History of Japanese Railroading: Early Years
Trains were introduced to Japan by the Europeans, but rapidly adopted by a nation eager to industrialize in the late 1800’s. Model railroads brought as gifts by traders served as an introduction, the first steam train (a demonstrator) ran on an eight-mile line in Nagasaki in 1868, and the first real railroad was completed in 1872, shortly after the restoration of the Imperial government. That first railroad was financed by a million pounds worth of government bonds, sold in London, and ran from Tōkyō (Shimbashi Station) to Yokohama.
In the first decade, the railroad was built and operated primarily by British railroaders, and this may account for the selection of Cape Gauge (3-foot, 6-inches, or 1,067 mm, between the rails), a track size popular in many Commonwealth nations in that era. But this was just the beginning, and the Japanese soon learned to build and operate their own railroads, without the need for very highly paid experts (by one report the British General Manager earned 2,000 yen, when the highest ranking government minister earned just 800 yen). The new government, however, was lacking in funds to invest in railroad construction, and eventually, reluctantly, authorized private companies.
Nippon Railway (Nippon Tetsudo), one of the first private companies, completed a part of what would later be known as the Tōhoku Main Line from Ueno outside Tōkyō to Aomori 739 km to the north in 1891 (or 1893, reports vary). The trip took 20 hours and 5 minutes then, behind a steam locomotive. Today, the trip takes 12 hours by normal train, or 4 hours by Shinkansen. The Nippon Railway was reportedly financed by former nobles of the Shogunate, who had been compensated with money after the Imperial government was restored and they lost their feudal positions.
Other private railroads followed, and the Kyoto Electric Tramway, opened in 1895, became the first electric railroad (another report says the Kyūshū Electric Railroad, also 1895, was first). In 1904 the first steam line was electrified. This was the Kobu Railway, now part of the Chuo line, between Manseibashi (near the present Akihabara) and Nakano in Tōkyō, a distance of about a dozen kilometers (8 miles). Both steam and electric-multiple-unit (EMU) trains shared its rails. The endpoints are sometimes described as Iidamachi or Ochanomizu on the east end (the two stations to the west of Manseibashi), and on the west end as Hachioji.
The Kobu Railway initially used 600 volt DC, then 1,200 volt AC, before standardizing on 1,500 volt DC power, which would be used by most later lines until the Shinkansen was built. The reason for this is unclear, but 1,500 volt DC was in use in England, and most electrical components were being imported at this time.
By 1905, private railroads had twice the length of track of the government railroad. In 1906, seventeen private railroads including the Kobu Railway, were nationalized into the Kokuyū Tetsudō, which would persist under various names until it was broken up into the seven companies of the Japan Railway Group (JR Group, or just JR) in 1987. In 1906, the nationalized railway consisted of 4,833 km of track. Private railroads continued to exist after this, but handled a small percentage of traffic.
(this is incomplete as the original was written from a variety of online historic documents without noting sources; these are being added)
Structural Reform in the Rail Industry, OECD Policy Roundtable document (PDF).
Section on Japanese Rail Freight, pg 191 notes JNR profitability issues after 1964.