page_title: History of rail transport in Japan
section_title: 1906 nationalization
hierarchical_section_title: History of rail transport in Japan / Stage 2, 1906–1945 / 1906 nationalization
caption_attribution_description: D51型170号機(肥薩線・矢岳駅) Steam Locomotive D51
context_page_description: The history of rail transport in Japan began in the late Edo period. There have been four main stages:
  Stage 1, from 1872, the first line, from Tokyo to Yokohama, to the end of the Russo-Japanese war;
  Stage 2, from nationalization in 1906-07 to the end of World War II;
  Stage 3, from the postwar creation of Japanese National Railways to 1987;
  Stage 4, from privatization to the present, with JNR split between six new railway operators for passengers and one for freight.
context_section_description: The military expressed concern about the delays in troop movements that occurred during the 1904–05 Russo-Japanese War, and attributed such delays to the mix of private and government railway ownership. Whether reasonable or not, the attribution tipped the balance in favour of nationalization of the major railway companies, and in 1906 the Government proposed to nationalize 42 railway companies, though ultimately 17 companies were involved, including the "Big 5" companies (Nippon, San'yō, Kyushu and Kansai Railway companies and the Hokkaido Coal & Railway Co), and covering virtually all main intercity/regional routes. 
  The major shareholders of the railway companies being nationalized welcomed the move, for differing reasons. In the case of the "Big 5" companies, dividend payments had predominated over capital expenditure on maintenance and improvements, and such deferred expenditure was a looming liability had nationalization not occurred. In the case of smaller companies which had not been as profitable as the "Big 5", the market for Government bonds (which were used to pay for the nationalization) was usually better than for shares in the smaller railways, as well as providing at least the same, if not a better rate of return.
  The legislation authorizing the nationalization also provided for the continuation of private railways (and creation of new companies) providing local (ie. non main line) rail transport. However, as most such lines would be less (or un)profitable branch lines, the 1910 Light Railways Act was required to authorize construction of lower cost lines, including 2'6" gauge lines, in order to enable provision of railways to smaller and/or more remote communities.
  Some of the resulting lines initially constructed to 2'6" gauge were later regauged to 3'6" where there was economic justification to do so.
caption: D51, debuted in 1936, is the most mass-produced steam locomotive in Japan with 1,115 units.
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