PRR vs. London Midland & Scottish

Discussion relating to the PRR, up to 1968. Visit the PRR Technical & Historical Society for more information.

PRR vs. London Midland & Scottish

Postby Tadman » Wed Jun 21, 2017 10:50 am

I have heard the PRR was the largest company in the world during its heyday. I have also heard that British railroad London Midland and Scottish (LMS) was the largest transport company, largest company, and largest joint stock company etc...

Any idea who is right?

I have to believe the PRR was bigger given the service area as well as extensive subsidiaries, railroad and otherwise.
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Re: PRR vs. London Midland & Scottish

Postby kilroy » Wed Jun 21, 2017 1:24 pm

How are you measuring largest? Number of employees? Value of assets? Market capitalization?

Depending on how you measure, both might be able to claim being the biggest.
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Thu Jun 22, 2017 1:39 am

What Kilroy said.
For a first stab at a comparison, I looked up the LMS on … Wikipedia. No numbers for employment or for financial comparison(*), but did find route miles and number of locomotives.
PRR had just a bit under 10,000 route miles. LMS between 7,000 and 8,000.
For locomotives, there is a separate W~a article on locomotives of the LM&S. Just before nationalization, in 1946, the LMS had something like 8,000 steam locomotives (plus a very small number of diesel switchers and electrics). The PRR had peaked in the 1920s with over 7,000 locomotives, but was down to under 5,000 by the late 1940s. … Obviously pretty crude comparison. At a guess, the LMS's locomotives were, on average, much smaller and less powerful than the PRR's: I suspect ("suspect": it's a guess, and I'm not sure!) PRR's fleet produced more ton-miles of freight transportation, but, since any steam locomotive needs an engine driver (engineer in American) and fireman, LMS's larger locomotive fleet suggests ("suggests": disclaimers as before) that it might have needed more employees in operations.

(*) And, of course, financial comparisons between countries with very different economies are problematic….
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Thu Jun 22, 2017 2:20 am

A few more numbers, for 1938, from an LMS railway historical society site:
http://www.lmssociety.org.uk/LMS/LMS_stats.shtml
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Re: PRR vs. London Midland & Scottish

Postby Statkowski » Tue Jul 04, 2017 4:15 pm

Allen Hazen wrote:(*) And, of course, financial comparisons between countries with very different economies are problematic….


We're also trying to compare private enterprise with government ownership/control. One is trying to make money, the other is trying to keep people employed. One was running longer and heavier freight trains, the other ran frequent, short passenger trains.

"Problematic" would be an understatement.
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Wed Jul 05, 2017 1:35 am

Lots of problematic stuff, but I'm not sure the contrast between private ownership and government is important here: we are comparing the Pennsylvania with the PRE-nationalization, privately owned, LMS. Though, of course, even if both companies were privately owned, the regulatory (etc) environments wouldn't have been the same, so one may have had more government influence…

And, of course, you are spot on in noting that one did more freight and the other more passenger work: so comparing the two railroads in "size" is sort of like comparing elephants and giraffes-- does "bigger" mean taller or fatter?
(Thanks for reminding me of this string: I meant to try to dig up some more information, but got distracted. Will see what I can find in the next week.)
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Thu Jul 06, 2017 1:46 am

I haven't fully explored the LMS Society website (linked 3 posts up), but I found a couple of numbers.
In 1938, LMS revenue from passenger trains was 22 million pounds, and its revenue from freight trains was 36 million pounds. And the rate of exchange before WW II was roughly, approximately, about 5 U.S. dollars to the pound. So LMS revenue from its rail operations was about $290,000,000. Which, if I can find a comparable figure for the PRR, will give us a stab at an economic comparison. (A rough economic comparison: for many, many reasons, some of them mentioned earlier, comparisons between firms in different economies are not straightforward.
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Thu Jul 06, 2017 4:51 pm

Yesterday's numbers for LMS freight and passenger revenue for 1938(*) are from the bottom of the "Freight Workings" page listed in the "LMS Topics" section of the directory on the left-hand side of the LMS home page. The total revenue shown is 63 million pounds: I have no idea where the extra 5 million came from. (LMS had canal operations, road operations, and ships: these are possibilities. They also owned hotels. Your guess is as good as mine.) So let's round off to, as they say for numbers in science, "one significant digit": 60 million pounds. Given all the other problems in comparing the "size" of the LMS with that of the PRR, I doubt trying to make things much more precise than that is worth while.

Rates of exchange vary from day to day. 5 U.S. dollars to one U.K. pound is thus an APPROXIMATION, but I don't think it is an unreasonable one for the period before the Second World War. (It also explains why the U.S. 25 cent coin is almost exactly the same size as a British shilling (as it was called before Britain decimalized its currency) or 5P piece (as it's called now).)

So, the other side of the comparison. According to the "Centennial History of the Pennsylvania Railroad Company" (fat red book, published by the railroad in 1949, and I think re-printed by Kalmbach in the 1970s), the "revenue" of the PRR in 1938 was 431 million U.S. dollars.

Which makes it seem as if the PRR was definitely "bigger" than the LMS, but in pretty much the same league.
(Complications, in case you haven't thought of them yourselves:
--That takes the rate of exchange between dollars and pounds at face values: I don't know what the "cost of living" comparison between the U.S. and the U.K. was, and the rate of exchange-- though relevant to international trade-- isn't a divinely revealed "objective" comparison of the "value" of the currencies.
--The PRR, in 1938, had an operating ratio of 71.2 %. I don't know what the LMS's was. If one of the companies was (for whatever reason: competitive environment and government regulation are two good ones) operating at a higher profit margin, the comparison of revenues isn't a good indicator of "amount of railroad business done." Operating expenses might be a better guide: PRR's were 307 million dollars, but I don't know what the LMS's were.

Bottom line: they were both very big railroads, but differed in so many ways that comparison is difficult.

--
(*) 1938 seems like a good year to choose: after business had pretty much recovered from the Depression, and the last "normal" year before WW II. The LMS didn't really have a chance to recover from the effects of the war before it was nationalized, so you could say 1938 was its last "normal" year ever.
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Thu Jul 06, 2017 5:00 pm

Correction: the figures for the PRR in my last post were for 1939. (1938's numbers were significantly lower: the U.S. government eased off on its depression-fighting too quickly in 1937 and there was a serious Recession.)

Since the activity of railroading is more interesting than economics, it would be more interesting, I think, to compare the amount of freight and passenger traffic on the two railroads. Alas! The LMS website gives total number of passenger boardings and freight ton loadings, whereas the PRR book gives passenger miles and ton miles. Sniff.
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Re: PRR vs LMS

Postby timz » Thu Jul 13, 2017 9:44 pm

First place to look for stats for US RRs is the annual ICC reports. Lots of them online at hathitrust.org-- search for "annual statistics railways united states". (Click on "Catalog", not "Full-Text". You'll get 24 results, and the first one is what you want.)

Much easier to look at the actual book, but with a bit of a struggle you can learn that in 1939 PRR carried 149 million tons of freight, and had 34.75 billion net revenue freight ton-miles. Also gives freight and passenger revenue, and passenger count and passenger-miles.

If you haven't seen those books, try looking at the 1940. The stats begin on page 306, with 18 pages of stats for the first batch of RRs, followed by 18 pages on the next batch of RRs and so on. PRR is in the third batch, pages 342 to 359.

The left, even-number page labels the stat for each line number down the page; the right-hand odd-number page (where PRR happens to be) only has the line numbers.
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Fri Jul 14, 2017 1:16 pm

Timz-- Thank you, very much!
No time to search now, but re: "Much easier to look at the actual book, but with a bit of a struggle you can learn that in 1939 PRR carried 149 million tons of freight, and had 34.75 billion net revenue freight ton-miles." The LMS website linked above says LMS carried about 100 million tons of freight in 1938: so, about 2/3 of PRR's total.(*) My guess, given the likely distances covered (northeastern U.S.A. is a lot bigger than the U.K.), is that the disparity would be greater in ton-miles.
--
(*) Well, 2/3 if the tons are the same size. Given American practice, PRR's figures are probably for 2000 pound "short" tons. I'm not sure whether the LMS's are in that or in 2240 pound "long" tons. (Who was it who said that Britain and America were "two countries divided by a common language?")
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Re: PRR vs. London Midland & Scottish

Postby ExCon90 » Fri Jul 14, 2017 3:20 pm

It's attributed to George Bernard Shaw. And the British figures are almost certainly in 2240-lb. tons. I read somewhere the explanation of why precisely 2240 lbs.:
In Britain a stone = 14 lbs., and eight stone = one hundredweight, thus 112 lbs. (If you can get your mind around that, the rest is plain sailing.) A ton is 20 hundredweights, just as in America; since 20 hundredweights equal one ton, it follows that the ton will weigh 2240 lbs. Just to complicate matters further, in North America certain bulk commodities, like ore, are bought and sold in "gross" tons of 2240 lbs. rather than "net" tons of 2000 lbs.
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Re: PRR vs. London Midland & Scottish

Postby Allen Hazen » Sat Jul 15, 2017 4:05 pm

ExCon90--
And that's even without worrying about the difference between pounds Troy and pounds Avoirdupois! And, just to keep things interesting, there is also the Tonne, a.k.a. the metric ton, of about 2200 pounds.
And lets not get started on the different things "ton" can mean in saying how big a ship is.

The current state of the main question is that probably, on various more or less meaningful measures, the Pennsylvania Railroad was a bit bigger than the London, Midland, and Scottish… but both were big enough to involve lots and lots of varied and fascinating railroading!
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Re: PRR vs. London Midland & Scottish

Postby Statkowski » Mon Jul 17, 2017 6:03 am

And if any ocean (break bulk/noncontainerized) transport enters into the fray, one must consider Measurement Tons (40 cubic feet). Whichever is greater, Short Ton or Measurement Ton, that's what the billing will be based on.
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