Why was the LNER poor?

[Trestrol]

Can anybody enlighten me why the LNER was so poor? They carried lots of coal and had connections to most major cities. They also carried goods from the east coast ports although not as big as say Liverpool the traffic must have been cosiderable. Did they have so many lightly underused branch lines that never paid their way? can anybody help.

[52D]

I dont think the LNER was that poor relatively speaking. There was plenty of engine construction and Station rebuilds although some lines really needed rationalising such as the lines around the Nottingham area. Profits were shown as poor but this may have been creative accounting. I hope this thread takes off i would like more learned opinions than i can give.

[richard]

The LNER covered a lot of coal and industrial areas. This was very profitable for some railways - especially the NER, but without the coal traffic these lines did not do as well.

What is rarely understood is that Britain reached "Peak Coal" in around 1913/4. Coal production has been declining ever since with only small peaks here and here (typically after a strike ends).

This only gets worse from 1926 with the Depression. There was a wave of infrastructure projects in the late 1930s when the UK Government started to invest in/subsidise such projects in order to get the economy going (like F.D.Roosevelt did a few years earlier in the US). Some of these continued into WW2. Some were cancelled by WW2 (some of the Underground upgrades), others were postponed until afterwards (eg. the Woodhead Electrification)

Richard

[stembok]

The Railways Act of 1921 was to lead to the Grouping of 1923. Its intention was to group companies into the 'Big Four' in order to promote efficiency and place the industry on a sounder economic footing. Unfortunately, while it recognised the growing threat to the railways from more nimble and in many cases more convenient competititors, such as road haulage, it still left the railways hobbled by outdated 19th century legislation in the setting of rates and charges, originally formulated to prevent the railways abusing the monopoly power they then held. In his first annual report to LNER shareholders William Whitelaw mentioned that since 1913 coal and engineering products had doubled in cost and labour costs had risen by 148%, yet rates charged by the railway companies had risen only by some 50-60%. After 1923 the company balance sheet deteriorated, with 1926 the year of the General Strike and 1938 very poor years, together of course with the depression years from 1929-32. In addition the companies making up the LNER were, with the exception of the NER, not always wealthy. In 1922 the NER had paid a 7.5% dividend, but the GER paid only 2.75% on its lowest shares and the GCR nothing at all! Nor was the NBR a particularly prosperous concern. The NER,unfortunately, had much of its traffic and wealth rooted in the very industries which suffered most in these years and so was able to do less to be an economic 'engine' (no pun intended) for the group as a whole, which had probably been a major intention by the government when the Group was formed. Economic life on the LMSR and the GWR was tough, but they did not labour under the same difficulties as the LNER. The wonder is that the LNER managed to put on such a 'good show' in the circumstances. There had to be continual scrutiny of costs and for instance the railway was never in a position on the locomotive side to do what Stanier was able to do in restocking the LMS

[industrial]

Their is one part of transport that the LNER was better over the LMS and that was the named trains such as the Silver Jubilee and the Coronation/West Riding sets with the LMS not a mixture of existing and new coaches. Also in the case of the engins the LNER were in a better shape than the LMS with poor MR and not much better LNWR engins .

[hq1hitchin]

Also the LNER served a large part of the country where agriculture was the main economy - this went downhill in the 1920s and 1930s and this further weakened the company. They made brave attempts, certainly, at encouraging and promoting rail travel by such means as introducing the streamliners but things were hard for most ordinary people in the 30s and it was not until the war years that traffic really picked up.

Not sure I would want to denigrate Mr Stanier's locomotives or his coaching stock, not many duds there.....

[industrial]

Stanier built good engins but what was built before him was not much good with on the grouping the LNER had the start of the 4-6-2 class and the ROD as well, so as only had fine tune the engine classes.

Yes the LNER had a lot of agricultral area such as the GE outside the suburban area with no major ports as well as on the wrong side of the country.

Also they kept the charges for the freight at Scunthorpe cheap to help to keep them going.

[Bill Bedford]

Also they kept the charges for the freight at Scunthorpe cheap to help to keep them going.

Even so the Steelworks in Scunthorpe used both road and sea transport to ship pig iron to South Wales because it was more economic.

[Bill Bedford]

Their is one part of transport that the LNER was better over the LMS and that was the named trains such as the Silver Jubilee and the Coronation/West Riding sets with the LMS not a mixture of existing and new coaches. Also in the case of the engins the LNER were in a better shape than the LMS with poor MR and not much better LNWR engins .

Maybe but there are doubts that the streamline trains ever turned a profit.

[hq1hitchin]

I thought I had read that The Silver Jubilee paid for its construction costs from the supplements alone. Anyone any knowledge? Can't comment on the other two trains but I'm sure that was the official story. BTW, the Coronation Scot - 1.30 pm ex EN and Glasgow C in both directions - is said to have been given paths so as not to interfere with the running of freight trains on the WCML but these departure times were hardly likely to drag in the crowds, either, arriving too late at each end for useful forward connections. I sometimes wonder if the LMS were really committed to the streamliners.

[stembok]

Maybe, but there are doubts that the streamlined trains ever turned at profit.

I suppose it depends upon what is meant by a profit. The trains themselves were reportedly very profitable. The 'Silver Jubilee' earned gross receipts of some 14/- per mile, with the gross revenue some six times the operating costs and ran with an 86% load factor in its first year. Within two years 1935-37 the train's supplementary travel charges alone had paid for the cost of the rolling stock. Indeed an extra eighth vehicle was later provided for the 'Silver Jubilee' formation. The West Riding was also commercially successful aimed, as it was, at the West Yorkshire woollen business community. The 'Coronation's' loadings were apparently at times slightly disappointing north of Newcastle, but better south of the latter point. So on directly covered costs the trains were a success. Where doubts have been raised they concern the operating problems and dislocation to other services in 'pathing' the streamliners on a vastly different railway to that which exists today, with loose coupled freights, stopping passenger trains etc and lots of them. This must presumably have had cost implications Even so the 'streamliners' were a magnificent advertisement for the LNER, representing the summit of day by day steam locomotive performance and operation in this country.

[hq1hitchin]

Yes indeed, the pinnacle of steam performance in this country and they must also have helped raise the morale of LNER staff. As someone once said to me 'The Coronation sets were hand washed with Lux soap flakes, and they shone like motor cars...'

[PaulG]

Hi TRESTROL

What a difficult question to answer.

There are a number of books which go into the subject in detail (suggested reading is Geoffrey Hughes and Michael Bonavia books on the LNER) and comments have already been made about the problems with trade in the North East.

You must also remember at that time the railway was a common carrier. This was a major issue for the railways which resulted in heavy overhead costs.

In East Anglia the LNER was faced with: Sparse low value seasonal agricultural traffic; high intensity suburban traffic serving London, but from poor areas with low fare structure; lightly laid infrastructure causing restrictings on loadings/motive power - every valley crossing had either a sharp turn or speed restriction so drivers could make full use of the down hill sections; coal had to be carried long distances etc etc. Not the easest or most profitable railway to operate, with numerouse problems after the First World War.

As is well known, the GN, GE and GC were looking to merge long before the Grouping - the GE could offer access to various ports on the East Coast and London Docks, which e.g. the GN little access.

Regards
Paul

[CVR1865]

That is a very interesting point about the GE. It had all the access to the London ports in the east end including the Royal Albert Docks. It has the lucrative trade but it still was so poor it was in receivership in 1867. Were the London ports less profitable than one imagines?

[industrial]

Yes the GE had acess to the docks but I wonder what % trade came in and left by rail as probably a lot of the London trade would have left by road as in the case of when the Machester Ship Canal opened the dock railways were finding a lot of the goods was going local and was using the roads.

The GE never had any heavy freight engins as probably most of the rail traffic went to the various exchange sidings around London with the LMS finger in the pie with the North London Railway, so were unable to make much as the milage tarraf would have been small.