BUS613: Advanced International Business

The railway directors often had important political and social connections and used them to their companies' advantages. Furthermore, landed aristocrats with established connections in London were especially welcome on the corporate boards. The aristocrats saw railway directorships as a socially acceptable form of contact with the world of commerce and industry. They leveraged the business acumen and connections gained through railways to join corporate boardrooms in other industries.

The financial success of the early railways was phenomenal as they had no real competition. The roads were still very slow and in poor condition. Prices of fuel and food fell in cities connected to railways in accordance with the fall in the cost of transport. The layout of lines with gentle gradients and curves, originating from the need to help the relatively weak engines and brakes, was a boon when speeds increased, avoiding for the most part the need to re-survey the course of a line. Less than 20 years after the Liverpool line opened, it was possible to travel from London to Scotland by train in a small fraction of the former time by road. Towards the end of the 19th century, competition became so fierce between companies on the east and west coast routes to Scotland that it led to what the press called the Race to the North. In two summers of the late 19th century, passenger trains belonging to different companies would literally race each other from London to Scotland over the two principal rail trunk routes connecting the English capital city to Scotland. The races were never official and publicly the companies denied that what happened was racing at all. Results were not announced officially and the outcomes have since been hotly debated.

The railways changed British society in numerous and complex ways. Although recent attempts to measure the economic significance of the railways have suggested that their overall contribution to the growth of GDP was more modest than an earlier generation of historians argued, it is nonetheless clear that the railways had a sizable impact in many spheres of economic activity. The building of railways and locomotives, for example, called for large quantities of heavy materials and thus provided significant stimulus to the coal-mining, iron-production, engineering, and construction industries. The railways also helped reduce transaction costs, which in turn lowered the costs of goods. The distribution and sale of perishable goods such as meat, milk, fish, and vegetables was transformed, giving rise not only to cheaper produce in the stores but also to far greater variety in people's diets.

The railways were also a significant force for the changing patterns of human mobility. Rail transport had originally been conceived as a way of moving coal and industrial goods but the railway operators quickly realized the potential for market for railway travel, leading to an extremely rapid expansion in passenger services. The number of railway passengers tripled in just eight years between 1842 and 1850. Traffic volumes roughly doubled in the 1850s and then doubled again in the 1860s. In the words of historian Derek Aldcroft, "In terms of mobility and choice [the railways] added a new dimension to everyday life".