Strategy, solvency and the state : the development of the railway system of northern Scotland, 1844-74

Abstract

This thesis investigates the factors that stimulated and sustained the development of a railway system in northern Scotland in 1844-74 and draws contrasts with earlier railway development in Scotland and England. No continuous railway routes ran north of the Glasgow-Aberdeen axis in 1844, but, by 187 4, a railway system extended to the far north of the highlands despite the absence of substantial population or raw material sources. The state, strongly influenced by the ideology of free market capitalism, was reluctant to become involved in the planning or management of railways in Britain with the result that the railway system evolved in an unplanned way, promoted and managed by private enterprise and financed increasingly from a national capital market. This thesis contends that railway development in northern Scotland does not reflect this pattern. It questions whether the state perpetuated its detached stance towards railway development in northern Scotland, to what extent this northern railway system was planned, and how these relatively small railway companies were able to obtain sufficient capital and avoid insolvency given the unpromising economic conditions of the region. The thesis examines a coherent plan devised and authorised by the state that set out the framework of a Scottish railway network. It demonstrates that the remote northern railway system was founded upon the cogent strategic planning of regional interests based in Aberdeen and Inverness. It illustrates the substantial economies achieved in the costs of establishing northern railways compared to earlier railway development to the south, and the significance of local investment within them, increasingly made for the future indirect returns anticipated from national trade and improved land values. The critical importance of temporary credit in the financing of northern railways is highlighted and, in particular, the major role played by the banking sector