History
From the start, there was intense competition between the Birmingham and Derby Junction Railway and the Midland Counties Railway for traffic into London.
Though this did not directly affect the North Midland, it had financial problems of its own. With so many earthworks it had been extremely expensive to build, and its station and other buildings were arguably extravagant. Moreover, by the time it opened, the country had entered an economic depression. In the first two years, dividends were as low as 3.5%, compared with 10% for the London and Birmingham. Economies were put in place but in 1842 the dividend was a mere 1% and the Lancashire and Yorkshire shareholders called for a Committee of Enquiry.
This included George Hudson, and after a tour of the complete network, he insisted on drastic measures. Against the wishes of the Derby directors, Hudson and the others insisted on halving expenditure. At a meeting in Leeds, the shareholders had their way, moreover six of them, including Hudson, forced their way onto the board. One of their first acts was to close Beighton, Killamarsh and Kilnhurst stations. Boys, instead of men, would work points at junctions, services were reduced and fares raised and a number of carriages were sold.
A quarter of the footplate staff were sacked. The remainder protested and were sacked as well, on Christmas Eve and without pay in lieu of notice. He employed in their place, enginemen he described as "skilled replacements" who included in their number a platelayer, a fireman, a stonemason, two had been sacked for drunkenness and one who had been sacked for overturning a train of wagons.
The result was chaos, with trains running late or erratically, and the remainder of the workforce demoralised. Finally a luggage train, with an elderly driver of only three weeks experience, collided with the rear of a stationary train at Cudworth in fog. The inquest criticised the cutbacks and there was wide publicity about the trial of the driver for manslaughter. The jury acquitted him and censured the directors. Meanwhile the Board of Trade was also extremely critical and the directors made somewhat grudging improvements to working practices.
Meanwhile the situation between the Birmingham & Derby and the Midland Counties was becoming steadily worse. Hudson's first approach was to the Midland Counties in 1843. He then negotiated a secret amalgamation with the Birmingham and Derby which would remove all the Midland Counties' trade and, in August, returned to the latter with an ultimatum. Finally, in September, its shareholders overruled their chairman and the triple merger was agreed.
The Midland Railway Consolidation Bill was placed before Parliament and was passed in 1844 and from May of that year the Midland Railway came into being.
Read more about this topic: North Midland Railway
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