Content area
Full Text
Abstract The wild boom and slump of 1845-1847 was the most important of the nineteenth century railway manias, in terms both of its scale and effects on the economy as a whole. It has almost invariably been seen as a market irrationality, a view fundamentally challenged by Bryer's theorisation of it as a deliberate and collusive device of the "London wealthy", aided by central government, to swindle provincial middle class investors. This analysis also greatly extended previous perspectives on the role of accounting by asserting that accounting practices were crucial to the success of the process and were thus "deeply implicated" in a great, class-based swindle. The acceptance of such a perspective would have important implications for the way we understand the functioning of accounting and capitalism in the mid-nineteenth century, but this paper instead argues that such notions are misconceived, looking to both the evidence that was available when Bryer's paper was written and to recently collected data on the depreciation accounting practices of the time.
Keywords Accounting history, Railways, Depreciation
Introduction
Investment manias were one of the most striking features of the eighteenth and early nineteenth century British economy. The first was the South Sea Bubble of 1719-1720, the second was the canal mania of 1791-1794, when more than 40 new inland waterways were authorized, but it was the anticipated returns of the new railway companies that provoked most excitement, leading to successive manias in 1824-1825, 1835-1837 and 1845-1847 (Hawke and Reed, 1969, p. 269; Mitchell, 1964, p. 315).
The mania of 1824-5 was largely a speculative "bubble"; the emerging technology prompted the publication of prospectuses for more than 70 lines, 40 of which reached the parliamentary stage, but the boom ended after a commercial crisis in December 1825 dampened the enthusiasm of investors and only one major scheme was completed (Simmons and Biddle, 1997, p. 311). Nonetheless, the opening of the line concerned - the Liverpool and Manchester - in 1830 greatly encouraged further railway projects which were to transform the British economy and also virtually complete the UK main-line system by 1850 (Checkland, 1971, p. 36).
Most of these promotions took place in two periods, 1835-1837 and 18451847, the latter being on a much larger scale and having far...