Could the "Big Four" have surivived on their own until today?

[USRailFan]

Perhaps imagining the government in the late 40s instead of nationalising had decided to give the "Big Four" an economic aid package instead. Could the "Big Four" have survived into our time? Would we have seen an even more streamlined network in that case? Would they have ended up merging into one or two mega companies instead eventually? Or would they eventually have ended up having to be nationalised anyway?

 

[StephenHunter]

They probably would have required nationalisation by the 1960s, like in France and the USA.

 

[hexagon789]

Perhaps imagining the government in the late 40s instead of nationalising had decided to give the "Big Four" an economic aid package instead. Could the "Big Four" have survived into our time? Would we have seen an even more streamlined network in that case? Would they have ended up merging into one or two mega companies instead eventually? Or would they eventually have ended up having to be nationalised anyway?

The LNER for one never made a profit and a large part of its revenues came from goods traffic in the North East, traffic that died out in the 1970s and 80s.

The LMS made only modest profits and again saw a substantial part of its revenue from freight.

The GWR was generally the best off, having a fairly stable income from passenger and freight.

The Southern was next best off, the lack of as much goods traffic as the other 3 was more than made up for by the sizeable London and South East commuter traffic.

Given the Grouping was intended to reduce costs and make the railways more financially stable after the First World War, I think Nationalisation was inevitable after the Second.

Certainly the LNER and likely LMS would've needed financial intervention or at least swingeing cuts to reduce losses.

 

[Meerkat]

They probably would have required nationalisation by the 1960s, like in France and the USA.

That would depend on what cuts they were allowed to make and whether the government would be prepared to subsidise loss making lines via the big four.
As private companies would they have been allowed to reform labour and buy foreign locos etc in a way a nationalised industry can't get away with?
If they had been freed of the common carrier freight issues and done a Beeching before any Modernisation plan they would have been in a much better position than BR found itself in.

 

[RT4038]

I think it would have depended on (a) what/how much the Economic Aid package was (presumably to compensate the Railways for the wartime traffic and damage), and (b) changes in legislation to 'de-regulate' and allow the railway to get out of traffics/routes that it did not want to continue with.

Would the economic aid package have enabled the railways to modernise earlier? Would it have given them the capital to invest in off rail ventures such as air and road? Would the management have been up to taking the difficult decisions? Quite possibly.

 

[Meerkat]

Would it have given them the capital to invest in off rail ventures such as air and road?

That's a good point - if they were allowed to run buses they could replace their own unprofitable rail lines (until they were also unprofitable/unsubsidised)
I would think they would have electrified as fast as money allowed, particularly the Southern.

 

[contrex]

They probably would have required nationalisation by the 1960s, like in France and the USA.

SNCF was created on 1st Jan 1938, wasn't it?

 

[Bevan Price]

That's a good point - if they were allowed to run buses they could replace their own unprofitable rail lines (until they were also unprofitable/unsubsidised)
I would think they would have electrified as fast as money allowed, particularly the Southern.

Rail companies did own some bus companies - including those in the Tilling group which later became part of National Bus Company. (NBC).
For example, Western National & Southern National were jointly owned by GWR and SR, if I recall correctly.
LMSR and/or LNER also had a financial interest in some Yorkshire Municipal bus operators (Todmorden, Huddersfield, Halifax & Sheffield, I think.)

 

[Irascible]

I would imagine mergers happening - and then definite nationalisation in the late 60s/early 70s because everything was being anyway. The curiosity for me is if the Railway Clearing House could have evolved into a worthy oversight body.

( If you want a bigger what-if - imagine the British Empire had gone to war with the Russian empire in 1904-5 as very nearly happened, and the shakeup of European politics avoided WW1 and the original grouping entirely ).

 

[Peter Sarf]

I would imagine mergers happening - and then definite nationalisation in the late 60s/early 70s because everything was being anyway. The curiosity for me is if the Railway Clearing House could have evolved into a worthy oversight body.

( If you want a bigger what-if - imagine the British Empire had gone to war with the Russian empire in 1904-5 as very nearly happened, and the shakeup of European politics avoided WW1 and the original grouping entirely ).

My bold. Well its possibly about to happen 118 years later so we might yey see what happens.

I can imagine that if the big four had not been so restricted by regulations and/or got the post war reparations they were owed they would have carried on for decades at least. Big four would have closed/rationalised possibly more than the Beeching era did. Cutbacks would maybe have happened earlier but otherwise at the same time as Beeching did due to the arrival of cars+motorways.. Catch would be some duplicated lines that belonged to two different companies might have been kept open. However I expect common sense and agreements might have prevailed eventually. Modernisation might have happened earlier or on the other hand we might have seen them clinging to traditional traction until later than the 1960s. IETs replacing steam anybody ?.

 

[simonw]

Given virtually every railway in the majority of the developed world ended up nationalised, for economic reasons, it s hard to envisage a world in which the big four didn't end bankrupt and/or nationalised

 

[Meerkat]

Given virtually every railway in the majority of the developed world ended up nationalised, for economic reasons, it s hard to envisage a world in which the big four didn't end bankrupt and/or nationalised

Was that on practical grounds or ideology?
US railroads aren't nationalised, just the passenger operations (their competitive disadvantage to airlines being way worse than for us)

 

[eldomtom2]

Without government support, no. With a government willing to bail them out, like in America? Absolutely.

 

[StephenHunter]

Given virtually every railway in the majority of the developed world ended up nationalised, for economic reasons, it s hard to envisage a world in which the big four didn't end bankrupt and/or nationalised

Not all of them. Switzerland still has a bunch of private operators.

 

[Roger1973]

Would the economic aid package have enabled the railways to modernise earlier? Would it have given them the capital to invest in off rail ventures such as air and road? Would the management have been up to taking the difficult decisions? Quite possibly.

That's a good point - if they were allowed to run buses they could replace their own unprofitable rail lines (until they were also unprofitable/unsubsidised)
I would think they would have electrified as fast as money allowed, particularly the Southern.

Rail companies did own some bus companies - including those in the Tilling group which later became part of National Bus Company. (NBC).
For example, Western National & Southern National were jointly owned by GWR and SR, if I recall correctly.
LMSR and/or LNER also had a financial interest in some Yorkshire Municipal bus operators (Todmorden, Huddersfield, Halifax & Sheffield, I think.)

The 'big four' set up Railway Air Services in 1934, operating from Croydon Airport.

I don't think any of the railways wholly owned bus operators in the later years. The Great Western ran its own buses until 1933, when the operation became part of Western National. GWR (then BR) owned 50 per cent of WN, the other 50 per cent was owned by National Omnibus and Transport, which in turn sold out to the Tillings Group, which in turn was nationalised (ultimately under the British Transport Commission and its successors, but operationally separate from the Railways).

I think Southern National was similar, but with a Southern Railway share.

The railways also took part ownership in many of the British Electric Traction group companies across England, which remained private sector until 1968 as well as the Tillings companies. I'm not sure what the arrangement was with the Scottish Omnibus / Alexanders / Scottish Bus Groups.

I am aware of the (historic) existence of the Yorkshire 'Joint Omnibus Committees' that had some railway involvement, but not really sure of the detail - although it did allow Sheffield to have some Eastern Coach Works bodied buses in the (part?) BR owned fleet. ECW and Bristol products were generally restricted to public sector operators from the late 40s to late 60s, there's a bit more about it in a discussion on 'Old Bus Photos' here. Whatever allowed them to buy ECW products did not seem to apply to the (part) state owned BET companies

 

[SHD]

Not all of them. Switzerland still has a bunch of private operators.

Most Swiss “private” operators are entirely or majority-publicly owned, though (usually by a combination of the Confederation, the cantons and the communes served).

And yes indeed, Sncf was incorporated on January 1, 1938. The grouping of French mainline railways into 6 big companies had been completed by the early 1900s.

 

[simonw]

Not all of them. Switzerland still has a bunch of private operators.

My post includes the words virtually and the majority as there are always exceptions

== Doublepost prevention - post automatically merged: 9 Feb 2023 ==

Was that on practical grounds or ideology?
US railroads aren't nationalised, just the passenger operations (their competitive disadvantage to airlines being way worse than for us)

The US shows what would have happened without nationalisation, except the great distances there have allowed more freight ones to remain.

 

[RT4038]

Modernisation might have happened earlier or on the other hand we might have seen them clinging to traditional traction until later than the 1960s. IETs replacing steam anybody ?.

Far more likely to have happened earlier rather than later. The Big 4 would have wanted a far tighter grip on the pay costs. The BR Standard locos would have been diesels, and I expect the railcar fleet would have been built a little differently to convert more main passenger services (and not for branch lines, that would have been closed earlier). If steam locos had been kept as long as 1968 they would certainly have gone bankrupt.
Whether the Big 4 got into buses more would depend on the regulatory framework.

 

[Magdalia]

The regions still had a considerable degree of independence under the British Transport Commission from 1948 until about 1960. Given that the Southern and Western Regions weren't much different from their big 4 predecessors, and their "less worse" financial position, I suspect that things would not have developed very differently there.

The ex LMS had the strongest influence on the BTC's central policies so I suspect that the LMS would have followed a similar line of development. Traction wise, they would still have used some sort of derivative of 10000 and 10001 to replace some steam but it is likely that they would still have built lots of 9Fs for heavy freight.

The really interesting speculation relates to the LNER. After the war they had 2 major electrification projects running plus a plan for 25 diesels to work ECML expresses. Much would have depended on what finance they could raise to build on these. If they could have afforded it, then they would have done lots of electrification at 1500v dc.

But all would have still been hit by the same economic storms especially industrial relations in the 1950s and loss of freight traffic, especially coal, in the 1960s. If the LNER had managed to build an electric route from the Nottinghamshire/Yorkshire coalfield to London by the mid 1960s then that probably would have survived and the LMS might have had to close the Midland Main Line.

 

[Meerkat]

The regions still had a considerable degree of independence under the British Transport Commission from 1948 until about 1960. Given that the Southern and Western Regions weren't much different from their big 4 predecessors, and their "less worse" financial position, I suspect that things would not have developed very differently there.

The ex LMS had the strongest influence on the BTC's central policies so I suspect that the LMS would have followed a similar line of development. Traction wise, they would still have used some sort of derivative of 10000 and 10001 to replace some steam but it is likely that they would still have built lots of 9Fs for heavy freight.

The really interesting speculation relates to the LNER. After the war they had 2 major electrification projects running plus a plan for 25 diesels to work ECML expresses. Much would have depended on what finance they could raise to build on these. If they could have afforded it, then they would have done lots of electrification at 1500v dc.

But all would have still been hit by the same economic storms especially industrial relations in the 1950s and loss of freight traffic, especially coal, in the 1960s. If the LNER had managed to build an electric route from the Nottinghamshire/Yorkshire coalfield to London by the mid 1960s then that probably would have survived and the LMS might have had to close the Midland Main Line.

The regions wouldnt have had the independence to raise money and invest, as the private companies would have had. And were still bound by political pressures such as that to use British loco builders who couldn't really deliver.
I suspect the necessary cuts would have come quicker, taking the time pressure off needing new steam so they could move directly to electric and diesel.
Industrial relations would be different if there was more risk the railways would just go bust and have to brutally cut jobs, and had been free from Treasury based pay restraint.

 

[Irascible]

Given that the Southern and Western Regions weren't much different from their big 4 predecessors, and their "less worse" financial position, I suspect that things would not have developed very differently there.

They weren't completely autonomous though, were they - would there have really been all that newly built steam to fill in the holes waiting for the Grand Modernisation Plan if there wasn't a plan?

There woud have to be some sort of national plan at some point, no government would keep funding so much redundancy and the incoming competition at the time is road and eventually domestic air, not other railway companies. Who's going to write plans? if there's a national plan then at some level it only makes sense for a rail network authority to be formed - at least for trunk routes. Would have been interesting if central authority had declared a list of essential routes & let the private companies decide what to do with the rest.

 

[kylemore]

Another interesting "what if" is what if Ernest Marples had fallen under a bus in 1959!

 

[Magdalia]

The regions wouldnt have had the independence to raise money and invest

They weren't completely autonomous though, were they - would there have really been all that newly built steam to fill in the holes waiting for the Grand Modernisation Plan if there wasn't a plan?

The regions were given investment money as part of the Modernisation Plan, they didn't need to raise it! And they had a lot of independence on how they spent it.

The Western made little use of BR Standard steam, broadly speaking it went straight from GWR steam to diesel hydraulic locomotives, which was its own independent policy.

The Southern invested in electrification in Kent, plus its own specifications for diesel and electric locomotives, and diesel electric multiple units. It used a bit of BR Standard steam but not much. Southern Railway might have needed to build a few more steam locos of their own designs, but the numbers would have been small.

Neither invested heavily in small diesel locomotives which was one of the big mistakes of the Modernisation Plan.

I suspect the necessary cuts would have come quicker, taking the time pressure off needing new steam so they could move directly to electric and diesel.

incoming competition at the time is road and eventually domestic air, not other railway companies.

I don't think so. What was happening to passenger travel was trivial compared to what was happening with freight. The railway was still moving huge amounts of coal over long distances, traffic that couldn't be moved any other way. Rural communities were still heavily reliant on the railway for freight to get coal in and agricultural produce out. The LMS and LNER would still have been competing with each other to move all that coal. And, if industrial relations had been better, the decline in merchandise freight would have happened much more gradually in the absence of the 1955 strike.

What knocked the railway most was loss of coal traffic through the development of the National Grid and the exploitation of gas from the North Sea. If the Big 4 had survived, would electricity and gas have still been Nationalised? If not, would big baseload power stations and the National Grid have happened more quickly or more slowly? Would conversion from town gas to natural gas have happened more quickly or more slowly?

Whenever the coal traffic declined would have been when the government would have needed to step in.

 

[mike57]

I think the issue is what you mean by 'survive' The railways have required subsidies for many years, and these subsidies mean that in effect the government is in control as they have the purse strings, very much like the current situation with ToCs. So even if the control is arms length its still there. The alternative is a Serpell world where only the major routes have survived. I will say I am not a fan of nationalisation but where something has to be run as a public service rather than a commercial undertaking any opertating model has its drawbacks.

As profitable private companies with minimal government control beyond normal commercail 'plc' type regulation I think the answer is a clear no, unless you end up with a massively reduced network with just the major inter city routes surviving

 

[Meerkat]

The government stepping in wouldn’t have had to mean nationalisation.
they could have paid PSO subsidies to the big four for any passenger services they wanted.
Would the closure process have been easier for the big four? Easier for the government to shrug and say ’not our fault’.

 

[coppercapped]

Another interesting "what if" is what if Ernest Marples had fallen under a bus in 1959!

It would have made no difference whatsoever.

(Except to remove him from RailUK's list of bogeymen...!)

== Doublepost prevention - post automatically merged: 9 Feb 2023 ==

Perhaps imagining the government in the late 40s instead of nationalising had decided to give the "Big Four" an economic aid package instead. Could the "Big Four" have survived into our time? Would we have seen an even more streamlined network in that case? Would they have ended up merging into one or two mega companies instead eventually? Or would they eventually have ended up having to be nationalised anyway?

Returning to the original question, there would have had to have been more changes to the legal and financial framework in which the railways operated for them to have survived that just throwing money at them.

Don't forget that the railways' financial performance had been slipping from the end of the 19th century. It had received another blow from the development of reliable petrol and diesel engines during the First World War and the presence of people who knew how to operate them. Four years earlier the people would have been using horses.

Some assumptions for the first ten years:

• the ‘Common Carrier’ obligation for freight traffic would have to have been abandoned. (Very simply, the ‘Common Carrier’ obligation meant that charges for each type of traffic were fixed and published and that the railway company had to carry the goods offered. It was easy for the new lorry owners to undercut the railways as they knew what the railways charged).
• the Traffic Commissioners' control on rates and charges would have been abandoned. (The railways and canal companies could not set their own rates and charges - this was done by the TCs and always involved a delay).
• the growth of car ownership would have been the same as real history
• employment levels would have remained as they really were
• the country’s economic condition would not have been significantly different from that which really happened.

Dropping the Common Carrier obligation would have been critical to the survival of the 'Big Four' - it would have meant that it became useful and necessary to develop proper management accounting which could allocate costs and revenues to particular activities. The railways would have had a proper understanding of their revenues and costs by 1948 or 1949 at the latest - 15 years before Beeching.

What certainly would have had to have happened was that the return on capital would have had to have been greater than that pertaining at the end of the 30s (around 2% to 2.5%) in order to attract investment capital. Together, the effects of the Common Carrier obligations, the rate-setting by the Transport Commissioners and the after-effects of the Depression meant the railways were starved of investment funds.

The financially weakest of the ‘Big Four’, the LNER, had proposed a ‘Landlord and Tenant’ structure - it would sell its network to the Government and pay rent to run its services over it. (This sounds very much like the structure adopted 50 years later…!) If the LNER could have got rid of much of its excessive infrastructure where heavy industry had suffered badly in the 1920s and 30s (especially in the North East), it might have been able to survive as a company. Alternatively it could have regrouped as two companies - one with the profitable parts and either closed the other or sought other sources of funds from local or central Government.

I suspect that the other three would have continued much as before - transport conglomerates operating trains, road coaches and buses, lorries, hotels, ferries and airlines and developing those fields which gave the best return. I could well see the GWR, using its experience in selling holidays in Devon and Cornwall, being an early player in the package holiday boom with flights to Majorca with GWR-branded DC3s!

I don’t know what would have happened to loss-making suburban services - either the railways would have put up their prices and priced themselves out of the business or, with increasing car ownership and congestion, the city authorities might have come up with something like the Public Services Obligation subsidy 20 years earlier.

For the next attempt at alternative history - how would English history and the language have developed if William had lost in 1066?

 

[mike57]

It is surprising how frequently when you run an alternate history scenario the results converge back to the same outcome, because unless you change several of the input parameters the drivers which ended at the current result still exist. In the case of the railways the problem wasn't to nationalise or not, it was how to turn something which at least in part was becoming redundant into something which had a future.

I think the key to changed outcomes would have been getting rid of the real basket case routes earlier, and introducing more economical working practices on lightly used routes, I am not sure that retaining the big four would have acheived either of these goals.

Coming forwards a few years to the elimination of steam, the original pilot diesel plan was good, it was only when a decision was made to purchase large numbers of dubious designs that it all unravelled. Had the network contraction been more measured, starting earlier but at a slower pace then the pressure to replace steam might have lessened, and the pilot diesel program would have led to a better final product with none (or less) of the dead ducks that wasted money.

DMU's seemed to be the way forwards for branch line services, the GWR had made progress in this area pre war, and the DMU seemed less fraught than the locomotive introduction so maybe if resources had been diverted... But these are all supplementary what ifs.

 

[simonw]

The regions were given investment money as part of the Modernisation Plan, they didn't need to raise it! And they had a lot of independence on how they spent it.

The Western made little use of BR Standard steam, broadly speaking it went straight from GWR steam to diesel hydraulic locomotives, which was its own independent policy.

The Southern invested in electrification in Kent, plus its own specifications for diesel and electric locomotives, and diesel electric multiple units. It used a bit of BR Standard steam but not much. Southern Railway might have needed to build a few more steam locos of their own designs, but the numbers would have been small.

Neither invested heavily in small diesel locomotives which was one of the big mistakes of the Modernisation Plan.




I don't think so. What was happening to passenger travel was trivial compared to what was happening with freight. The railway was still moving huge amounts of coal over long distances, traffic that couldn't be moved any other way. Rural communities were still heavily reliant on the railway for freight to get coal in and agricultural produce out. The LMS and LNER would still have been competing with each other to move all that coal. And, if industrial relations had been better, the decline in merchandise freight would have happened much more gradually in the absence of the 1955 strike.

What knocked the railway most was loss of coal traffic through the development of the National Grid and the exploitation of gas from the North Sea. If the Big 4 had survived, would electricity and gas have still been Nationalised? If not, would big baseload power stations and the National Grid have happened more quickly or more slowly? Would conversion from town gas to natural gas have happened more quickly or more slowly?

Whenever the coal traffic declined would have been when the government would have needed to step in.

a lot of the gas industry was in public ownership even before the formation of British Gas, until natural gas came on stream it was loss making.

 

[Bevan Price]

The government stepping in wouldn’t have had to mean nationalisation.
they could have paid PSO subsidies to the big four for any passenger services they wanted.
Would the closure process have been easier for the big four? Easier for the government to shrug and say ’not our fault’.

The "Big 4" had been withdrawing uneconomic passenger services ever since they were created - there were many closures in the 1920s aand 1930s, but spread over many years, rather than concentrated into a few years as happened with the Marples/Beeching closures.

 

[Magdalia]

a lot of the gas industry was in public ownership even before the formation of British Gas, until natural gas came on stream it was loss making.

Yes, but local gasworks with no long distance pipelines that had to be fed with large quantities of coal delivered by rail.