London, Chatham and Dover Railway


The London, Chatham and Dover Railway was a railway company in south-eastern England. It was created on 1 August 1859, when the East Kent Railway was given parliamentary approval to change its name. Its lines ran through London, and northern and eastern Kent, to form a significant part of the Greater London commuter network. The company existed until 31 December 1922, when its assets were merged with those of other companies to form the Southern Railway as a result of the grouping determined by the Railways Act 1921.
The LCDR was always in a difficult financial situation and went bankrupt in 1867, although it was able to continue to operate. Many of the difficulties were caused by the intense competition and duplication of services with the South Eastern Railway. In 1898, the LCDR agreed with the SER to share the operation of the two railways, working them as a single system, known as the South Eastern and Chatham Railway, and pooling receipts, but it was not a full amalgamation. The SER and LCDR remained separate companies, with separate shareholders, until both became constituents of the Southern Railway on 1 January 1923.
"The Chatham", as it was sometimes known, was often criticised for its lamentable carriage stock and poor punctuality, something which Somerset Maugham refers to in the novel Mrs Craddock: "Suddenly she thought of going away there and then... But there were no trains: the London, Chatham, and Dover Railway has perhaps saved many an elopement". However, in two respects the LCDR was very enterprising: it used the highly effective Westinghouse air brake on its passenger stock, and the Sykes "Lock and Block" system of signalling. As a result, it had an excellent safety record.

History

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. Permission to build a new line from Strood near Rochester to Faversham was granted by Parliament in the East Kent Railway Act 1853, but the SER successfully fought off an attempt by the new company to secure running powers on its tracks. 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 that the first section of the line from to Faversham was opened, with stations at Rainham, Sittingbourne, Teynham, and Faversham. On 29 March 1858, a second section opened, from Strood to Chatham. Around July 1858, a station opened at New Brompton. Rochester station opened after the rival SER opened Chatham Central station.
On 3 March 1858, the West End of London and Crystal Palace Railway opened the extension of its line from Norwood to Beckenham Junction and Shortlands .
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. From there the Crays Company was building a line on to Bromley South and Bickley. The Mid Kent line connected with the WELCPR that later provided the essential access to London. After absorbing the Crays Company and gaining running rights over the Mid Kent metals to Beckenham Junction, the LCDR later bought 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, although Dover had not then been reached, coinciding with the Western Extension via Longfield to join the Crays Company rails at Southborough Road.

London, Chatham and Dover Railway

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.
  • Greenwich Park branch – Nunhead to Greenwich Park, closed by Southern on 1 January 1926, although a section was kept in use, and is used to this day as a link between Nunhead and Lewisham
Stations on the Greenwich Branch were
  • Brockley Lane
  • Lewisham Road
  • Blackheath Hill
  • Greenwich Park

    Insolvency

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 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."