When the ''Big 4'' were nationalised...

[rdlover777]

hi, did the big 4 have a choice if they wanted to be nationalized or were they force too?

 

[mikeg]

Very much forced to. Few companies wish to be nationalised as it means they are purchased in what is essentially a compulsory hostile takeover by the state. Sure there is compensation for share holders, but it's another money=making facility lost. The Transport Act 1947 allowed for this, along with nationalisation of other modes of transport. The nationalisation was therefore enabled by act of parliament, not by the will of the company.

Or are you referring to the 1923 grouping of many smaller railway companies into the big four? I don't know an awful lot about this but I don't think individual companies had much of a choice in this matter either. It was certainly for the better of the industry (and therefore maybe shareholders also?) as a whole, but it also meant the new ministry of transport had a lot more political control over the railway (sound familiar?).

 

[EM2]

After WWII and the damage that had been done to the railway (not just in terms of physical damage, but loss of workforce, lack of investment etc.), the Big Four were almost begging to be nationalised. Profitability had taken a massive hit with the 1926 General Strike, then the Depression of the 1930s, and that was quickly followed by the war.
The LNER barely made a profit during its existence.

 

[mikeg]

Thanks for that EM2, never knew that. I knew they weren't profitable but I'd always assumed that like with certain other industries because nationalisation was compulsory they wouldn't have necessarily wanted it.

 

[Taunton]

Thanks for that EM2, never knew that. I knew they weren't profitable

The GWR was profitable throughout and mounted their own campaign in 1947 to be excluded from what was going to happen to the others, but was ignored (statements to the government were not even replied to). The Southern were in a satisfactory position as well, the LMS had real problems, while the LNER were essentially bankrupt.

There was a very large debt from the Government to all four companies for wartime services which was unpaid and which the nationalisation meant could be zeroed out. In straight financial, rather than political dogma, terms this was a principal reason for nationalisation.

 

[telstarbox]

There was a very large debt from the Government to all four companies for wartime services which was unpaid and which the nationalisation meant could be zeroed out. In straight financial, rather than political dogma, terms this was a principal reason for nationalisation.

It must have been hard to keep track of the services provided in between bombing, blackouts, staff being called up and not always coming back, and all in the days before computers as well.

 

[rdlover777]

Very much forced to. Few companies wish to be nationalised as it means they are purchased in what is essentially a compulsory hostile takeover by the state. Sure there is compensation for share holders, but it's another money=making facility lost. The Transport Act 1947 allowed for this, along with nationalisation of other modes of transport. The nationalisation was therefore enabled by act of parliament, not by the will of the company.

Or are you referring to the 1923 grouping of many smaller railway companies into the big four? I don't know an awful lot about this but I don't think individual companies had much of a choice in this matter either. It was certainly for the better of the industry (and therefore maybe shareholders also?) as a whole, but it also meant the new ministry of transport had a lot more political control over the railway (sound familiar?).

i mean the big 4 to BR
--- old post above --- --- new post below ---

After WWII and the damage that had been done to the railway (not just in terms of physical damage, but loss of workforce, lack of investment etc.), the Big Four were almost begging to be nationalised. Profitability had taken a massive hit with the 1926 General Strike, then the Depression of the 1930s, and that was quickly followed by the war.
The LNER barely made a profit during its existence.

although SR made a profit after WWII

 

[Manchester77]

Am I right in thinking southern railway (the company) survived until the mid 50s? I can't remember where I read that but it's just popped into my mind?

 

[yorksrob]

Am I right in thinking southern railway (the company) survived until the mid 50s? I can't remember where I read that but it's just popped into my mind?

The Southern Railway was subsumed into BR with the rest of the big 4 in 1948, however, the Southern Region had quite a strong identity for many years after that with its distinctive green livery.

 

[Manchester77]

The Southern Railway was subsumed into BR with the rest of the big 4 in 1948, however, the Southern Region had quite a strong identity for many years after that with its distinctive green livery.

Cheers for the explanation

 

[yorksrob]

Cheers for the explanation

You're welcome

 

[Taunton]

Am I right in thinking southern railway (the company) survived until the mid 50s? I can't remember where I read that but it's just popped into my mind?

You are somewhat correct that the corporate entity of all the Big Four companies lasted for some time after their operations were nationalised. This was principally to complete the legal work and distribute the price the government paid for the companies to the shareholders. However, this did not last into the 1950s; all four I understood were legally liquidated at various dates in late 1949, having had their operations nationalised on 31 December 1947.

 

[The Crab]

The Southern Railway was the first to be dissolved, gazetted on the 10th June 1949. Before dissolution the Railway Companies had to prove that all their property had been transferred to the British Transport Commission, that all moneys in their hands had been properly distributed and that they had entered into no agreement which the Commission might have had cause to disclaim.

I have a vague recollection that when the Midland Railway set up it's preserved operation at Butterley (1980s?) they had to be a bit careful about their title because the Midland Railway Pension Fund might still be extant.

 

[muddythefish]

The Southern Railway was subsumed into BR with the rest of the big 4 in 1948, however, the Southern Region had quite a strong identity for many years after that with its distinctive green livery.

The WR, maintaining the GWR tradition, continued to paint its coaches chocolate and cream into the 1950s. The WR (GWR) independent spirit also showed in the development of diesel hydraulic locos while the other regions had diesel electric.

 

[ianhr]

It was not only the 'Big 4' that were nationalised. There was some tidying up of smaller companies too, e.g. the incorporation of the K&ESR into BR, and a few others that had not been included in the 1923 'Grouping'. However the DVLR remained in private ownership.
I think I am right in saying that the CLC was not nationalised until 1949. This was an unusual railway in that it owned everything except locomotives, which were provided by the LNER.
Also the regional boundaries were modified several times after nationalisation. In 1948 the regional boundaries initially followed the 'Big 4' systems more closely than was the case in later years, e.g.the ex-GCR was at first entirely within the Eastern region.

 

[yorksrob]

It was not only the 'Big 4' that were nationalised. There was some tidying up of smaller companies too, e.g. the incorporation of the K&ESR into BR, and a few others that had not been included in the 1923 'Grouping'. However the DVLR remained in private ownership.
I think I am right in saying that the CLC was not nationalised until 1949. This was an unusual railway in that it owned everything except locomotives, which were provided by the LNER.
Also the regional boundaries were modified several times after nationalisation. In 1948 the regional boundaries initially followed the 'Big 4' systems more closely than was the case in later years, e.g.the ex-GCR was at first entirely within the Eastern region.

Indeed. I believe that in many ways the country would have been better off had areas such as the GC and "west of Salisbury" remained with their original regions.

 

[Muzer]

The country would probably have been better off if sectorisation had been considered sooner... it certainly made everything more efficient, and made much more sense than arbitrary regional operations duplicating similar work.

 

[yorksrob]

The country would probably have been better off if sectorisation had been considered sooner... it certainly made everything more efficient, and made much more sense than arbitrary regional operations duplicating similar work.

I agree. In the longer term, the business sectors were far and away the best way to organise the railway. I do believe though that while the regions remained, it would have been better not to have given them the oppprtunity to settle old scores.

Of course, the Doctor would probably still have wreaked havoc with his axe, so itsprobably academic to an extent.

 

[slilley]

Am I right in thinking southern railway (the company) survived until the mid 50s? I can't remember where I read that but it's just popped into my mind?

The Southern Railway ceased to exist on 10 June 1948 according to Michael Bonavia's history of the company when its dissolution was gazetted in the British Gazette.

Simon

 

[w0033944]

I agree. In the longer term, the business sectors were far and away the best way to organise the railway. I do believe though that while the regions remained, it would have been better not to have given them the oppprtunity to settle old scores.

Of course, the Doctor would probably still have wreaked havoc with his axe, so itsprobably academic to an extent.

Agreed. With regard to the BR regions, there was of course a North-Eastern Region for some years before amalgamation with the Eastern Region. AFAIK, the NE Region was broadly similar in geographical area to the pre-Grouping North-Eastern Railway, thereby meaning that, in some sense, Nationalisation reversed the effect of Grouping.

 

[steammemories]

As said here, the main reason was the cost to the government of returning the railways to their owners, after unified government use in WW2, was so great the cheapest way was to buy out the railway companies and nationalise them. The caveat on the government taking over in 1939/40 was that the railway must be handed back in the condition it was taken. Needless to say after five years of very hard work with very little input ie new engines they were very run down indeed. The southern as has been stated were in a reasonably good condition as Bullied had built the MN's and Q2 during the war by stating the MN's were mixed traffic engines, which of course any passenger engine can be so classed. As to the Great Western, the used of GWR engines on other routes was always limited by the loading gauge which for the GW was quite generous (due to 19th century broad gauge construction) in comparison to the other railways, hence they were usually on their own lines driven by their own crews unlike the LMS and LNER and to some extent the Southern. So w pretty run down network and stock of engines and rolling stock. With the other three probably being agreeable then the GW may well have simply been ignored under force majeure.

 

[Sir Felix Pole]

Nationalisation was a key tenet of Attlee's Labour government, elected by a landslide in 1945, so the 'Big 4' had little option but to comply and get the best terms for their shareholders. The biggest mistake was to purchase the private owners' wagons, mostly obsolete (and quickly scrapped), saddling BR with the debt and interest payments. The regional structure perpetuated old rivalries and frustrated attempts at rationalisation and standardisation for many years. The first generation DMUs had so many varieties to cater for perceived regional requirements that the costs were greatly inflated, whilst the WR, of course , struck out on its own with diesel-hydraulic locomotives. Conversely, building a new range of standard steam locomotives was folly - there were plenty of good modern designs that could have been continued from the 'Big 4' as a stop-gap pending dieselisation or electrification. Much could have been done also to eliminate duplicate stations and depots before road competition became serious. A classic example was Bodmin in Cornwall where WR and SR stations were maintained to the end. It interesting to speculate what would have happened if the railways had not been nationalised - BR was losing money heavily by 1956 and I suspect we would have a rather smaller 'Serpell' type network today.

 

[Taunton]

There were some lesser lines included as well, the most significant probably being the Mersey Railway with its electric services from Liverpool to Birkenhead. It is not at all apparent why the Wirral Railway, whose only significant connection was with the Mersey, had been rolled into the LMS in 1923, but not the Mersey, which was then taken into the 1948 nationalisation, but not the comparable Liverpool Overhead Railway; the latter just closed down in 1956, despite still handling considerable passenger loads, because the owners just had no capital for major renewals - this sort of shows what might have happened elsewhere without nationalisation.

In the longer term, the business sectors were far and away the best way to organise the railway. I do believe though that while the regions remained, it would have been better not to have given them the opportunity to settle old scores.

This only really became practical once the sectors had their own assets, which had broadly happened within BR by the time of sectorisation. Concepts such as "mixed traffic locomotives", or cascading of rolling stock, are incompatible with each sector determining their own fortune.

Regarding settling of "old scores", I don't really subscribe to this. The way that regions were arranged geographically, it was generally the weaker party anyway which was reduced. The Southern route to Plymouth, or the GWR route to Liverpool (well, Birkenhead actually) each carried little through traffic towards the ends of their runs. There were also a whole range of nonsenses which were overcome. For example, household coal to North Devon (Barnstaple, Ilfracombe, etc) generally came, like most household coal nationally, from pits in the Midlands and Yorkshire. The logical route was the old Midland to Bristol, thence the old GWR line west. But the Southern and LMS (in fact it dated back to the Midland and the LSWR) had arranged it to avoid the GWR altogether, it went Midland to Bath, S&D to Templecombe, whence it continued by the Southern line west. This routing and others was why the S&D carried so much more freight north of Templecombe than south of there. When the Western Region took over the S&D and rerouted it by the considerably shorter route, there were of course cries from those along the previous route, but it really was a nonsense within a single organisation.

 

[yorksrob]

This only really became practical once the sectors had their own assets, which had broadly happened within BR by the time of sectorisation. Concepts such as "mixed traffic locomotives", or cascading of rolling stock, are incompatible with each sector determining their own fortune.

Providing there's some sort of oversight of the whole shebang, there's no reason why cascades couldn't happen. Thinking of Mk2's to the Salisbury line and 308's to Yorkshire for example. However, the sectors were so large, and InterCity generally so different in nature from the others, that scope for such cascades would have been necessarily limited anyway.

Regarding settling of "old scores", I don't really subscribe to this. The way that regions were arranged geographically, it was generally the weaker party anyway which was reduced. The Southern route to Plymouth, or the GWR route to Liverpool (well, Birkenhead actually) each carried little through traffic towards the ends of their runs. There were also a whole range of nonsenses which were overcome. For example, household coal to North Devon (Barnstaple, Ilfracombe, etc) generally came, like most household coal nationally, from pits in the Midlands and Yorkshire. The logical route was the old Midland to Bristol, thence the old GWR line west. But the Southern and LMS (in fact it dated back to the Midland and the LSWR) had arranged it to avoid the GWR altogether, it went Midland to Bath, S&D to Templecombe, whence it continued by the Southern line west. This routing and others was why the S&D carried so much more freight north of Templecombe than south of there. When the Western Region took over the S&D and rerouted it by the considerably shorter route, there were of course cries from those along the previous route, but it really was a nonsense within a single organisation.

Nevertheless, I can't help but feel that had routes such as Exeter - Plymouth (via Okehampton) remained under a different branch of management, we might have been spared some of the worst rationalisations.

 

[Spamcan81]

After WWII and the damage that had been done to the railway (not just in terms of physical damage, but loss of workforce, lack of investment etc.), the Big Four were almost begging to be nationalised. Profitability had taken a massive hit with the 1926 General Strike, then the Depression of the 1930s, and that was quickly followed by the war.
The LNER barely made a profit during its existence.

I disagree. The Big Four may have been begging for the compensation due to them from the government after what they did for the war effort and the damage they suffered but they weren't begging for a government take-over.
Some quotes from what I've read - "The LMS chairman stated: “We intend to oppose nationalisation by all lawful means”
"On 12 December 1946, the Railway Companies Association “reiterated opposition to nationalisation and demanded a public enquiry. The proposed terms were unjust: £42m dividends and interest were paid in 1946 by railways; and £35m average between 1928-38 (including several years of acute depression). British Transport Stock will pay £23m at 2.5%.[13] They called for an independent Tribunal as in the 1921 Railway Amalgamations. The scheme submitted by railways and hauliers had not received proper consideration. Changes would involve great administrative and financial dislocation and impede restoration of transport for years”.
"The LNER Chairman told the AGM that the arbitrary compensation terms “would bring a blush of shame to the leathery cheeks of a Barbary pirate”. Railway Directors and others in Parliament vehemently objected to the terms, for which there was to be no arbitration as: “confiscation”, “disregard of the real value of assets and fear of arbitration”, “the acquisition did not represent a sale by a willing seller”, “the intended basis [retrospective share prices] did not reflect the value of the assets even in their run-down condition”.

 

[Taunton]

Financially there was a discrepancy between the value of the assets, which of course included much city centre property, and the revenue and particularly profit being generated. on an asset value basis which is what the shareholders' capital had bought, the railways were worth a lot, just not as a functioning railway.

 

[341o2]

as mentioned already, the railways were taken over by the government on 1 Sept 1939, two days before the announcement that "now this country is at war with Germany".

They had their profits diverted to the war effort, workshops became munitions factories and staff conscripted quite apart from being demanded to carry heavy traffic as well as coming under enemy fire.

small wonder in 1946 they were in a sorry state with huge arrears of maintenance. In 1947 the British Transport commision announced nationalisation of all heavy land transport and the main network of railways was nationalised.

As mentoned, there was opposition from within the industry. Oliver Bulleid, for example handed in his resignation

 

[ChiefPlanner]

Much opposition from the senior management of the Big 4 - Sir James Milne of the GWR refused a job with the BTC (though in reality he could afford to retire)

The early senior management of the BTC lacked shall we sat "dynamism" - but then it was severe "austerity" Britain with no funds and adminsitrative turmoil within...

 

[Taunton]

The early senior management of the BTC lacked shall we sat "dynamism"

Much of this was, having come under Civil Service government control, the usual suspects were appointed to the top positions who had no practical background, or even a business understanding. Lord Hurcomb, first BTC Chairman, was a lifelong Whitehall mandarin. Sir Brian Robertson, his successor, was a retired career military officer. Both came from backgrounds where they had no experience at all with an organisation which managed revenue coming in at the ticket office or from the freight charges, they just spent what the Treasury gave them. Hurcomb was more interested in ornithology, and became the chairman of the RSPB. I'm sure he applied for the position because the fastest loco at the time was called Mallard.

 

[Busaholic]

Much of this was, having come under Civil Service government control, the usual suspects were appointed to the top positions who had no practical background, or even a business understanding. Lord Hurcomb, first BTC Chairman, was a lifelong Whitehall mandarin. Sir Brian Robertson, his successor, was a retired career military officer. Both came from backgrounds where they had no experience at all with an organisation which managed revenue coming in at the ticket office or from the freight charges, they just spent what the Treasury gave them. Hurcomb was more interested in ornithology, and became the chairman of the RSPB. I'm sure he applied for the position because the fastest loco at the time was called Mallard.

So the Cuckoo Line was safe under his chairmanship.