unitary structure, a ‘corporate state[2]’, and the benefits that accrued to it as a result.

1. The Geography and Purpose of the Midland at the End of its Independent Corporate Existence

The Midland’s geography is easy to define. It was very similar to that of the North Staffordshire Railway in concept; they were each like an octopus[3]. Neither was conceived as such; each evolved to serve particular purposes and their subsequent growth was entirely due to corporate planning. With the Midland, the original purpose was to restore the dominant position of the coal owners of the Whitwick Collieries for the supply of coal to Leicester[4], this having been usurped some 30 years before due to the building of a canal to serve the pits of the Erewash Valley.

From this simple, lineal start (i.e. the Leicester & Swannington Railway), by force of competitive pressure allied with the occasional piece of opportunism, the Midland grew to be one of the greatest railways in the United Kingdom.

By the end of its effective independent existence in 1914, it was like a huge octopus, with its body in Derby. From there, tentacles stretched out in all directions, seeking traffic and drawing it towards the centre and feeding to the extremities. To the south, it served the Derby-London corridor, to the west, a wide swathe of territory to Birmingham, Gloucester and Bristol; with a little aberration through a joint line, it reached the Forest of Dean. By a pincer movement, to the north west of this western flank, midland coal in its trains reached the docks at Swansea via a remote, extensive and physically isolated network.

The South Western flank and the English south coast were served through a joint line with the London & South Western. Through the Midland’s satellite, the Midland & South Western Junction Railway (to which it provided both political and financial support[5] and which it almost absorbed in 1899), filled the same role to the Midland’s commercial imperium that Egypt did to the British Empire; never quite within it, never quite without it. Its route and trains, including Midland vehicles, got the Midland to Southampton.

To the east, it reached Lincoln. Peterborough and the north of East Anglia were served via a huge joint railway[6]. An astonishing but purposeful enclave was found in the south east, through the purchase of the London Tilbury & Southend from under the nose of the Midland’s ostensible yet poverty stricken friend, the Great Eastern[7]. This purchase was primarily to give the Midland access to the docks at Tilbury and the lucrative sea borne eastern trade.

North of Derby, the Midland primarily served south Lancashire, West Yorkshire and Scotland, each using very hard won routes through difficult country. Through its third share in the Cheshire Lines joint railway, the Midland had a direct route to Liverpool, Chester and Southport. Beyond Carlisle, the northern limit of its sole physical ownership, its trains served Stranraer via yet another joint line, in addition to Glasgow and Edinburgh. To all three of these, its trains were hauled over and by partner railways, often made up of jointly owned rolling stock, but always to Midland standards and design.

The north east was neglected. York formed an outpost reached from Sheffield, partly using running powers on the North Eastern Railway and the jointly owned Swinton & Knottingly[8], a very short but strategically vital connection between the railways of the north east of our Island and the rest of the national network

What it never developed in the north-east, it made up for in the north-west and Ireland. When faced with opportunity, the Midland could and did grow; it made things happen for itself in a big way. From Leeds, it reached the west coast at Lancaster and Morecambe on its own account, and Barrow and the southern lakes, by a strategic alliance with the Furness Railway[9], another company that was almost taken over by the mighty and acquisitive Midland.

From Barrow, it was a short step across the sea to Ireland, to challenge the patrician London & North Western and Great Western Railways for the Irish traffic, which the Midland did in style through interests and purchases that gave it a small navy. Once at Belfast, the Midland acquired the Belfast and Northern Counties Railway (BNCR) in 1903[10], which took it to Londonderry, the diametric opposite to Tilbury, yet just as remote from the Midland’s Derby heart and just as purposeful. This led to the most remote outpost of the Midland Empire, the County Donegal Railway that was, like much of the BNCR, narrow gauge. In itself it was the largest narrow gauge railway in the UK and one of the largest in Western Europe[11].

The extreme tentacles of the imperium in south Wales and Ulster were held via various curious corporate (in Ireland quasi-political) animals, the railway equivalent of colonies, protectorates, simple occupation and occasionally by means of direct rule from Derby. As regards Wales, the Midland operated most of the Neath & Brecon passenger traffic[12], a simple corporate occupation; with the BNCR, control rested with the Northern Counties Committee (NCC), a sort of mini-local Midland Board. In the case of the Donegal system, control was partly via another joint committee, this time with the Great Northern of Ireland, in which the Midland directly had a half share, and partly through the NCC. All these methods of control resulted in the same thing; control by Derby. In the case of Ireland, it gave Derby control of most of the railways of the north of Ireland, with political niceties to placate competitive demands and local sensibilities[13].

These massively wide spread tentacles, sucked and pumped traffic[14] round our islands from a dynamic heart that never, unlike many railways, moved to the capital. Derby was the Midland’s centre in every sense of the term and Derby it remained, as if to emphasise the roots and purpose of the Midland in serving its heartland by linking it to most of the rest of the UK. If evidence is required of the M. R.’s delight in its territorial dominance and power, consider the heraldic statement around the entrance arch at St. Pancras and compare it to the imperial gates outside Buckingham Palace. The former is an early cultural version of the latter.

Its purpose is a much more difficult issue to determine. Imagine a huge north-south X, straddling England, with its extremities lapping over to Northern Ireland, York, Bournemouth and Southend and you have the Midland in a nutshell[15]. Its traffic flows were to and from the extremities, to the crossing and vice versa. One is left wondering if many of the Midland’s customer actually used the vast range of through services as such, or whether they simply used them in sections, such as London to Sheffield, Sheffield to Scotland and so on. Certainly it would be a hardy traveller who used the Birmingham to Swansea through trains throughout[16].

Similarly, there were no links from London to Bristol, Birmingham to Manchester or Tilbury to Peterborough. It was, much more than the Great Western, for such journeys, the Great Way Round; yet it did advertise and sell tickets for such routes, which few people seem to have used[17].

Unlike the Great Western, it never made any real attempt of note to address cutting off these huge gaps. I suspect but cannot prove, that this is because in each case, by the time that the gaps became apparent, the economics were against it. The towns and cities involved were much more mature than in the early days of railway expansion. The Board of the Midland was too canny to incur the expense that Watkin had to do with the Great Central in carving up city centres. So it left well alone, possibly fearing that the immediate costs involved would wipe out any possible long-term profit.

It did address some opportunities though, to speed up traffic flows. It used the Stratford upon Avon and Midland Junction Railway for London-West of England goods traffic[18]. It tried to build the ‘West Riding Lines’ to cut off the slow route through Leeds[19]. Although partly built and used, their objective of providing the much desired through route to the north avoiding Leeds, never came to fruition. The company even provided a Manchester-Scotland service direct via Blackburn[20], but for the main part, its services got people and goods to and from the Midlands of the UK and virtually all points between.

Although we doubt very much that it ever asked itself what purpose it served, we suspect that its corporate mind, if such could be said to exist within its culture and outlook, was to provide the midlands of England with transport to and from as many parts of the UK as possible, in the most profitable way.

Certainly, when a route ceased to serve any such purpose, it was dropped like a hot potato. The Leicester & Hitchen (beyond Bedford), Leicester and Rugby and above all, the Hampton branch demonstrate this. Each at one stage served a precise, obvious and planned purpose. But they became remote and obscure branches, as soon as a better way was found of linking the Midlands with London and Birmingham.

Precisely the same argument applies to its obvious wish to drop Barrow as an Irish Port, as soon as there was a viable alternative in Heysham. This was frustrated only by a very concerned Furness Railway[21] which had paid all the capital costs and had the Midland latterly as a very reluctant tenant. Had this happened, the Furness & Midland joint line would have become a northern equivalent of the Leicester and Rugby backwater, its only remaining benefit being to provide access to the southern Lakes for west riding trippers. This wish to be rid of ultimately useless appendages is perhaps the Midland’s equivalent of Britain’s Heligoland and the Ionian Islands?[22]. One is bound to wonder that if the L.N.W.R. had not had a share in the Portpatrick joint lines, whose facilities really duplicated rather than complemented the M.R.’s Irish services, whether or not it would have shed this joint interest to the remaining Scottish partners who fed Stranraer with non competitive traffic from the north?

Unlike Imperial Germany[23] the Midland was not in the expansion business as an end; it was not an imperial concern for glory. It even tried to shed itself of the questionable glory of building, owning and operating the Settle-Carlisle line until forced to do the decent thing and build it by a series of outraged allies[24].

Its routes served a cohesive commercial purpose and complemented each other or those of satellite companies or allies.

Much more like the British Empire than the German, the Midland’s Place In The Sun, was never sought as such, it found it through common sense, good management and a careful defensive strategy. It came about as a deliberate exercise in organic growth, to serve a core need[25] to grow if it was to survive. In the process, both Britain and the Midland acquired some very strange and ill fitting territories, but overall, in retrospect, there was a very clear framework, structure and purpose to what at first seems a haphazard whole.

In retrospect (and this writer suspects in purposeful prospect at the time by a canny Midland Board), its purpose was to serve the midlands, to provide as much opportunity as possible to draw traffic to and retain it on its system, rather than lose it to those of its competitors. Also, it had to make to make a profit.

2. The Growth of the Midland and the Apparent Way that this Formed Part of a Strategic Plan

Victorian companies seem not to have been burdened with the plethora of management tools that support business in our world. The result is that there are no ‘mission statements’, there are no corporate plans as such that can be held as evidence that directors had any form of strategic vision for the growth and development of their organisations. However, it is obvious from a superficial view that some form of development plan was in place for some of the railways in mid Victorian England.

The major trunk routes did not just happen. Routes from London to Bristol, Birmingham, Manchester, Liverpool, York, East Anglia, the south east coast and Portsmouth were obvious ventures that were put together as major schemes or combinations of such schemes. So it is safe to say that with these, somewhere, each must have had some form of ‘master plan’ guiding its evolution, albeit most managed to acquire odd sections that did not seem to fit.

But the Midland was not like that. With the possible exception of the Birmingham to Bristol route, none of the Midland was ‘obvious’. The answer to the question that I am seeking to provide lies, I am convinced, in a review of the Midland’s final geography and traffic flows.

These show that despite it not being an ‘obvious’ railway like the L.N.W.R., the G.W.R. or the London & Southampton, it gained its hugely strong position as one of Britain’s leading railways[26] through careful planning and development. The Railway Year Book for 1922 shows that the Midland had the largest capital investment after the L.N.W.R. By most of the measures employed at that time, it was at the very top of the ‘Premier League’ with the G.W.R., L.N.W.R. and N.E.R. each jostling for pre-eminence, depending on which combination of measures is employed. What appears to have happened is that the Midland did one of two things:

  1. It found that it had physically to expand to meet a competitive threat (e.g. the London Extension and the Bristol and Birmingham purchase) or
  2. As a result of (a) it sometimes found itself geographically on the receiving or delivering end of traffic that originated elsewhere, which had to travel over a rival’s route to reach or leave the Midland. To retain the traffic so far as possible within its own system, the Midland had either to take over the other company (e.g. the Somerset and Dorset) or expand itself to encompass the area to which the traffic was flowing. As was amply illustrated by the lines north of Leeds, the chance that took it to a location as a side issue enabled the Midland to grasp an opportunity and turn the offshoot into a significant part of the Midland’s tree. In the case of the routes north of Leeds, a Hudson whim in buying the Leeds & Bradford took it to Skipton only for this to blossom into the glittering prize of routes to Ireland, the Lakes and Scotland. Similarly, the Manchester route (which led to the Midland’s share of the Cheshire lines and its extensive interest in the mid north west) started as a relatively local issue, a dispute with the G.N.R. over the so called Ambergate[27] line, which blossomed into the route over the Peak District[28].

As we have already noted, the Leicester & Swannington, the Midland’s oldest constituent was formed by an economic imperative; to provide a competitive route for coal from the Whitwick collieries to Leicester, in opposition to the easy route for coals from the Erewash valley provided by the Erewash Canal. The inevitable response to this was a tactical one; the canal rates were lowered to compete with the new railway[29]. However, a more strategic view was thankfully taken, the result being the promotion of the Midland Counties Railway by the Erewash coalmasters; the first sign that the corporate thinking of the future Midland was big. Although the character of the Midland Counties was to change before it was open, that vital spark of not only reacting to competition, but of being in charge of change, was there from these very humble beginnings.

But even so, it had provincial, even local thinking. It was to link Pinxton in the Erewash Valley with Leicester. But with outside influence, its promoters saw quickly that it could achieve much greater things and its prospectus promotes a railway that does this and provides links with Nottingham, Derby and Rugby, to provide access via the London & Birmingham to both of those places[30]. The directors saw beyond local competition, initially to provincial and then to metropolitan opportunity for their coal.

Had this not happened, the Midland Counties would have been a larger version of the Leicester & Swannington, providing a single route to carry a single traffic; largely concerning its self with provincial squabbles and fights to retain or grow a limited traffic. The decision to link to the L & B was a strategic move of critical importance. It gave the M.C.R. a national standing as a route into a previously un-served area and thus allowed it to take the initiative on further developments. Had it not grown, it would probably have been taken over by a larger neighbour at some stage to gain access to the pits it served. Railway history is littered with small companies that had only local ambitions, which were absorbed. The decision to expand the M.C.R. made it capable of taking over other railways in the same way. Even at the hearings before the Parliament, counsel talks about the West Country and West-Riding traffics that it may capture in time[31].

For that traffic to the north, perceptive people created the North Midland from Derby to Leeds[32], whilst the Birmingham & Derby Junction Railway made a start towards the west.

The fights between these four constituents of the Midland do not concern us here. What does matter is that their proprietors realised that for them to form one company, the Midland Railway in 1844[33], would provide a network of railways in central England that could, if things were developed properly, give a dominant position as regards control of traffic to and from the ‘obvious’ routes.

Strategically, this position only really lacked control of a major port to make that dominance as strong as those enjoyed in their fields by the G.W.R. and L.N.W.R. and the soon to be G.N.R. This latter of course uniquely enjoyed dominance of a traffic flow without control of a major port, which was due entirely to the original visionary and strategic planning of the London & York, giving it an unassailable strategic position in terms of the Scotch and North Eastern traffic.

When the Midland gained such a dominance, one of two situations tended to develop. Either:

  1. it would be so powerful in that it controlled traffic to and from its territory, that it could dictate to the larger companies who took that traffic to London and the ports, or
  2. Because it lacked its own routes to London and the ports, despite its power in controlling the traffic, it would be vulnerable. This vulnerability would be due to the other railways that took its traffic to its ultimate destination being able to dictate their own terms, which might just in the long term, be fatal to the fledgling M.R.

At its conception as one company, the M.R. formed a major part of George Hudson’s clear and stated strategic plan, to control the London – Scotland route via Rugby, Derby and York for himself[34]. Setting aside Hudson’s' dodgy business dealings, the trouble was that this plan had a fundamental flaw. Neither Hudson nor the M.R. controlled the L & B south of Rugby, nor could they. So the M.R. could not control its own traffic beyond that point. Thus traffic to the south-east and above all London, was at the mercy of the L.N.W.R. (as successors to the L & B) and its eastern flank was wide open. Here lay the opportunity that others were to grasp, to provide a quick, direct route to York and the north, which Hudson and Midland were powerless to prevent. One is bound to wonder if this set the scene for the post Hudson development of the M.R., when its purpose seemed to be to grow to defend itself.

Subsequent events were to show that the Midland’s deputy chairman, John Ellis, was actually a much shrewder operator than Hudson. He had one quality that Hudson lacked, honesty. Hudson saw a scheme to make him supreme; Ellis saw opportunities to make the Midland supreme. His brilliant purchase of the Birmingham & Bristol is the railway equivalent of Disraeli’s purchase of the Suez Canal[35]. It was seminal in setting the scene for the future development of the M. R.

For the first time, the Midland looked beyond the east and north midlands and, above all, it obtained access to a major international port. If we are in any doubt about the strategy that Ellis had started to employ, consider his speech to the shareholders and the content of the Agreement to take over the B & B by the Midland[36]. Whether Hudson stood or fell, Ellis' actions in a first class compartment on 25th January 1845, set the scene for the greater Midland that became such an Edwardian power.

When Hudson fell, the M. R. was a railway without a purpose. It now had to stand or fall on its own account, rather than as a part of Hudson’s personal Machiavellian schemes. But Bristol was not London and traffic to and from it and the other Midland outposts at Lincoln, Peterborough and Leeds was not only disappointing, it was in decline. Britain was orientated towards its capital and to be secure, the Midland had to have a route to London under its control[37]. With Mark Huish in control at Euston, any further or deeper alliance with the L.N.W.R. would result in amalgamation. Huish tried this but was not prepared to bid to what Ellis (now Chairman) wanted[38]. The Midland would be a prize indeed. Amalgamated with Euston, it would threaten Kings Cross and the fast route to the north-east, so an alliance with the G.N.R. was just as attractive to the Midland and made sense to the G.N.R. This is what resulted, thus avoiding a merger with the L.N.W.R.

The very success of the Midland’s London services in alliance with the G.N.R. (via the M. R.’s brand new Leicester - Hitchen route) led the Midland to build its own route to St. Pancras from Bedford, which opened in 1868. At last the M.R. was a metropolitan line, but not yet one of national importance. It might be compared with the Great Eastern or the South Eastern, serving a specific area by providing trains to and from London. Ellis had greater aspirations to make it of national importance, but apparently only so that it avoided handing over originating traffic to other railways and beyond that, to create new traffic for itself.

If there is any doubt about real and how aggressive the Midland’s expansion policy was feared by its rivals, then the case of the Bristol & Exeter, surely a Great Western fief if ever there was one, needs to be considered. Despite it being partly broad gauge and built by Brunel, the Midland had walked off with the Birmingham & Bristol. It did the same with the Somerset and Dorset that could not, by any stretch of the imagination, be seen as being ‘natural’ Midland territory. To add insult to injury, it had joined in this perfidy with the G.W.R.’s arch-rival, the L.S.W.R. The S & D take over had, to a very considerable degree, shaken the Great Western[39]. The Midland would plainly stop at nothing to reach the ultimate ends of the traffic that fed it.

That the GWR saw the Midland as a very real threat as regards the Bristol & Exeter, is shown in the letter from the B & E Chairman, J.C. Wall to Grierson, of the Great Western. This specifically mentions the Midland threat and the need to neutralise it[40]. A Midland take-over the B & E could, ultimately, have changed most people’s perception of the West Country. We could ask the question not only how the railways of the west would have been different, but also whether the whole area would have developed differently if the B & E had fallen to the Midland rather than the G.W.R.? Would the M. R. have been able to invent the English Rivera, for example? It seems to have been a very close run thing.

Yet still, however one looked at the Midland, its traffic, from any of its extremities, fizzled out in the Midlands. Despite its metropolitan and West Country routes, any Scotch traffic that it attracted had to be handed over to other companies in the north; at York to the N.E.R. or at Ingleton to the L.N.W.R. Before the building of the London extension, this had had the bizarre effect that any Scotch traffic that elected to use the Midland starting at either Euston on the L.N.W.R. or Kings Cross on the G.N.R.’s East Coast Route, was handed back to one or the other of them (or the N.E.R., the G.N.R.’s partner) once it reached the north. Almost all went via the L.N.W.R., which very poorly served the M.R. in this respect.

The M. R. had managed to reach Ingleton (and by the same means Lancaster and the west coast), a curious northern outpost, almost by accident, in the first place. Hudson’s scheming had given it the Leeds & Bradford, which took it to Skipton. Here, combining the opportunity with an entrepreneurial spirit that seems constantly to have driven him, Ellis saw a first class opportunity to reach the west-coast via the so-called ‘little’ North Western. If the M.R. could take over the N.W.R. then it would have a half made route to Scotland, as well as access to a port for Ireland. At Ingleton a N.W.R. branch met (or was to meet) a branch of the L.N.W.R. which would take onward the Scotch traffic via the West Coast route

Suddenly, instead of its traffic fizzling out in the Midlands, the M.R. had the glittering prospect of repeating in the north its expansion in the south and west. By taking over the N.W.R., whether he knew it or not (I believe he knew it so far as the access to the L.N.W.R. that it provided, but he surely never expected the S & C to result?) Ellis had set the course for a greater Midland that could well have outstripped even his expansionist dreams.

The take over of the N.W.R. gave the Midland a taste for the Scotch and Irish traffic. But as with the G.N.R. taking the London traffic at Hitchen, so the L.N.W.R. taking the Scotch traffic at Clapham was highly unsatisfactory. Very similar results ensued, which ultimately resulted in the building of the Settle Carlisle route. Like a pack of dominoes falling, this led to the Portpatrick & Wigtownshire involvement and a third Irish route[41] (there were already two M.R. Routes to Ireland via Morecambe and Barrow, the latter via the Furness & Midland joint line from Wennington). The company even considered seriously a take over of the friendly Glasgow & South Western, presumably using the same philosophy as before, that retention of traffic sometimes required capturing traffic. Whilst not of the same magnitude in its potential consequences as the Bristol & Exeter take over, it still poses an intriguing picture[42].

Established with the Irish traffic, the company then applies the philosophy again. It quickly took over the Belfast & Northern Counties[43]. Beyond this horizon at Londonderry was Donegal. It took over the huge County Donegal system, to ensure that the traffic that there was, came to the Midland exchequer[44].

Very similar circumstances found the expansive Midland in Manchester, which led to its considerable involvement in the Cheshire Lines and provided main lines to Liverpool and Chester.

Conclusions

Thus did the Midland, a massive corporate empire, grow to become one that was anything other than obvious, but highly integrated and very lucrative. It grew from very ordinary local beginnings, as a local railway, which could like so many others, have been taken over by larger neighbours. Instead, after a period as Hudson’s personal tool, it chose to fight for its traffic and found itself with a major regional network, handing traffic to its larger neighbours wherever it met them. With such large investment, it could obtain more return on its existing capital by spending more, expanding still further and using its care network more intensively by making a relatively marginal expenditure on extensions.

In some instances, perhaps in Wales and some might say with the Settle Carlisle (although we have our doubts in the latter case), the law of diminishing returns made a policy of foreign expansion loose money. But in most cases, expansion enabled it to deliver its traffic itself relying as little as possible on others and to grow more, new, traffic flows. It was a model of enterprise, of corporate planning and probity and very much reflected a confident and expansive period in our national story.

References