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Established in 1923, the Southern Railway linked London with the Channel ports, South West England, South coast resorts and Kent. It was the smallest of the 'Big Four' railway companies, with most of its revenue coming from passenger traffic rather than freight in the more densely populated region of Southern England.

The electrification of the region began in 1929 under the management of Sir Herbert Walker and, when it was completed, the Southern Railway was the world's largest electrified railway system.
Designed for long distance, semi-fast services, the Class 2-HAL was a development of the earlier Class 2-BIL, with some changes to the body construction. The wooden frame and canvas covered wooden roof was retained, whilst the cab was constructed of welded steel. The galvanised steel sheeting sides replaced wooden panels, with internal partitions being made of plywood. Powered by two 275hp traction motors via a third rail, the 129' 5" long two car unit had a top speed of 75mph and weighed 76 tons.

A total of 100, two car sets were built at the Southern Railway’s Eastleigh Works, using frames from the Lancing Works. The first batch of 76, numbered 2601 - 2676, were built in 1938 for service on the London to Maidstone and Gillingham routes in Kent. This was far more than was actually required for the Medway service and was the largest single batch of main line semi-fast stock ever built by the Southern Railway.
The finish was less luxurious than the 2-BIL, 2-NOL and 4-LAV Classes that preceded the 2-HAL, particularly in Third Class where seating was thinly padded, drably upholstered and with painted woodwork replacing the traditional polished mahogany. The 2-HAL had only one lavatory per two car set, as opposed to two on the 2-BIL. The passenger capacity was originally 32 in First Class, which was later reduced to 24, and 102 in Third Class.

In 1939 a second batch, numbered 2677 - 2692, was built for service on the London Waterloo to Aldershot and Reading routes, the only improvement being more attractive upholstery in the Third Class coaches. Some of the 2-HALs allotted to Medway were subsequently moved to the Aldershot/Reading routes, being used for mass transportation of troops around Southern England at the start of World War 2 and following the evacuation at Dunkirk.
In 1948 a third batch, numbered 2693 - 2699, was built but these units had a completely different appearance, being all-steel construction and looking very much like the standard 4-SUB units being built at the same time. A final unit, No. 2700, was built in 1950 as an accident replacement.

The Class as a whole passed to the newly formed British Railways in 1948, being re-classified as TOPS Class 402 and remaining in service until the mid-1960s when they were replaced by the large new build of 2-HAP units. The last sets in passenger traffic were No. 2695, No. 2698 and No. 2699, which were withdrawn in July 1971.