The city of London has made no attempts to impose a planned network of lines and largely inconsequential attempts from the 1960’s onwards to regulate fares and to force the railway companies to rehouse the working-class families which their lines displaced. It seems as though Parliament was merely a venue for capitalists and landed aristocrats to struggle for or against each proposal, depending on the differential costs and benefits which each railway proposal conferred on them and their friends. By the mid-1960’s, the combination of both houses reflected a relatively even balance between landed interests and industrial, mercantile and financial interests, thus it could be said that the changing fortunes of many railway entrepreneurs depended on the fluctuating patterns of dominance and submission between the two major segments of the ruling [431 class.
Parliamentary power was exercised with a vengeance against the railway companies in 1946 when seventeen out of nineteen proposed urban lines and termini were flatly rejected. Had they all been sanctioned, the topography and character of the central area would have been completely altered, probably for the worse. In the words of John Kellett, “The Metropolis would literally have been cut into pieces.” Instead, Parliament prohibited any incursions within an oval, four miles from east to west and one and a half miles from north to south (bounded by the Circle Line of today). This decision had far reaching consequences for further railway and transportation developments and for the spatial form of the central area.
In the words of John Kellett, it “…not merely distorted directly the pattern of railway building, but also exercised an arbitrary and indirect influence upon the conditions of competition between companies. The central government’s unique exercise of a legislative veto combined with metropolitan central land values to erect a barrier around the core of the city which was virtually impassable to surface railways.” This position was re-affirmed in 1963 when ten out of thirteen proposals were rejected. A major result of this legislative intervention was the controversy surrounding, and the eventual construction of, a circular railway linking all the central stations. And, on a more general level, it snuffed out any competition which might have developed between large companies serving London from the north and south. The railway companies paid a high price for their compulsory purchase privilege. Parliament had not accurately defined what constituted a ‘fair market price’ for land acquired compulsorily. Arbitration cases ruled generously in favour of landowners and quickly established the principle that the price to be paid for such land by the railway companies should be based on its value to the vendor, to which should be added compensations for interruption of business, loss of good will, various damages to surrounding property, and sometimes even for loss of possible future gain! To this sum, a further 10% was added for the privilege of compulsory purchase. As a result, railway companies probably paid twice the current market value for land. Railway companies were prohibited from becoming land speculators in their own right.
They were required to sell surplus land on completion of their scheme. Once again, this put them at a disadvantage in the land market, this time as vendors. Buyers knew that the land had to be sold and were therefore able to bid lower than its true market value. And if at some future date the railway companies wanted to extend their lines, they would have to pay even higher prices than before, an increase for which their earlier investments were largely responsible.
In view of all this, one railway company director’s complaints of the high costs incurred by the railways in these transactions is hardly surprising and probably 461 representative of railway capitalists in general: “The Lands Clauses Act was passed at a time when landowners were absolutely supreme in Parliament, in 1945, and did just whatever they liked; and although we have to pay large sums by way of severance, we do not get anything whatever for the increment in value we give to the balance of the land.” Landowners, on the other hand, benefited in two ways. Firstly, railway lines increased the accessibility of much of their land, making it ripe for housing development and therby increasing its value. This fact was the basis of a jingle which appeared in Tarbuck’s Handbook of House Property in 1975: “The richest crop for any field, Is a crop of bricks for it to yield. The richest crop that it can grow Is a crop of houses in a row.” Though the railways did bring destruction, congestion and pollution in their wake, they also enabled higher prices to be charged for urban and especially suburban land, withough any effort or further investment on the landowners’ part. Secondly, landowners benefited even more as the inflated awards of arbitration proceedings were translated into legitimate market prices. Thus, railway development generated windfall gains for landowners.
In 1961, Henry Davies wrote the following graphic ‘description’ of this process: “If the first railway engine had been laden and fed funnelwise, with guineas, and if the wheels had been constructed with an apparatus for whirling the gold by centrifugal action over the land it traversed we should have an allegory in action which would correctly describe the working of the railway system.” And the fundamental reason why the landowners benefited was, to put it simply, because they owned the land, without which the railways could not exist. In sum, then, railway development was beneficial to most landowners while the railway companies were not permitted to gain from the increases in land values which their investments facilitated. However, we must return to our original question which has not yet been answered: what caused the railway companies to locate their lines and terminals where they ultimately did?
We have seen that while Parliament granted them the powers which were necessary to make them viable competitors in the land market, it played an essentially passive role with respect to the placement of lines and terminals. What was the active force which determined the railways’ locational patterns? I will argue that the relative power of the many actors in the land and housing markets, which was based on their position in the class structure and on the leasehold system of tenure, was the major determining factor; that technological necessities and economic efficiency were of secondary importance and only became significant once the struggle for land had been decided. A brief but closer look at the power relations of the land and housing markets of London during this period and of the railway companies responses to it should clarify my argument. We have seen that large landholdings predominated in inner London, especially in the north-west. Though these great proprietors were very powerful, it was obviously more advantageous for railway companies to deal with them, in preference to a multiplicity of small owners, as the negotiations were usually much quicker, simpler and cheaper. But the power of both large and small estate owners in the land market and their willingness to sell to the railway companies was in turn largely influenced by three interrelated factors: the power and status of their tenants, the use to which their land was put and the physical condition of their property. On the top of the power spectrum were the spacious, well-maintained inner-north-west residential areas, where both leaseholders and estate owners, whose joint interests the lease agreement protected, strongly opposed the incursion of railways into their neighbourhoods.
They had the economic and political power to defeat the railway companies if they attempted such ‘invasions,’ or to impose costly qualifications on the construction of those few railways which they could not oust. H. G. Wells’ comment in Tono Bunday, “that the great railway termini had been kept as far as possible from the ‘Great House Region,’” was therefore hardly surprising. In consequence, the North London Junction and Regent’s Canal railways, for example, failed to gain authorization because they would have infringed on the Crown land surrounding Regent’s park, whose imposing terraces and villas housed ‘the first class of society.’ The Bloomsbury, Portland, Grosvenor and Berkeley Estates were among the others which were successfully protected from the incursion of the railways. The Great Central’s Marylebone station extension line was forced to skirt the western flank of the Crown’s estate and to comply with the Portman Estate’s burdensome and expensive restrictions. Eton College’s Charcot estate, which was built for ‘respectable but undiscerning clients,’ successfully insisted upon clauses in the London and Birmingham Railway Bill which required extensive tunnelling under the estate to reserve itsfuture amenity. Thus, even at a relatively detailed level of spatial definition, the power of wealthy landowners and tenants determined the physical form of the railways.
Within these parameters, railway companies were free to maximize technical and economic efficiency. Also at the top of the ‘power-in-the-land-market league’ were the properties which made up the core of the central business district. The City Corporation was aware that railway development was beneficial to the City, as evidenced, for example, by their financial support which rescued the almost moribund Metropolitan Railway because of the good communications which it would provide. But they and the powerful interests at the financial heart of the world,were not prepared to allow the railway companies [511 to carve up the City. In the words of John Kellett: “Residential areas, historic buildings, graveyards, hospitals, craft workships, even, where necessary, factories, could be traversed or swept away, but not the central Exchange area.” Thus, the Parliamentary legislation of 1946, which prohibited railway building within the central and West End area, bounded by the Circle Line of today, was essentially a recognition and ratification of the power and interests of City businessmen and West End residents and landowners. The virtually total exclusion of railways from this area was absurd on grounds of technical or economic efficiency, even allowing for the high cost of land in this area.