Background factors

This page is being created as KPJ was utterly unaware of the private owner wagon scam which was inflicted upon the newly nationalized railways in 1947 by what Gibbins calls powerful interests (presumably House of Lords and bankers) and was mentioned almost en passant by John Helm in his excellent series of articles on the finance of British Railways in Backtrack (notably 2012, 26, 584 et seq). The episode reeks of politivcal corruption, rather like the sordid Macgregoriztion of the state railways into tiny pieces which led to the Hatfield and Paddington disasters.

Gibbins, E.A. Britain's railways — the reality. Alsagar: Leisure Products. 2003.
Self-published. As well as the short section extracted below Gibbins in effect asserts that the major collision which occurred at Colwick could be traced back to parsimony in Government funding (comparable to the Hatfield railway/political disaster) and has caustic comments on low powered diesel locomotives and failure to electrify.

BR's Inheritance

The phrase "a rag-bag of assets" has been attributed to Chancellor Hugh Dalton. In fact, he said "the railways are a very poor bag of assets¹: the permanent way is badly worn, the rolling stock is in a state of great dilapidation, railways are a disgrace to the country". (Hansard vol. 431, col. 1809). He overlooked that railways were subject to excessive use under Government control [1939-47], and that the comparries had not been allowed to maintain them to pre-war standards. During the debate, an MP demonstrated a woeful lack of research in regard to railways, that others have demonstrated: "Railways only got investment by borrowing £26m at 2.5% from Government". (col. 1832). In fact, from amalgamation in 1923 to the start of the 1939-45 war, excluding maintenance, they invested £313.8m capital in track, rolling stock, workshops, plant, etc. (Munby, Table A6). In the same debate, another MP claimed that "Government war [rail] traffic cost 75% more than traffic between civilian consumers". In fact, Government had dictated that its traffic would be conveyed at lower rates than civilian traffic (see page 14), on top of which, Government skimmed back the entire extra wartime revenue after 1940, (see pages 17,18). Had he referred to hauliers skimming the Government, he would have been 1 00% right. (see page 21). Another MP goofed likewise in respect of the inadequate £60m paid to railways for their use in the 1914-18 war (see page 5) claiming that it was a subsidy. (Hansard vol. 493 col. 306). It was not the last such political error.

Unlike Europe, which used its American Aid to restore its railways and infrastructure, the UK Government gave priority, over restoring railways to the condition in which they acquired them, to the "Empire", housing, and industry - notably the aircraft, cotton, textile, shipping and motor industries, which repaid them by losing foreign and domestic market share. (see Table 10). Little wonder that critics found cause to compare BR unfavourably with European railways. (see page 149). On 1st January 1948, the BTC had to buy, under the 1947 Act, from "powerful vested interests". (seepage 20),544,000 independently owned wagons mostly over 40 years old and in poor condition, at a price — £43m — dictated by Government. It was a bad purchase — 55,000 had to be scrapped in 1948! Some 347,000 were repaired in 1948 — BR: 260,000, private wagon repairers: 87,000. That left 26% fit for traffic. These 0.5m wagons, of 19th century technology, were included as assets when they were liabilities — 27% were still in use, causing delays, ten years later. They should have been left in private hands, until BR built modern wagons to replace them.

A study, in 1944 by the railway companies, into converting grease box wagons to oil axle boxes' noted that instead of oil axle-boxes on railway company wagons, 76% of privately owned wagons had grease lubricated axle-boxes which often ran hot — "hot-boxes". They ran hot ten times as often as oil boxes. They were lubricated by animal fats. In cold weather, the grease solidified if a wagon stood for a short time, whilst when running in hot weather, they sometimes caught fire. When a wagon was on fire, trains on all lines had to be stopped — to avoid risk to passing trains — causing serious delays. The speed of the wagons was such that two trains took up the paths of three trains of oil axlebox wagons. Trains conveying grease box wagons could only run half the distance of fast freight trains before being stopped for safety checks. Hence, transits were slower and additional manpower was required to examine and re-grease the wagons when they stopped. Sidings were needed for such examinations. Conversion would cost £6m, and should be done after the War.

About 1912, the standard wagon became 10 tons and was lifted after the 1914-18 war to 12 tons, with oil axle boxes In 1923, Government again directed that all new wagons should have oil axle- boxes. (PRO: Rail 1098/39). Government files dealing with the requisitioning of private owner wagons in 1939, showed that many were pre-1904. Owners built few wagons during the war. Of the railway companies' wagon fleet in 1939, 67% had been built since 1918, compared to 30% of the private fleet. (Munby, Tables A25.2 & A26). The North Eastern Railway — one of the few to supply its own coal wagons - from the early 20th century, built 20 ton bottom discharge wagons for shipment coal. "Ex-private owner wagons were stopped for repair twice as often as railway company wagons". (BTC 1949 Report, Page 84). Due to the excessive time that wagons were kept under load by collieries, industry and traders, the slow transits caused by their poor condition, and, especially, the failure of industry to supply sufficient steel and other materials, BR was compelled to keep large numbers of these museum pieces in use until 1957. "Some 43,800 grease boxes were in use at the end of 1956". (BTC 1956 Report, Page 36). The maximum speed for privately owned coal wagons was 20-30 mph", grease axle box wagons were at the lower end.

Interest on the Loan — to be paid by BR — raised to buy them continued for 25 years. Dr. Joy criticised "BTC's inexplicable decision to pay £43m for the fleet. BTC rushed to take them over" . (Joy, Page 77). Government announced their acquisition eight months before the Act was passed to create the BTC, and long before Members of the BTC were appointed! The BTC approved construction of 16 ton capacity mineral wagons at £375 each". (BTC minutes 4.9.52). £43m would have bought 115,000 such wagons, equating to 170,000 10-12 ton private owner wagons, whilst faster transits arising from higher speed, fewer breakdowns and minimal time out of service for repairs would have more than doubled their annual capacity. Economies would have arisen from fewer repair and examination staff, fewer delays to other trains. As coal wagons spent most of their time in a static condition: empty waiting loads, loaded at collieries waiting orders, loaded at destination — effective detention charges could have made up the balance. It made no more sense to nationalise them, than tank: wagons which remained in private hands. But, Government had a hidden agenda. They tried for decades to pressure private owners to modernise and failed. They enacted legislation in 1919 to buy them out, but did not implement it. Bringing them under the control of BR would achieve their objective without using taxpayers' money, since BR was expected to fund their purchase from reve- nue. Such a course would ensure replacement by modem wagons which in its turn would create employment. A ministerial belief that coal wagons could be widely used for other traffic was misplaced. They were unsuitable for merchandise and ought not to have been used for any other traffic. The principal other use to which they were put was to convey scrap metal from the premises of industrial coal consumers. The scrap was almost never completely unloaded. Consequently, wagons arrived eventually in colliery sidings, and frequently had coal loaded on top of the scrap. This caused damage if the scrap was not discovered before being fed into furnaces.

Pre-war railways replaced about 4.1 % of their wagons pa. In the first five years of nationalisation, BR was only allowed to replace wagons at a rate of 2.5% pa. Coupled with the higher numbers undergoing repairs as a result of heavy wartime use, it is no surprise that road haulage, which was allowed to expand its fleet, (seepage 55), succeeded in poaching substantial flows of rail freight. Another inherited burden was lines that had struggled to avoid bankruptcy in the era of the horse. The 1921 Railways Act was designed to avert the post-Great War closure of bankrupted minor rail- ways, and preserve rural transport without cost to Government. The major railways were given the option to merge with loss makers, or lose everything by nationalisation. (see "Square Deal Denied"). Scarce and precious resources — albeit on a minor scale — had to be spent on such lines, to keep them operationally safe, whilst main lines were crying out for every penny.

Dr. Dalton also ignored that the Government had forced railways to place cash allocated for maintenance and renewal in a Fund controlled by Government which had been ironically entitled a "Trust Fund". Trust was the last emotion that railways had towards UK Governments — and with very good reason, in view of its treatment of railways in regard to their competitive position and disclosure that the Fund did not belong to the railway companies, (see page 15). Evidently, Government did not think it had skimmed enough out of railways with its wartime £1bn (seepage 18) and its pre-war exploitation of railways to subsidise UK industry (see pages 7,11), which was a duty of the Government, if industry could not stand on its own feet. Responding to Dr Dalton, the LNER Chairman said that if the railways were a disgrace, it was nothing to do with railway managers. He pointed out that there were huge sums for deferred maintenance and abnormal wear and tear which they had at their disposal to spend when Cabinet permits. (Railway Gazette, 10.1.47, Page 58). The LNER Chairman told the 1947 AGM: "Ministers have forbidden or made it impossible for us to restore assets to the same good condition they were in at the start of the war". He said that com- pensation terms for nationalisation arbitrarily decided by Government would "bring a blush of shame to the leathery cheek of a Barbary pirate. Ministers have not advanced any logical argument for the basis of compensation. He can hardly be serious in asserting that the price at which a small fraction of shares change hands is a fair and correct basis for valuing the undertaking as a whole" The Southern Railway Chairman said the MoT was still in complete control of railways. They had plans for electrification, new ships, improved docks and stations. They had been allowed to approve a £1.2m London-Brighton line signalling scheme. (Railway Gazette, 29.11.46, Page 605). Modernisation begun just before the war, was completed by BR: "London-Shenfield electric service opened, despite difficulties in the supply of men and materials", (BTC 1949 Report, Page 71); Manchester- Sheffield/Wath electrification opened for freight & passenger, (BTC 1954 Report, Page 34).

1 In 1948, MP Anthony Eden reminded Dalton of his jibe when Dalton said BR was providing a cheap service. (Hansard vol. 457, col. 706). Eden said: "Not bad for a rotten bag of assets".
2 Compensation for these wagons had no regard to the condition of wagons, but was based on a normal rate of depre- ciation. Ifwagons were not kept up to normal standard, the BTC was paying more than their worth.(PRO: Mf 471223)
3 Railway companies study Feb 1944. (PRO: Rail 1098/39)
4 C.E.R. Sherrington, "Economics of Rail Transport", vol. 1 Pages 214-5.
This means that all under 12 tons capacity at the time of nationalisation were pre-1919.
5 T.B. Hare, "Practical Railway Operating", Page 24.
6 The price in 1948 would have been less. Price indices were up to 49% higher than 1948 — see Table 8.