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To assess the effect of the railways on economic growth in Britain during the 19th century it is perhaps appropriate to first consider the growth of the small north eastern town from where the Stockton and Darlington Railway made its maiden journey.
Shildon is a small town in the County of Durham, which, in 1988, had a population of some 14000 people.  It is a township and district council formed in 1837  and expanded in 1937  when its population was estimated at 14550.
In 1800 Shildon was an isolated hamlet with a population of 100 persons. It had 25 habitations with one inn, the Grey Horse owned by one Daniel Adamson.  Its industries were mining, agriculture and the weaving of Tammies and cotton.  Apart from the local coal, large quantities were bought through the village on packhorses to avoid tolls. The cost of this transportation, 2/6d (12.5p) per ton/mile,  increased the price of coal and the method precluded the economic shipping of product. 
The difficulty and cost of transporting coal caused concern to local industrialists and mine owners. The use of metal tramways with horse drawn trucks, which had been developed in Tyneside in 1794, had been considered but the distances to the port of Stockton precluded the use of this method. Had the method been viable the cost of transportation would have been reduced to 3¾d (1.5p) per ton/mile. Canals had also been considered by the Pearce and Dixon families, but the terrain was unsuitable. 
In 1814  Edward Pearce (1767-1857) and George Stephenson (1781-1848) met to discuss and plan a railway in preference to the canal. There was strong opposition to the project but finally in 1821 a Railway Bill received royal assent. The Bill made no mention of either steam power or passengers, as the only consideration was the economic transportation of coal to the ports. A second Bill, in 1823, authorised the use of locomotives and the carrying of passengers.  The construction of the Stockton and Darlington Railway had begun in 1822  with Stephenson as surveyor and engineer. It was likely that Stephenson's influence arranged for the inclusion of locomotive power in the second railway Bill due to his interest in this from 1814, when he built his first locomotive for the Killingworth Colliery.  Due to Stephenson's other business interests, such as the Liverpool and Manchester line,  he was absent from the development a great deal, and a new engineer and superintendent, Timothy Hackworth, was appointed in May 1825. 
Hackworth (1786-1850) was born at Wylam-on-Tyne and was apprenticed as smith at the local colliery. On completion of his apprenticeship he was appointed smith foreman of the colliery. During his time at Wylam he proved that plain wheels on a plain track would provide sufficient traction to propel loads (1811), developed the 'Grasshopper' locomotive (1812) and the boggie (1813). 
It is well documented that the Stockton and Darlington Railway made its maiden journey, pulled by the locomotive Locomotion One, on Tuesday, 27 September 1825. What is not so well documented is that the powered journey started from the Masons Arms in Shildon, and that the journey set a precedent for all future railway operations; the late arrival at its destination due to a wagon having axel failure and the engine developing a fault.  The total delay was 55 minutes, which doubled the overall journey time to Darlington. 
So, what was the effect on Shildon? As stated above the population in 1800 was 100 persons; by 1821 this had increased to only 105, an average annual population growth of only 0.24 persons. By 1831, 6 years after the maiden journey, the population was 867 (76.2 persons/ year).  We know that the number of pubs in the area (a good indication of economic health perhaps) had at least doubled; the Grey Horse was still in operation together with the Masons Arms.
Daniel Adamson had diversified into the transportation business and was a private contractor to the Stockton & Darlington Railway, carrying passengers in his horse drawn coach 'Perseverance'. He built a coach house opposite the Grey Horse, which is reputed to be the first purpose built railway building. By 1832, the coach made 12 journeys per week to Darlington with an average of 6 passengers per journey.  By 1833 the only room in the Masons Arms had been taken over by the railway company to be used as a railway station booking office and director's committee room and a waiting room was built on the other side of the railway. The station at the Grey Horse was converted to a goods station. 
Also at this time a third pub, The Globe, was used for a meeting of several leading members of local society, including Hackworth, to consider ways to cater for the intellectual and moral needs of the population in the area. Another pub in operation at the time was the Black Bull; in 8 years the number of pubs in the area had grown to at least 421, meteoric growth indeed.
With the growing population in Shildon (by 1841 it was 2631 persons) the need for a church was identified, and the foundation for this was laid in 1833 and the church completed in 1834. 
The first workshops for the Shildon Engine Works were built in 1825 and employed some 20 people. By 1827, when Hackworth was building the Royal George there the number employed had risen to 50. In 1832 Hackworth built his own works at Soho Shildon and, eight years later he resigned from the Stockton & Darlington Railway to concentrate on his building and development work at the Soho works, where he built the first locomotive to be used in Russia. 
News of the employment opportunities in the area spread and men, with their families, moved into the area seeking employment. These people needed accommodation and a haphazard town, with street names such as Railway Terrace, Mechanic Street and Station Street, began to grow up around the works. This area became known as New Shildon. 
In 1839 work was started on the Shildon tunnel to provide a new route to Darlington. The tunnel was opened on 10 April 1842, and cost £100 000 to build. It used some 7,000,000 bricks from the local brickworks; built to supply bricks for the major building programmes in the area. Stone from the Old Shildon quarry was used for the tunnel walls and for houses in both Shildons. The opening of the tunnel caused a new station to be built; the last and existing station at Shildon. The redundant New Masons station became a reading room and library. A caretaker was employed, Mr. Hamilton, with an annual salary of £825
New Shildon continued expanding; in 1841 a gas works was built to supply the railway company and the Soho works. In all 29 coalmines were opened in the period 1825 to 1900; one of these, known as the Dabble Duck because of its extremely wet conditions, is now the site of an industrial estate. 
The growth in the area was not restricted to New Shildon. By 1857 Old Shildon (the original village) had also expanded. Apart from the quarry mentioned above, it had a Police Station and a Post Office together with the Downing's Brass and Iron Foundry. Various tradesmen flourished in the area; Mr. Smith, the local tailor, for instance, supplied uniforms for the railway company. As for our earlier economic indicator, Old Shildon at this time boasted eight public houses. 
can see from the above that the effect of the railway in Shildon was extensive.
Figure 1 is a graph showing the population growth for the town.
A computer generated trend line, showing an exponential growth, has been
Similarly, Figure 2 shows the known number of pubs in the area, with a similar trend line. The number of pubs has been used as a rough economic indicator because pubs tend not be opened, or stay open, if there is insufficient wealth in the area to sustain them. Also, it seems to be the one statistic that the locals constantly record.
It is difficult to say what affect the railway had on coal mining in the area. Certainly in the period 1800 to 1824 only four pits were opened, while, as has been stated above, some 29 were opened during the remainder of the century. There are no pits in Shildon now; it may be possible that the railway, because of the ease with which the coal could be transported to the sea for shipping, accelerated their closure.
It has been shown above that the railways had a major economic effect on one small village in the north east of England throughout the 19th century. Can this microcosmic analysis be applied to Britain in general?
An almost immediate effect of this revolutionary transportation method on the world outside of the Shildon community was to reduce the cost of coal. Before the railways, the cost of coal at the Stockton and Yarm yards was 18s per ton (£0.90). With the coming of the railways this reduced initially to 12s per ton and eventually to 8/6 per ton.  This reduced cost of coal made it more accessible to more people, which fuelled the expansion of the mines. Output of coal in 1830 was 16,000,000 tons. By 1850 this had trebled to 49,000,00029, and by 1880 to 147,000,000. 
Part of the reason for this increased coal demand would have been the need for the iron and steel industries to fuel their processes. The railways themselves were instrumental in the increased demand for iron and steel, such as the iron required for rails and other hardware.  The age of the railway effectively created the steel industry. In 1850 steel output was 49000 tons. Developments such as the Bessemer Converter (1850) and the open-hearth process (1860) enabled the development of the industry to the extent that in 1880 output was 1,440,000 tons. 
As shown above the railways facilitated the growth of the coal and iron/steel
industries. The railways themselves had also developed from being 'a means to
an end' into an industry in itself. The growth of the industry was due not only
to the need for cheep and rapid bulk transport, but was also due to the need
for people to use their accumulated wealth to generate profits from investments.
 Between 1830 and 1850 something like 6000 miles
of railway were opened in Britain due to investments made in the periods of
'railway mania' of 1835-7 and 1845-7. In some cases the investment was justified,
such as Shildon and the need to cheaply transport coal from an isolated area.
Table 1 shows the increasing return on investment for stockholders in the Stockton
and Darlington Railway.
|Percentage Return On Investment
The Liverpool and Manchester line (1830) had little problem in paying dividends of 10%. Both companies provided solutions to problems of industry in their areas. Unfortunately, this was not always the case and, by 1850, only a small portion of the £240 millions invested in railways was done so intelligently. 
It was stated above that Hackworth produced the first locomotive to be used in Russia, but the growth of other industries affected by the railway enabled Britain to export other produce. Between 1840-60 exports grew at a greater rate than in any other period, particularly between 1845-55 when they grew at 7.3% per year. Table 2 shows the growth in capital goods export. 
|Percentage Of Goods Exported
The value of coal and iron/steel exports also grew, as shown in Table 3. 
|Value of Coal Export
|Value of Iron/Steel Export
It has been stated however that the railways did not in themselves cause the growth; they merely supported the more important industries. Analysis has been attempted to support this view by trying to calculate the additional costs of roads and canals had the railways not existed. This is known as 'counter-factual analysis'. G. Hawke concluded from his analysis that the railways only achieved a saving of 7% to 11%.  This may have been correct, but in no case does anybody contradict the importance of the railways' contribution to Britain's economic growth.
The importance of this role in isolated areas such as Shildon is obvious. The analysis in the first section of this essay suggests that without the railway it is unlikely that Shildon would exist in its present form. On the wider scale however it would appear that while the railways did make important contributions to growth, they were not the cause, they were more the phenomenon that facilitated the growth of existing industries and the industrial revolution.
Hutchinson, F., Daniel Adamson of Shildon 1778-1832, Private Publication, 1984.
Brett,J., A History of Shildon, Private Publication, 1989.
Young,R., Timothy Hackworth and the Locomotive, Shildon's 'Stockton & Darlington Railway' Jubilee Committee, 1975
Spedding,R., Shildon Wagon Works: a working man's life, Durham County Council, 1988.
Shildon Women's Institute, Shildon: Our Village, Private Publication, Date Unknown.
(All of the above are available on loan from the Shildon Library.)
Hobsbawm, E.J., Industry and Empire, Penguin Books, 1990.
Murphy,D. (ed), Britain 1815-1918, Collins Educational, 1999.
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