Railways in Britain and the United States 1830-1940

Published by EH.NET (January 2002)

Geoffrey Channon, Railways in Britain and the United States, 1830-1940.

Aldershot: Ashgate Publishing, 2001. xi + 341 pp. $79.95 (cloth), ISBN:

1-84014-253-7.

Reviewed for EH.NET by Albert J. Churella, Social and International Studies

Program, Southern Polytechnic State University.

The title listed above provides a hint of the ambitious geographic and

chronological scope of this work. The author’s intent is not to provide a

thorough or comprehensive treatment of his subject but rather to explore

selected topics in “railway promotion and its associated finance; the

recruitment of railway directors; investment appraisal by a mature company;

management structures; inter-railway relationships; locomotive production; and

the powers of, and relationships between, different corporate ‘stakeholders,’

including shareholders, directors, managers, and labour” (p. 296) in barely

more than three hundred pages. At its worst, this multifaceted approach to so

many diverse subjects is fragmented to the point of schizophrenia; at its

best, however, the book offers important insights into British and, less

compellingly, American railway practice over the span of more than a century.

In the first two chapters, the author sets up Alfred D. Chandler, Jr., as a

kind of straw man, in particular preparing the reader for attacks on the

id?e fixe of the primacy of the unrestrained visible hand and the

syllogism that American managerial capitalism always trumped British familial

capitalism. This somewhat oversimplified distillation of the Chandlerian

synthesis seems unnecessary, since business and economic historians (including

several quoted by the author) have thoroughly explored the rich complexity of

American and British business enterprise. This minor criticism aside, the

author does provide an excellent overview of the seminal literature relating

to railways on both sides of the Atlantic.

The heart of the book begins with a series of case studies on selected topics

in British and American railway practice. Channon examines the role of Bristol

merchants in financing the Great Western Railway in the 1830s, indicating that

traditional financial methods, based on reputation and trust, provided

sufficient capital for this enterprise of unprecedented scale. When a

different railway, the Midland, constructed a new line to London in the 1860s,

this decision was based neither on traditional business models of profit

maximization nor on the systemized chain of command represented by

organizational charts. Instead, the general manager, anxious to increase his

power and status within the organization and within the larger realm of

British business, persuaded a small but influential group of directors to

authorize construction. Personal goals and corporate culture thus had a

significant impact on corporate policy.

Channon next provides a brief discussion of largely unsuccessful pooling

arrangements to regulate traffic and revenues between England and Scotland in

the mid-to-late 1800s. He returns to the Great Western in the following

chapter, showing how the failure of multi-company cooperative agreements led

to state-mandated consolidation in the form of the 1921 Railways Act. Many of

the companies grouped into the Great Western system had been, in effect,

subsidiaries of that company before 1921; this, combined with managerial

intransigence (in the form of an inflexible corporate culture) and a depressed

coal market, severely limited gains in efficiency stemming from consolidation.

Ultimately, the Transport Ministry, like the American Interstate Commerce

Commission, did not appreciate the extent to which railroads constituted only

one facet of a transportation industry that was rapidly becoming more

competitive.

The next three chapters, perhaps the most compelling of the book, provide a

group biography of the directors of the Great Western during the nineteenth

century. The author’s assertion that these directors “… shared the same

(elite) social, educational and cultural backgrounds and assumptions” is

hardly surprising, nor will the reader be shocked to learn that they were “…

also men who were influential in a political sense …” (pp. 301-02). What is

fascinating, however, is the depiction of the acculturation process that

ensued when members of Britain’s landed aristocracy first viewed railway

directorships as a socially acceptable form of contact with the hurly burly

world of commerce and industry, then used their railroad experience and

connections to infiltrate corporate boardrooms in other industries.

There follows a quantum leap both in geography and subject matter in two

chapters depicting labor relations on the Pennsylvania Railroad during the

late nineteenth and early twentieth centuries. Channon argues that the

“Standard Railroad of the World” had shown little interest in standardizing

labor policies before the First World War, preferring to let local supervisors

establish hiring guidelines, wage rates, and disciplinary procedures on an ad

hoc basis in response to local conditions. The growing strength of organized

labor, not the visible hand of management, finally forced the Pennsylvania to

adopt standardized and centralized labor policies.

In the only truly comparative chapter in the book, Channon analyzes the

divergent paths of the American and British locomotive industries. This

divergence resulted from conditions unique to each country, and indicated that

there was no one best practice for locomotive manufacture. Still, the British

tradition of railroad-built locomotives more nearly fit the Chandlerian model

of vertical integration than did the American practice of buying locomotives

from outside suppliers.

The scope of Railways in Britain and the United States is commendably

wide, yet Channon’s reach exceeds his grasp. He simply attempts to cover too

much territory, introducing compelling topics without being able to fully

follow through on their analysis. He provides several superbly researched

chapters on British railways, yet these chapters fall well short of a

comprehensive treatment of a particular railway or its managerial structure as

it changed over time. His discussion of American labor practices lacks any

basis of comparison in the British experience. Channon correctly points out

that the 1921 Railways Act in Britain represented far more comprehensive state

regulation of private enterprise than did the 1920 Transportation Act in the

United States, yet does not provide an American regulatory counterpoint to the

British experience. At the risk of oversimplification, much of the book seems

to be an attempt, if not to refute Chandler, at least to indicate that the

railway industry in the United States is far more complex and less

managerially driven than Chandler alleged, and that British enterprise is more

efficient, more thoroughly integrated, and less dominated by family

connections than Chandler’s Scale and Scope might indicate. These

points are well taken, but they have been explored more thoroughly in other,

better-integrated studies.

These criticisms by no means destroy the value of the book, however. As

Channon points out, Railways in Britain and the United States is a

collection of essays, not a monograph or a synthesis. The somewhat curious

selection of topics notwithstanding, many of these essays raise fascinating

issues and should stimulate further discussion and research. The

breathtakingly high cost of the book begs the question of whether the author

could have found a more affordable venue for some of the more

thought-provoking essays — in journal articles, for example — but every

serious student of British or American railroad history, and anyone who

remains convinced that the Chandlerian synthesis explains absolutely

everything, should order this book (through interlibrary loan) and appreciate

its insights into the messy and unpredictable world of railroad transportation

in Britain and the United States.

Albert J. Churella is an assistant professor in the Social and International

Studies Program at Southern Polytechnic State University. He is the author of

From Steam to Diesel: Managerial Customs and Organizational Capabilities in

the Twentieth-Century American Locomotive Industry (Princeton: Princeton

University Press, 1998).