London, Chatham and Dover Railway

East Kent Railway

The LCDR originated through the dissatisfaction felt by the inhabitants and businesses of towns in north and east Kent with the services provided by the SER, resulting in the formation of the East Kent Railway (EKR). Permission to build a new line from Strood near Rochester to Faversham was granted by Parliament in 1853, but the SER successfully fought off an attempt by the new company to secure running powers over its metals. In return the SER agreed not to oppose any future application for an extension of the line to Dover, which was granted in 1855.

It took the EKR several years to raise the necessary finance and it was not until 25 January 1858 when the first section of the line from Chatham to Faversham was opened, with stations at Rainham, Sittingbourne, Teynham, and Faversham. On 29 March 1858 a second section from Strood to Chatham. Around July 1858 a station opened at New Brompton (renamed New Brompton (Gillingham) in May 1886 and Gillingham from 1 October 1912). Rochester station opened after the rival SER opened Chatham Central station.

On 3 March 1858 the West End of London and Crystal Palace Railway (WELCPR) opened the extension of their line from Norwood (Crystal Palace) to Beckenham Junction (opened as Beckenham) and Shortlands (opened as Bromley).

On 22 November 1858 the Mid-Kent Railway constructed a line from New Beckenham to Beckenham Junction station and obtained running rights over the WELCPR to Bromley (Shortlands). From there the Crays Company was building a line on to Bromley South (opened as Bromley Common) and Bickley (opened as Southborough Road). The Mid Kent line connected with the WELCPR that later provided the necessary access to London. After absorbing the Crays Company and gaining running rights over the Mid Kent metals to Beckenham Junction, the LCDR was to later buy the track between Beckenham Junction, Birkbeck and Bromley Junction, while the LBSCR absorbed the rest of the WELCPR.

In 1859 the EKR changed its name to the LCDR though Dover had not then been reached, coinciding with the Western Extension via Longfield to join the Crays Company metals at Southborough Road (now Bickley)..

London, Chatham and Dover Railway

Second London line

On 1 June 1864 the railway reached the City of London, when the line from Herne Hill to Blackfriars Bridge station (south of the river), was extended from Elephant & Castle. The next year the LCDR crossed the Thames on a bridge and on 1 June 1865 Ludgate Hill station opened (closed 3 March 1929). The line continued north under Snow Hill and a junction was made with the Metropolitan Railway. On 1 January 1866, LCDR and Great Northern Railways (GNR) joint services from Blackfriars Bridge began operating via Snow Hill tunnel under Smithfield market to Farringdon and northwards on to the GNR.

In 1874 a terminus opened at Holborn Viaduct. In 1886, St. Paul's station (later renamed Blackfriars) was opened by the London, Chatham and Dover Railway, reached by a parallel bridge across the river. Blackfriars Bridge station closed at this time.

Stations on the City Branch were

Later openings

Authorised from the future site of Nunhead on 28 July 1863; Nunhead opened 1 September 1871; Greenwich Park branch opened from Nunhead to Blackheath Hill on 18 September 1871; opened through to Greenwich Park on 1 October 1888.

Stations on the Greenwich Branch were

Background

Parliament had established standard clauses that were included in the authorising Acts of Parliament for all railway companies that specifically limited the borrowing powers of the company to one-third of its authorised share capital to ensure there was a proper balance between share capital and loans. These standard clauses also required that before any loans could be taken, all of the share capital must have been subscribed for, at least 50% paid for and the payment proved to the satisfaction of a justice of the peace.

The railway construction partnership Peto and Betts had done a lot of work already for the LCDR, some of it via a close but separate partnership between Sir Morton Peto, Edward Betts, and Thomas Russell Crampton, the engineer for the LCDR. This new partnership, Peto, Betts and Crampton, in conjunction with the original partnership, Peto and Betts, agreed to build a line between London Bridge and Victoria for the LCDR and to be paid entirely in the company's shares and debentures.

Immediate cause of the insolvency

From its inception, the LCDR was known to be under capitalized. With the collapse of the bank Overend, Gurney and Company in May 1866, it became apparent that the LCDR had been funding its construction by operating a series of schemes to evade the loan restriction requirements and borrow money that was not secured in the way the law required.

Shares had been issued in the names of Peto, Betts, Crampton and their acquaintances, and the LCDR accounts written up to make it look as though either the associated cash payment had been made directly to Peto and Betts to fund the construction of the line, or the money, having been paid to the railway company, had temporarily been lent back to the new shareholders. In fact, no cash had changed hands at all, but on the strength of these fictitious entries, the statutory declaration was made before a justice of the peace and authority given to raise loans.

Once these major irregularities were exposed, the financial markets refused to continue lending to the LCDR and it became insolvent.

Samuel Morton Peto

In December 1863 Samuel Morton Peto, a partner in Peto and Betts, had joined the board of the LCDR as financial advisor. With the collapse of the company the accusation was made that Peto was party to the scheme to circumvent the loan restrictions.

At the time of the LCDR insolvency Peto was the Liberal Member of Parliament for Bristol, and on 22 October 1866 addressed a meeting in Bristol to explain his involvement with the LCDR. Although reports of the meeting are very complimentary and sympathetic to Peto, further contemporary analysis was less so.

At the Bristol meeting, Peto was quite open with his admission that his business, Peto and Betts, was party to a scheme where they would give the LCDR a receipt for money paid to them as contractors, and the LCDR gave Peto and Betts a counter-receipt for money paid “for deposit, and in anticipation of calls.” It was made to appear that share capital had been paid which had not been paid. On the strength of these fictitious receipts, again, the statutory declaration was made before a justice of the peace and authority given to raise loans.

However, Peto did not consider himself in any way to be at any fault. In his view, as it was the LCDR company solicitors that had suggested this course of action, and had drawn up the fraudulent statutory declaration and the loan documentation papers, he did not think that he should shoulder any of the blame. When they heard how Peto had implicated them, the company solicitors retorted that they had never done anything of the kind, and that they regarded any attempt to borrow money, except on the basis of “a bona fide subscription and a bona fide payment of half the capital,” as “utterly indefensible.”

Peto’s attitudes were not unique. One of his supporters (and himself a railway director and deputy chairman) made a statement to the meeting to the effect that railway boards of directors cannot afford to be too nice, “It is very difficult to make a railway out of nothing … Parliamentary requirements almost necessitate the doing of things which are not strictly right and proper.”

Financial market reaction

Financial commentators were scandalised. Typical of the comments published were:

Of course, we may expect to hear more about this part of the question; but even supposing Sir Morton Peto's apology to be true in point of fact, what a pitiful apology it is! He, an experienced man of business, and the regular financial adviser to the company, disclaims all responsibility for unjustifiable financial actions, if only the company's solicitors tell hint that it is all right. Surely it is not a legal question, but a moral question, whether it is permissible to concoct fictitious documents for the purpose of evading the provisions of an Act of Parliament.

Whom shall we in future trust? Here is Sir Morton Peto, saying expressly, ‘These debentures are not debentures; I do not know what they are, but debentures they are not. I got money on them, it is true, but they are not worth anything. They are only quasi things, and the good debentures are elsewhere.’ We have never seen the whole basis of railway credit so rudely shaken. We could not have believed that such a defence could have been offered. How is Lombard-street ever to rely on having good debentures, when it finds men of the greatest repute and the highest standing offering it documents so very like debentures, but after all not real? ... Of course the company was primarily responsible; but Sir Morton Peto was acting as their trusted financial agent, ... and therefore he must be held responsible, not of course exclusively, but conjointly with those with whom he acted."

Aftermath

The LCDR was refinanced. The original shareholders lost their investment and the board of directors and company solicitors replaced. The new board resolved to pursue Peto, Betts and Crampton and made a "staggering" claim against them personally for £6,661,941 19s 1d. (equivalent to £556,590,000 as of 2015).

Peto, Betts and Crampton admitted to owing the LCDR £365,000 and eventually the railway acquiesced to this figure. The railway’s new solicitors declared, “Whether my clients had a proof upon the proceedings for £360,000 or for £6,600,000, the result would, unfortunately be the same – in neither case would there be any dividend." The Pall Mall Gazette commented, “… the chase was costly and the game worthless.”

The personal reputations of Peto and Betts were destroyed and never recovered. Although also made personally bankrupt, Crampton came out of the episode with his reputation intact and continued in business.

Formation of the South Eastern & Chatham Railway

On 1 January 1899 the South Eastern and Chatham Railways Joint Management Committee was formed to oversee joint working. On 5 August 1899 the South Eastern and London, Chatham and Dover Railway Companies Act was passed, which resulted in the formation of the South Eastern and Chatham Railway (SE&CR). This was not a true merger since each company kept its individual board of directors within the organisation.

The rolling stock and steamboats of the two companies were thereafter worked as one concern. Some rationalisation of competing stations occurred but it was not fully resolved. Between 1902 and 1904, connections were built to allow LCDR trains through running on ex-SER lines, notably in the Bickley area where the two main lines crossed. The rationalisation of the lines in Thanet to create a line which ran through from Margate via Ramsgate to Minster did not take place until after the grouping. In 1936 the former tunnel to Ramsgate Harbour became part of the Tunnel Railway underground railway system linking Ramsgate beach to Hereson Road, near Dumpton Park mainline station.

In 1923 the LCDR and the South Eastern Railway (SER), the London, Brighton and South Coast Railway (LBSCR), and the London and South Western Railway (LSWR) were joined to form the Southern Railway.

Line details

Rolling stock

Both the South Eastern and London, Chatham and Dover Railway companies' locomotives were painted black each with their own style of lining but, when taken over by the South Eastern and Chatham Railways Managing Committee (SE&CR), dark green was adopted with an elaborate lining scheme. After some trials with a hybrid colour scheme (SER maroon on the upper parts and LC&DR teak on the lower), the SE&CR adopted the dark maroon/lake livery for passenger stock. Ex-LC&DR locomotives were renumbered by adding 459 to the running numbers (i.e. locomotive No 1 became No 460, etc.); SER locomotives retained their existing numbers.

For a small and indigent company the Chatham was lucky in its locomotive engineers. After a very patchy start, with a miscellany of Cramptons and other oddities, it had two very competent engineers.

William Martley was appointed in 1860, and commissioned some very effective performers, notably the 0-4-2 well tanks of the 'Scotchmen' (1866) and 'Large Scotchmen' (1873) classes for the suburban services; and the 'Europa' class (1873) of 2-4-0s, which ran the mail trains to and from Dover, the Chatham's crack service.

William Kirtley came from the Midland Railway in 1874, following the death of Martley. He was the nephew of Matthew Kirtley, the Midland's famous locomotive superintendent. Kirtley produced a series of excellent designs, robust and good performers — the A series of 0-4-4 tanks for suburban services, the B series of 0-6-0 goods engines; the T class of shunting engines; the M series of 4-4-0 express passenger engines; and a final R series of enlarged 0-4-4 tanks.

These rather than Stirling's Ashford products formed the basis for SE&CR development under Wainwright, not least because it was Robert Surtees from Longhedge who led design work for the successor organisation. The R series led to the SE&CR's R1 and subsequent H class; the Bs to the famous C class; and the Ms to the D and E classes, which in their rebuilt Maunsell form may have been the best British inside-cylinder 4-4-0s.

Ships

The London, Chatham and Dover Railway operated a number of steamships from 1864, when they took over Jenkins & Churchward's fleet.