The World the Railways Made Page 9

  In the United States the association of railroads with the country was even more obvious if only because they were basic to the country’s very existence. ‘In America a railway is like a river’, wrote Sir Arthur Helps in his life of the great contractor Thomas Brassey, ‘and is regarded as a natural channel of civilisation; it precedes population; and is laid down even before common roads are thought of.’ Moreover it was a universal, democratic blessing. ‘The railway is the poor man’s road,’ said a speaker at the Internal Improvements convention held in New York in 1836. ‘It is the rich man’s money expended for the benefit of himself and the poor man.’ ‘Early railroad enthusiasts always strove to promote their prejudices as national in character and destined to improve the common weal,’ wrote James A. Ward.14 ‘The new form of transport could unite discordant existing images; railways could at the same time serve individual betterment and the public good.’

  They quickly became a symbol of all the qualities on which the Americans prided themselves, their vigour, their optimism, their unconquerable pioneering spirit. As early as 1832 Charles Caldwell was confident that the ‘vastness and magnificence’ of ‘our system of railroads … will prove communicable, and add to the standing of the intellect of our country’. Not surprisingly the Americans were soon proud to be thought of as ‘a locomotive people’. ‘I really think there must be some affinity between Yankee “keep-moving” nature and a locomotive engine,’ wrote an English tourist in the 1850s, ‘whatever the cause, it is certain that the “humans” treat the “ingine” as they call it, more like a familiar friend than as the dangerous and desperate thing it really is.’

  Not surprisingly the Americans tended to forget whose idea railroads were in the first place. ‘There is one agent which we can call peculiarly our own and in the application of which the nation is destined to excel,’ said one orator.15 ‘What is more,’ he added, ‘the agent has appeared at a providential moment, just when our Manifest Destiny requires it.’ He was right: the railroad symbolised and inaugurated the whole dangerous concept.

  The symbol endured. As late as the mid-1960s, when American railroads were in near-terminal decline, they were perceived as still synonymous with the country’s national identity. ‘All social inventions take place in terms of a national “style”, which strongly affects both their emergence and their impact,’ wrote Bruce Mazlish in The Railroad and the Space Program. This study was commissioned by NASA to try and persuade the American public that the space programme was as crucial to the American sense of their national identity as the railroad had been a century earlier. ‘By accentuating existing cultural differentials, the railroad presumably made Americans more “American” ’, wrote Thomas C. Cochran in the same volume; adding hopefully that ‘it seems quite possible that space travel may have similar reinforcing effects.’

  Even sophisticated foreign observers were persuaded that before the coming of the railways the United States was a mere wilderness. Max Maria von Weber* asserted that ‘with the construction of railroads American culture began what European culture completed with them … before the humble footpath, before the cattle road, the railroad stretched itself through the wild savannah and primeval forest. In Europe the railroad system facilitates traffic: in America it creates it’ – a vision true in the West, but certainly not along the Mississippi and the many natural and man-made waterways between the river and the Atlantic.

  Above all the railroad symbolised the unity of a nation uncomfortably aware, even before the Civil War, of its deep cultural divisions. Emerson told his audiences that railroads, ‘like enormous shuttles, shoot every day across the thousand various threads of national descent and employment and bind them fast in one web’. ‘Many of the metaphorical expressions display a nervous edge,’ noted Ward, ‘they reveal a deep fear that the nation will not endure, much less prevail.’

  Not surprisingly Lincoln equated the idea of a transcontinental railroad with the unity of the continent under one flag. He ensured that the Pacific Railroad Act† was passed in 1862, at a dark time for the Unionist cause. Four years after his death the ‘Golden Spike’ finally united a country whose diversity was kept in check largely by an iron grid of railroad lines. The very idea of the Union Station, a feature of almost every major American city in the decades after 1865, symbolised a nation finally united after the agonies of the Civil War. The idea reaches its most magnificent and symbolically appropriate form in Union Station in Washington, at one corner of the magnificent site above the city which houses so many of the symbols of American unity, the Supreme Court, the Library of Congress as well as the Congress itself.

  Driving the last spike on the Candian Pacific Railway: all Canada is now connected.

  But once the continent had been united, the railroad dream turned abruptly into a nightmare for the railroad interest. Within a couple of years the names of the transcontinental’s promoters had become synonymous with greed and crookery. The dream had become reality, and once the reality was examined at all closely it turned, not into ashes, but into a mass of human frailties. And inevitably, because the hopes had been so unrealistic, and expressed in such elevated language, the subsequent let-down was the more extreme, the anti-railroad bias more deeply entrenched.

  * Previously the same role had been played by plans for canals designed to link Belgium and Germany. By 1833 railways already offered better value.

  * Quoted by Wolfgang Schievelbusch, op. cit., who describes him as ‘a philosophically-minded railroad expert and son of the well-known composer’.

  † The absence of Southern members of Congress during the war helped. Before the war they had tried to ensure that any transcontinental railroad would take a, necessarily longer, route through the South.

  2

  Politics and Politicians

  As the Americans had discovered, the railways’ sheer size and scope ensured that they were the first industry whose very existence was inevitably bound up with politics, politicians, governments, legislatures. Because of their size – and the absence of effective competition from other means of transport – the public interest, itself largely defined by their impact, demanded that politicians provide protection against the over-mighty railway companies.

  In one of the most significant demonstrations that technical changes do not, in themselves, obliterate the differences between national cultures, but merely heighten them, the response, the patterns of investment, of construction and control varied from country to country. Every government faced similar problems in controlling these enormous, octopoidal intruders, and every government reacted differently. The railways’ existence did not impose any uniform international pattern, did not lead to any convergence of national habits.

  There was, however, one fundamental divergence, between Anglo-Saxons and the ‘rest’. Almost instinctively, Britons and Americans left the shape of their railwork to market forces, to individual promoters. In Britain this relatively unregulated competition led merely to the duplication of a few lines. In the United States duplication ran riot. Even after the rationalisation of the 1890s there were twenty-one different routes between New York and Chicago, varying in length between 912 and 1376 miles, and no fewer than ninety ‘all-rail’ routes between New York and New Orleans.

  By contrast the Continental Europeans adopted the orderly ‘Belgian’ pattern, by which railways were planned and regimented, because they were deemed to be of crucial national interest. The government would ensure that the promoters received a ‘normal’ rate of return during construction. In return, the state ensured that the railways’ assets would revert to public ownership at the end of a specific period.

  The French went the furthest. They had planned a coherent rail system before a single mile of main-line track had been laid. As a result there is only one line between any two major towns: but because the network radiates from Paris connections between some major provincial centres – most obviously Lyons and Bordeaux – have ranged from the poor to the disgraceful. />
  Planning did not preclude political conflict even before any main lines had been built. By 1848 the railways represented symbols of bourgeois capitalism powerful enough for the French revolutionaries of that year to call for their nationalisation. In the event their relationship to the state was worked out only during the reign of the Emperor Napoleon III, most notably by those dedicated Saint-Simonians the Pereire brothers, whose career is covered in a note here.

  Following the Crimean War, Haussmann’s enormously expensive reconstruction of Paris and a financial crisis in 1857, the French railway companies were forced to ask for financial help. The next year the system was divided into two, the 7,774 kilometres already built and the 8,578 kilometres of lines being promoted at the time. In a typically French carve-up the network was divided between six great companies. The state guaranteed the interest due on loans required to build the new network, receiving a small percentage on the revenues of the railway companies, which, effectively, became the state’s partners. As usual the capital required was underestimated and the agreement had to be revised, but it provided France with a coherent network and allowed the state to intervene if it thought rates were too high.

  However, the politicians would not let well alone. By the mid-1860s the opposition was demanding the construction of socially useful but economically marginal local lines, and the railway companies, with their close links to the Emperor, became symbols of his over-centralised regime and its grasping supporters. After the 1870 war the opposition’s views prevailed and an elaborate network of smaller, local lines was built, largely for electoral reasons. This ‘Freycinet network’ was much abused at the time, although it made an enormous contribution to the unity of rural France.16 But the unfortunate Chemins de Fer de l’Ouest, which included a high proportion of branch lines running through thinly-populated rural areas, got into terrible financial trouble and had to be nationalised. The first lines to be taken over were in a poor financial and operational condition, so their nationalisation inevitably led to perfectly justified accusations of incompetence and over-manning. Nevertheless the French state gradually increased its influence until a unified network was formed under national control just before World War II.*

  In Germany the individual states had originally perceived the railways as a further opportunity to assert their identity. In most cases, even when private money was involved, there seems to have been a tacit understanding that eventually the state would take over. To build the line between Cologne and Minden the government provided a guarantee that the bonds would pay 3½ per cent interest. The state would also buy a seventh of the original share capital, which was arranged so that eventually the government would own the whole lot.†

  But arrangements varied. Baden modelled its system on that of Belgium. In the neighbouring state of the Pfalz, private enterprise held sway. One bemused observer17 points out that ‘both of these systems involved serious time losses and periods of indecision at the start and both slowly created a viable and profitable railroad system in the end.’ What mattered more than the system was ‘the basic determination to decisively and energetically develop the railroad through one system or another.’

  To Bismarck it was essential that the railways, the most potent symbol of German unity, should be in public hands. In 1873 he insisted on the creation of a new Imperial railway agency for the newly-united German Empire, ostensibly to work towards greater uniformity in rates, in fact to promote eventual nationalisation of the few lines in Prussia not already in the state’s hands.

  It took even the supposedly all-powerful Bismarck several years to create a Ministry of Public Works designed to take charge of the nationalisation process. Meanwhile his friend and banker, Gerson Bleichroder, was busy buying shares in lines he expected to be nationalised. In 1863 Bleichroder had enabled Bismarck to acquire cheap options on shares in a couple of railways, but his later investments were on a much larger scale. Fritz Stern, in Gold and Iron reckons that ‘at some points, roughly half of his liquid capital was invested in these shares.’ For Stern the investment represented ‘the clearest commitment to his own policy of nationalization, because failure or even undue delay in nationalizing could have cost him money.’ The commitment ‘sustained his intense interest in the nationalization of railroads.’ Less sympathetic commentators would simply have labelled Bismarck an ‘insider trader’.

  The truly enthusiastic railway politician, like Cavour, was less interested in the relationship between them and the state than simply in getting them built. ‘His methods were eclectic,’ wrote P.M. Kalla-Bishop in Italian Railways ‘there was a state plan and a state railway system, yes; but should a private company wish to build a railway it was encouraged, and, as well, there were railways jointly owned by a company and the state. The object was to get railways built by any means.’

  Even the knowledgeable Cavour assumed that politically-motivated lines – in his case those running down the Italian peninsula, specifically designed to encourage national unity – would also prove economically viable. They didn’t. Similar mistakes were made in Spain and Austria-Hungary, which both ‘constructed “star” systems, centring inappropriately upon their capital cities’.18 In Austria-Hungary like Italy, a state with more ambitions than capital, government policy was often dictated by the financial needs of the Emperor. As a result the railways changed from private ownership with state guarantees, into state ownership; then, in 1885, the state lines were leased to private companies in three networks, the Mediterranean, the Adriatic, and the Sicilian. Although these corresponded to France’s six great companies, they were far less economically successful, and nationalisation was required a mere twenty years later.

  The smaller, and generally even poorer, European countries often suffered from the depredations of British promoters. Portugal had some especially unhappy experiences, while the Swedes, after experiencing the misdeeds of the unscrupulous John Sadleir,* reverted to an earlier pattern by which the Gota canal had been built as a private monopoly under strict state supervision, using government-guaranteed funds.

  The pendulum swung the same way outside Europe. In Japan the Meiji Emperor was so anxious to encourage railway construction that the government’s own Railway Bureau actually surveyed and built the first lines, while the company received a guaranteed eight per cent yield on its capital. In India the first railways were built under a system which combined profit-sharing and a generous state guarantee. In 1869 an increasingly self-confident Imperial administration decided to take over the task of construction itself. The task proved too burdensome so private enterprise was allowed to enjoy the rewards from profitable lines, albeit with a smaller guarantee, while the state took on the burden of unprofitable routes. The government investment proved immensely worthwhile: by 1914 the government-owned railways were providing a fifth of India’s total government revenue, more than customs and excise combined.

  In the absence of such a firm imperial hand the whole messy process of construction, operation and attempted regulation of such natural monopolies provided innumerable opportunities for politicians to sell the valuable gifts they had in their power: construction rights, permission for compulsory land purchase, government backing for their loans, preventing competition once the lines were built. Individual politicians, or fleeting pro-railway majorities in Parliament or Congress, are sometimes denounced as corrupt, but, somewhat unfairly, the railway promoters have borne most of the blame. But the moralising was, and is, largely confined to Britain, Canada and the United States. In non-Anglo-Saxon countries people have lower expectations of honesty from their politicians.

  Time and again politicians everywhere proved themselves eager to be corrupted. Their underlying corruption is probably best seen during the construction of the first American transcontinental railroad. The correspondence of Collis Huntingdon, the Washington representative of the Central Pacific, which was building the Western half of the railroad, is filled with the grasping demands of politicians whom he was ex
ceedingly anxious not to have to pay, if only because his railroad was, effectively, bankrupt at the time.

  “The Railroad States of America”: how the railways bought the US Senate.

  As we saw with Bismarck, contemporary attitudes were very different from those imposed by later historians. William Cobden, the apostle of Free Trade in Britain, speculated up to his neck in the shares of the Illinois Central.19 He had received the equivalent of $400,000 from grateful British manufacturers after the repeal of the Corn Laws and put most of it into the railway’s stock, then a pure speculation. When he was unable to meet calls for further capital, his friends had to rally round. In 1859 he paid a quick visit to the railway and wrote some enthusiastic letters which were widely publicised by a grateful chairman, but at the time no-one seems to have worried about this attempt by a man regarded as more of a prophet than a mere politician to salvage his personal fortune in this way.

  The two protagonists in the great debates which dominated the American presidential election a year later had both speculated in the increased land values which accompanied even the rumour of a new railway. Stephen Douglas had enhanced the value of his real estate holdings in Chicago by securing a federal land grant for a railroad from that city to Mobile. His opponent, Abraham Lincoln, made a more modest return on his investment in land in Omaha, presumed to be the terminus for a projected railway west to the Pacific. By today’s standards, of course, Lincoln would have been perceived as a mere tool of the railroad lobby, for his fame as a formidable national figure sprang not from his few short years in Congress but as advocate for the Illinois Central. His biggest coup had been in showing how the destruction of his clients’ bridge across the Mississippi was due to deliberate action by ferrymen afraid of railroad competition and was not, as they had claimed, a mere accident.