Investing and Money Glossary, terms and definitions.

Railway mania

Railway mania was the term given to the speculative frenzy in Britain in the 1840s. It followed a common pattern: as the price of railway shares increased, more and more money was poured in by speculators, until the inevitable collapse.

Unlike some stock market bubbles, however, there was actually a net tangible result from all the investment: a vast expansion of the British railway system, though perhaps at an inflated cost.

Railway mania can be compared with the similar craze in the 1990s, where a vast amount of fibre-optic telecommunications infrastructure was installed.