Table 1 shows the miles in service the construction costs and the
revenues of the railway from 1844 to 1851. As depicted in the table the total length
in 1851 is three times the length in 1844, however the revenue has fallen by
roughly £1,000, which is significant, since the construction costs remained the
same, resulting in a slower return rate and lower profits.
Odlyzko (2012) contributes this setback to the nature of these
investments. Although some of the investments were of high quality and were completed
on time, others were rather speculative and ended in disaster. One of the most
extreme examples of these failures is the case of the East Anglian Railway.
Created from the merger of three railways: Ely & Huntingdon, Lynn & Dereham, and Lynn & Ely railways,
in 1847 (sanctioned by the Parliament in 1845) the East Anglian Railway had
huge promises incorporated into their business plan. The original length of the
railway would have been 87 miles with a construction cost per mile at £8,786
and the revenues per mile at £1,070 (Odlyzko, 2012). These numbers were quite
good compared to the industry, however The Railway Mania collapsed very
quickly. Due to frauds and a general economic turmoil in 1848 only 68 miles
were operational with no ongoing further development, the cost per mile rose to
£18,342, slightly twice the size of the estimate. In 1855 the revenues only
amounted to £687 per mile, which is quite a negative result after a stabilised
economy and ten years of development (Odlyzko, 2012).
Despite these setbacks however, the British railroads still achieved
outstanding numbers regarding financing and investments. In 1870 the railway
capital stock rose to an enormous amount of
£232 million in 1869 prices (Hawke, 1970). Comparing this to the date of the
other means of transportation, around £17 million was invested in canals by
1815 and £10 million was invested in turnpikes by the 1820s. In spite of the
differences in numbers, the characteristics of financing were roughly the same.
Local landowners, merchants, and industrialists contributed the most capital,
but financers from London also played a crucial part, thus creating a mixture
of local and centralised financing (Bogart, 2013).
To further compare turnpikes, canals and railways,
examining the transport costs and travel speeds is also a sufficient tool.