Trains were hauled by company steam locomotives between the two towns, though private wagons and carriages were allowed. Cable haulage of freight trains was down the steeply-graded 1.26-mile Wapping Tunnel to Liverpool Docks from Edge Hill junction. The railway was primarily built to provide faster transport of raw materials, finished goods and passengers between the Port of Liverpool and mills in Manchester and surrounding towns.
The railway was a financial success, paying investors an average annual dividend of 9.5% over the 15 years of its independent existence: a level of profitability that would never again be attained by a British railway company. In 1845 the railway was absorbed by its principal business partner, the Grand Junction Railway (GJR), which in turn amalgamated the following year with the London and Birmingham Railway and the Manchester and Birmingham Railway to form the London and North Western Railway.
The Liverpool and Manchester Railway was the first public transport system on land which did not use animal traction power. Up to then, the only rail systems for public use had been:
Often described as the Grand British Experimental Railway, the success or failure of which would decide plans for all future railways, the L&MR was intended to achieve cheap transport of raw materials, finished goods and passengers between the Port of Liverpool and east Lancashire, in the port's hinterland. Huge tonnages of textile raw material were imported through Liverpool and carried to the textile mills near the Pennines where water and then steam power enabled the production of the finished cloth.
The existing means of water transport, the Mersey and Irwell Navigation and the Bridgewater Canal, dated from the previous century, and were felt to be making excessive profits from the existing trade and throttling the growth of Manchester and other towns. (Similar feelings with regard to the railways led in turn to the construction of the Manchester Ship Canal in the 1890s). There was support for the railway from both Liverpool and London. Manchester was largely indifferent, but opposition came from the two local Lords, the Earl of Derby and the Earl of Sefton over whose land the railway was proposed to pass, plus the canal operators.