The Surrey Iron Rail-way was also a landmark in railway history because, although in itself of very small extent, it was originally designed to serve as the first section of a railway which, made by different companies, as capital could be raised, would eventually have extended from the Thames to Portsmouth.[[37]] The second section was the Croydon, Merstham and Godstone Iron Railway, which Parliament sanctioned in 1803. From Croydon this further railway was to carry the lines on to Reigate, with a branch from Merstham to Godstone Green, a total distance of sixteen miles in addition, that is, to the nine and a half miles of the Surrey Iron Rail-way. Both companies, however, drifted into financial difficulties, and had to apply to Parliament again, in 1806, for fresh powers, while the lines of the second company never got beyond the chalk quarries at Merstham.

In the absence of the through traffic it had been hoped eventually to secure, the local business alone available was evidently inadequate to meet the charges on a capital outlay which, at that time, may have been regarded as not inconsiderable, inasmuch as the Surrey Iron Rail-way attained to a good elevation at its southern end, while the Croydon, Merstham and Godstone line went through a cutting thirty feet deep, and crossed a valley by an embankment twenty feet high. After a chequered career, the Merstham line was acquired by the Brighton Railway Company in 1838 and closed, being then no longer required. The Surrey line lingered on till 1846, when, with the sanction of Parliament, its operation was discontinued, the rails being taken up and sold by auction.

It was unfortunate that these two pioneer public railways were a failure because, had they succeeded, and had they really formed the first sections of a through line of communication between the Thames and Portsmouth, there would have been established a further precedent—and one of much greater value than that of a common user—the precedent, namely, of a trunk line made by companies co-operating with one another to give continuous communication on a well-organised system, in place of collections of disconnected lines designed, at the outset, to serve the interests only of particular localities, with little or no attempt at co-ordination.

Yet the principle of a general public railway had, at least, been established by the Surrey and Merstham lines, and this principle underwent further important development by the Stockton and Darlington Railway, the first Act for which was obtained in 1821.

The only purpose originally intended to be served by the Stockton and Darlington Railway was the finding of a better outlet for coal from the South Durham coalfield. A company, with Edward Pease as the moving spirit, was formed in 1816, but two years later the projectors were still undecided whether to make a canal or "a rail or tramway." George Overton, who preceded George Stephenson as a distinguished railway engineer, wrote to them, however, advising the latter course. "Railways," he said, "are now generally adopted, and the cutting of canals nearly discontinued"; and he told them, further, that within the last fifteen years the great improvements made in the construction of tram-roads had led to the application of the principle to a number of new roads. His advice was adopted, and the first Act, obtained after several unsuccessful efforts, authorised the making and maintaining of "a railway or tramroad" from the river Tees, at Stockton, to Witton Park Colliery, with various branches therefrom. The line would, the Act said, be "of great public utility by facilitating the conveyance of coal, iron, lime, corn and other commodities from the interior of the county of Durham to the town of Darlington and the town and port of Stockton," etc.

It was first intended to use wooden rails, and to rely on horse-power, no authority for the employment of locomotives being obtained under the Act of 1821; but George Stephenson, on being appointed engineer to the line, persuaded the company to adopt iron rails in preference to wooden ones, and to provide a locomotive such as he had already constructed and successfully employed at Killingworth Colliery. Two-thirds of the rails laid were of malleable iron and one-third of cast iron. It was not, however, until September, 1824, that the order was actually given for a locomotive, some of the promoters having still shown a strong preference for the use of stationary engines and ropes.

The line was opened for traffic on September 27, 1825, and the locomotive which had been ordered—the "Locomotion" as it was called—was ready for the occasion. It weighed seven tons, and had perpendicular cylinders and a boiler provided with only a single flue, or tube, 10 inches in diameter and 10 feet in length, the heat being abstracted therefrom so imperfectly that when the locomotive was working the chimney soon became red-hot.[[38]] The usual speed was from four to six miles an hour, with a highest possible of eight miles an hour on the level.

The company made provision for the anticipated goods traffic by having 150 waggons built; but they started with no idea of themselves undertaking passenger traffic. Their first Act had laid down that "Any person is at liberty to use and run a carriage on the railway, provided he complies with the bye-laws of the company"; and J. S. Jeans, in his history of the Stockton and Darlington Railway published (1875) under the title of "Jubilee Memorial of the Railway System," says: "It was originally intended to allow the proprietors of stage-coaches or other conveyances plying on the route of the proposed new railway to make use of the line on certain specified conditions." This, too, is what actually happened; for although, a fortnight after the opening of the line, the railway company themselves put on the line a springless "coach," known as the "Experiment," and drawn by a horse, several coach proprietors in the district availed themselves of their statutory right to run their own coaches on the railway, first, of course, providing them with wheels adapted to the rails. They paid the railway company the stipulated tolls, and had the advantage of requiring to use no more than a single horse for each coach. These horse coaches for passengers seem to have run in the intervals when the lines were not occupied by the locomotive engaged in drawing the coal waggons.

In a letter published in the "Railway Herald" of April 27, 1889, John Wesley Hackworth, whose father, Timothy Hackworth, was for some time engineer on the Stockton and Darlington Railway, says that twenty miles of the line were at first worked by horses and locomotive in competition, and at the end of eighteen months it was found that horse traction was costing only a little over one-third of the traction by locomotive. Meanwhile, also, the value of the £100 shares had fallen to £50. In view of these results the directors had decided to abandon locomotive power, and depend entirely on horses; but Timothy Hackworth said to them, "If you will allow me to construct an engine in my own way I will engage it shall work cheaper than animal power." He received the desired authority, and the "Royal George," built by him, was put into operation in September, 1827. It confirmed the assurance which had been given, and, says Timothy Hackworth's son, "finally and for ever" settled the question of the respective merits of horse and steam traction on railways.

Horse coaches still continued to run on the lines, however, in addition to the mineral and goods trains, and in January, 1830, the company had to draw up a time-table fixing the hours of departure for the coaches, thus ensuring a better service for the public, and, also, protecting travellers against any possible encounter with the locomotive as the horse ambled along with them on the railway.