Originally published in The Leisure Hour (Religious Tract Society) vol.1 #9 (26 Feb 1852).
One of the most wonderful out-growths of the railway system of our country is the establishment thus designated. It arose out of the necessity, so strongly felt a few years since, for cultivating a certain measure of unity and harmony of operation between the different railway companies, for the sake of the convenience and comfort of their increasing passengers. Every great change, of whatsoever kind, by the sudden disturbance of hereditary habits and customs which it causes, is at first almost invariably accompanied by incidental evils. It was so in the early stages of that mighty locomotive revolution of which we are witnesses. Perhaps no other device has contributed more towards the removal of the evils and annoyances thus superinduced, than the railway "clearing-house," which is supported conjointly by all the leading railway directories of the kingdom. Conceiving that its origin, constitution, and operations may not be known to the majority of our readers, we subjoin the following description of it, taken from Mr. Francis's recent and admirable work on the "History of English Railways."
The banking clearing-house in Lombard-street has been established about three-quarters of a century, and its aids and uses are well known in that great metropolis to whose purposes it ministers. The railway clearing-house, constituted to a certain extent on the same principle, was commenced in 1842. In the early annals of railroads a new difficulty had arisen, and the completion of the line from London to Liverpool proved to the railway manager that the facilitation of the through passage, at the points where the three railways joined, would be necessary.
It was found desirable that the passenger who wished to pass between the above places should not be annoyed by changing his carriage, and watching his luggage; and that the goods of the merchant should not be shifted from one vehicle to another with loss of time and risk of damage. It was a difficulty which had arisen with the increase of railways; and the public, ever ready to find fault, used all its energy to procure an amelioration. Those who scarcely had any other mode of travelling, declared they would rather patronize the old coaching system than be thus inconvenienced. Others dilated on the possible nuisance in eloquent epistles to directors; but all had one peroration, composed of the "supineness of railways," the "evils of the system," and the "results of monopoly." It was the old cry in a new form. But it produced its effect, and an attempt to remedy the evil was made, which, like many first attempts in the shape of reform, met with much difficulty. It is true the directors of some lines acknowledged the wisdom of the proposition, and endeavoured to make it subservient to their interests; but the same lamentable want of justice, which has been so evident in every portion of this history, followed one company in its dealings with another.
That there were various modes of keeping accounts, which involved mutual difficulties in making them agree, was natural enough; that this difficulty should create great confusion, was also to be expected; natural enough, too, was it that officials grew very angry, and that disputes arose in the settlement of accounts; but what shall be said to the most shameful fact, and what excuse shall be made for those unprincipled persons, who, entering into an agreement to render accurate returns, and pay a fixed rate for the use they made of each other's vehicles, should, in violation of faith, and utter disregard of right, make an unacknowledged use of the wagons of other lines, to an extent which was a positive grievance, and with an absence of justice which was a positive infamy? It is the writer's painful duty to affirm that a wrong like this was disgraceful to those who committed it, and disreputable to those who connived at it. The simple rule of right is the best mode of governing, and no paltry expedients can ever fail of recoiling alike on those who plan and on those who profit by them.
Connected with the London and Birmingham railway as auditor, was one who, greatly interested in the welfare of railways, came, after much consideration, to the conclusion, that a central office, carried out on the plan of the banking clearing-house, but modified to meet the requirements of railways, would at once furnish a remedy. And fortunate was it for this idea that, at the head of the London and Birmingham railway, was a man not likely to pooh-pooh it, because it was the proposal of another; but who with characteristic clearness saw its advantages, adopted and aided it, gave the great weight of his name and sanction to it, and who, if he did not originate, at least assisted the infancy of that fine system, which suggested by Mr. Morison, has, under his watchful guidance, attained almost a perfect form; which, commencing with four clerks, now employs two hundred; which then employed by four railways, is now employed by fifty-three, and which embracing then a territory of 418 miles, has increased it in nine years to 4596 miles.
On the 2nd of January, 1842, from London to Darlington, and from Manchester to Hull, was the operation of the system begun; on that day the railway clearing-house commenced its career, and from that day it has increased more and more in importance; it has augmented more and more the comfort and the contentment of the public, while it has not diminished the dividend of the proprietor.
The main principles of the system so widely diffused, are, that passengers, by paying one fare, may go to any place, or any distance, without changing their carriage; that horses and cattle shall be similarly treated, and that goods shall be carried through without being shifted or re-assorted. Each company pays a fixed rate per mile for those vehicles which it uses, not being its own property, and no direct settlement takes place between any company when the accounts are passed through the railway clearing-house.
To enter the building with its various offices; to see the number of books and papers which constitute its contents; to note the many officials occupied in arranging them; to glance at the curious, and, to an unpractised eye, extraordinary documents, which appear to litter its desks, is, even to one not wholly unacquainted with great accounts, somewhat bewildering.
But to enter into the detail, to watch the working of the office, and to see how simply and beautifully the plan adopted bears on each peculiarity, how the accounts are simplified, frauds prevented, and error detected, is exceedingly interesting. Every ticket which the companies issue is sent to the clearinghouse, examined, and returned to the railway which issued it; the number of tickets thus sorted being about 12,000 weekly. The returns received from the 1300 stations are placed in the hands of juniors to arrange and classify, in order to save the more valuable time of the senior clerks, who, to economize labour, have adopted every plan, hieroglyphical and tabular, that experience can suggest.
The office is divided into the goods, mileage coaching, and accountants' departments; these again are subdivided into sections, and where the number employed exceeds twenty, every section has a chief clerk and accountant; where it is practicable, two of these gentlemen work together, each being responsible for those errors which all experienced men know must creep into large accounts; while, to procure a thorough mastery over their business, they are kept in the same department, and occupied with the same work, each, be it remembered, being first educated in the mysteries of railway geography. The accounts between the clearing-house and the companies ave settled monthly, and monthly, therefore, are 16,500 gigantic sheets of paper, covered with financial statements worthy a chancellor of the exchequer, prepared for the various railways. As it is necessary, however, to send triplicates, it follows that 49,500 of the sheets monthly, or 594,000 yearly, leave the clearing-house, bearing on them those results which, arrived at with much labour, are necessary for the arrangements of the relative accounts, and connected with which is the fact, that they are copied at home during the leisure hours of the gentlemen employed in the clearing-house, and paid for independently of their yearly income.
From each of the stations the London office receives daily:—
1. A return of passengers booked through.
2. A return of horses, private carriages, and cattle, booked through.
3. A return of parcels booked through.
4. A return of carriages, wagons, etc., which have arrived, or been despatched, either loaded or empty.
These returns are analyzed, examined, and compared; other returns are prepared in the clearing-house, exhibiting that portion of the receipts of the through traffic to which each company is entitled, with the liabilities it has incurred by using the vehicles of other companies. In the monthly settlement it acts on the system of differences—a system which has been recognised by the banking clearing-house for three-quarters of a century, which is now acted upon by the Bank of England in arranging its half-yearly balances, and which is acknowledged as the proper principle of business throughout the mercantile world. Thus the balances of one company with another amount to hundreds, while the business itself amounts to thousands: 2,600,000l. is the annual amount of business: 400,000l. only is the sum annually paid. The committee of the railway clearing-house is composed of the chairman of all the railway companies included in its arrangements, Mr. Glyn being chairman of the entire body. Among them is divided, according to the business of each, the expense of carrying out the plan. In the six months ending 31st of December, 1850, the amount balanced was 1,320,000l., and the expense of management only 8700l.
An act of parliament has been passed to enable them to act with more security; an office has been erected suitable to their requirements, and as the advantages which follow in the wake of this system are already numerous, so must they indefinitely increase.