The Committee did not suggest that either of these companies had abused its powers, or taken undue advantage of such "monopoly" as it had secured in the districts concerned. In fact, of the North-Eastern Railway they said:— "That railway, or system of railways, is composed of thirty-seven lines, several of which formerly competed with each other. Before their amalgamation they had, generally speaking, high rates and fares and low dividends. The system is now the most complete monopoly in the United Kingdom ... and it has the lowest fares and the highest dividends of any English railway." As for the Great Eastern, instead of abusing their "almost exclusive possession" of the Eastern Counties, everyone knows that the Company have won for themselves the credit of pioneering the movement for offering exceptionally low rates and other special facilities for the transport of agricultural produce, and, also, of having done more, perhaps, than any other single railway company to enable working men to live in healthy suburbs around London.
The whole position in regard to the prospective abuse of a so-called monopoly due to railway amalgamations is, in fact, much misunderstood.
A railway company which controls, or practically controls, the traffic in a certain section of the country is especially interested in developing that traffic because it will enjoy all the advantages thereof, without having to share them with a rival. For this reason, instead of restricting facilities, such a company seeks to increase them; instead of imposing extortionate fares and rates it aims, not merely at immediate profits on the transport of particular commodities, but at encouraging such a development of the district in general as will ensure its prosperity, increase its population, expand its trade, and create more traffic of all kinds in a not far distant future.
It was precisely this idea that led the Great Eastern Railway Company to set the example it did in seeking to develop the interests of its agricultural districts. The more these interests expanded, and the more profitable the agricultural industry became to the people living in those districts, the greater would be the demand for household supplies, for furniture, for pianos, for building materials, and for countless other commodities, most of which would bring additional traffic to the line apart from the greater amount of agricultural produce carried, and apart, also, from the further inevitable increase in passenger traffic.
Cornwall, again, might be regarded as the "monopoly" of the Great Western Railway; but what person would suggest that the Great Western have not sufficiently boomed "the Cornish Riviera"?
Nor is there necessarily a "monopoly" simply because a particular district is served by a single railway. If the Great Eastern did not take people to East-coast resorts at reasonable rates, or if the Great Western charged excessive fares for the journey to Cornwall, holiday-makers would, in each case, go elsewhere. If either company, or any other company, sought to get too much for carrying milk to London, milk would be obtained by the metropolitan dealers from other districts, instead; and so on with most other commodities.
Indirect competition, on sound economic lines, may, therefore, still exist even when a railway company is, after many amalgamations, in the possession of an apparent monopoly. The law of supply and demand will still regulate both prices and charges. When, on the other hand, an attempt is made to enforce an artificial and non-economic competition by Act of Parliament, the inevitable result is that the companies concerned find it to their advantage to combine, or to agree, rather than to compete in rates and fares under conditions that would not only be mutually disadvantageous, but confer no lasting benefit on the public they seek to serve.
How the ultimate result of railway policy, as here described, has been to bring about the creation of great systems out of small ones may be seen from the following typical examples, showing in each case the number of lesser companies absorbed, leased or worked as the result of amalgamations, of leases in perpetuity, or otherwise; though the figures do not include railways which have been vested in two or more companies jointly:—
| NAME OF COMPANY. | LENGTH OF LINE.[[45]] Miles. | COMPANIES AMALGAMATED OR LINES LEASED. |
| Great Central | 0753 | 15 |
| Great Eastern | 1133 | 26 |
| Great Northern | 0856 | 22 |
| Great Western | 2993 | 1150 |
| Lancashire and Yorkshire | 0589 | 14 |
| London and North-Western | 1966 | 59 |
| London and South-Western | 0964 | 40 |
| London, Brighton and South Coast | 0454 | 19 |
| Midland | 1531 | 35 |
| North-Eastern | 1728 | 41 |
| South-Eastern and Chatham | 0629 | 29 |
| Caledonian | 1074 | 41 |
| North British | 1363 | 45 |
| Great Northern of Ireland | 0560 | 14 |
| Great Southern and Western (Ireland) | 1121 | 19 |
The process of amalgamation has been carried even further than these figures suggest, some of the companies absorbed into the great systems having themselves previously amalgamated a number of still smaller companies. The North-Eastern, for example, came into existence in 1854, through a combination of three companies—the York, Newcastle and Berwick, the Leeds Northern, and the York and North Midland—which three companies then represented between them what had originally been fifteen separate undertakings. Since 1854 the North-Eastern Company have purchased or amalgamated thirty-eight other companies, one of which, the Stockton and Darlington (absorbed in 1863), was already an amalgamation of eleven companies.[[46]]