In a few countries in the world, railway development was planned centrally by governments, which then granted concessions for building and operation. This was not the case in Britain. It was left to private individuals in the form of promoters and financiers to establish the profitable routes between established centres. Competing companies carved out areas they regarded as their own. They even built 'blocking' lines, unprofitable in themselves but preventing incursions from other companies.
In 1844 66 applications to build new railways were made to Parliament. A Select Committee was formed to deal with them and, later that year, an Act for the regulation of railways was passed, giving some government control over new developments.
The way was now clear for the frenzy of speculation later called 'Railway Mania'. In some ways it was similar to the 'dot.com bubble' of 1999-2000. Hundreds of Bills for new railways were submitted in 1845 and 1846. Many of these projects were not realistic and had been floated largely for speculative purposes. Buying and selling of shares in these companies took place on a vast scale. Many subscribers for shares found themselves unable to meet their obligations, and were ruined. Some committed suicide. The mania subsided within a few months, but for many years left a legacy of mistrust in railway investment.
One railway speculator who rose higher and fell harder than most was George Hudson. He began as a draper’s assistant in York, became a successful draper in his own right and came into a legacy of £30,000. From 1835 he invested it in various railway companies in the midlands and north of England, and gathered them into a coordinated network. Hudson himself became extremely wealthy and was nicknamed 'The Railway King' by the essayist Sydney Smith. However, in his impatience to achieve results, Hudson’s dealings with his companies could be autocratic and some of his activities bordered on the illegal. Following increasing clamour by shareholders he resigned all his chairmanships in 1849, and in 1853 lost a court action concerning his share dealings. The 'The Railway King' was soon penniless and he died in obscurity.
The growth of railways in Britain was scarcely deflected by the speculative mania of the 1840s. It expanded rapidly (the route mileage rose from about 1,850 in 1840 to more than 6,600 in 1850) until a basic national network emerged. The relative speed and cheapness of rail travel probably helped to ensure the success of the Great Exhibition, held in London in 1851. By 1860 the route mileage had risen to nearly 10,500.