The economic problems arising in Europe's growing industrial towns were treated as a local issue in the nineteenth century. Central government kept out of it, especially if there were likely to be demands on the public purse. It was different for railways and telegraph, which involved regional and national networks and, by joining up different parts of the country, offered economic and political benefits at a national level. In all countries, except Belgium, the initial development of the new nineteenth-century railway infrastructures was undertaken by the private sector. The risks were large and the benefits, in the early decades, far from clear. In some regions even sovereigns could be unhelpful. In the Kingdom of the two Sicilies, ‘Ferdinand II would allow no tunnels, thinking them immoral, attached a chapel to every station, and allowed no trains to run at night or on holidays’.

The attitudes of most governments, however, were more supportive. They were strongly affected by the experience of Britain. It was the first industrial nation and successfully developed the trunk network of its railway system in the 1830s and 1840s under private ownership, and there seems little doubt that central governments in continental Europe wanted to encourage railway development. Everywhere they provided guarantees of interest on railway investment projects. In France and Germany the intervention of the government was initially hesitant. France, a country still with a large peasantry and a middle class seemingly more interested in government bonds and property, was short of capital for railways.