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The Metropolitan Railway and the Metropolitan District Railway were two separate companies responsible for the construction of the first two underground railways in London. The Metropolitan Railway was begun in 1860, running between Farringdon and Paddington through Kings Cross. This was extended to Hammersmith in 1864 and Moorgate in 1865. Plans were made for an 'Inner Circle' which would link the two ends of the line. A line between Paddington and South Kensington was opened in 1868 and between Moorgate and Aldgate in 1876.
The line between South Kensington and Mansion House was constructed by the Metropolitan District Railway in 1871, which was founded to raise the capital needed to complete the Inner Circle. The expectation was that the two companies would merge once work was completed. However, they instead had a falling out over finances (and a personality clash of the two Chairmen) and began to run separate services using the same lines. Some agreement was eventually reached so that the final section of line, between Mansion House and Aldgate, was completed in 1884. Both companies continued to expand beyond the Inner Circle, thus laying the foundations of the modern London Underground Circle, Hammersmith and City, District and Metropolitan lines.
The two companies formed a joint committee from 1901 to work together on the electrification of the Inner Circle. The Metropolitan District Railway was subsequently purchased by Underground Electric Railways Company of London Limited (later the London Electric Railway). Both companies became part of the London Passenger Transport Board in 1933.