THE MIDLAND RAILWAY AND "KING HUDSON"
In the year 1851 the Midland Railway was 521 miles long; it is now 2,063.
Then its capital was 15,800,000, against 130,000,000 pounds to-day. Then
the gross revenue was 1,186,000 and now it has reached 15,960,000 pounds.
When I say _now_, I refer to 1913, the year prior to the war, as since
then, owing to Government control, non-division of through traffic and
curtailment of accounts, the actual receipts earned by individual
companies are not published, and, indeed, are not known.
Eighteen hundred and fifty-one was a period of anxiety to the Midland and
to railway companies generally. Financial depression had succeeded a
time of wild excitement, and the Midland dividend had fallen from seven
to two per cent.! It was the year of the great Exhibition, which Lord
Cholmondeley considered _the_ event of modern times and many
over-sanguine people expected it to inaugurate a universal peace. On the
other hand Carlyle uttered fierce denunciations against it. It certainly
excited far more interest than has any exhibition since. Then, nothing
of the kind had ever before been seen. Railway expectations ran high;
immense traffic receipts, sorely needed, ought to have swelled the
coffers of the companies. But no! vast numbers of people certainly
travelled to London, but a mad competition, as foolish almost as the
preceding _mania_, set in, and passenger fares were again and again
reduced, till expected profits disappeared and loss and disappointment
were the only result. The policy of Parliament in encouraging the
construction of rival railway routes and in fostering competition in the
supposed interest of the public was, even in those early days, bearing
fruit--dead sea fruit, as many a luckless holder of railway stock learned
to his cost.
Railway shareholders throughout the kingdom were growing angry. In the
case of the Midland--they appointed a committee of inquiry, and the
directors assented to the appointment. This committee was to examine and
report upon the general and financial conditions of the company, and was
invested with large powers.
About the same time also interviews took place between the Midland and
the London and North-Western, with the object of arranging an
amalgamation of the two systems. Some progress was made, but no formal
_engagement_ resulted, and so a very desirable union, between an
aristocratic bridegroom and a democratic bride, remained unaccomplished.
Mr. Ellis was chairman of the Midland at this time and Mr. George Carr
Glyn, afterwards the first Lord Wolverton, occupied a similar position on
the Board of the London and North-Western. Mr. Ellis had succeeded Mr.
Hudson--the "_Railway King_," so christened by Sydney Smith. Mr. Hudson
in 1844 was chairman of the first shareholders' meeting of the Midland
Railway. Prior to that date the Midland consisted of three separate
railways. In 1849 Mr. Hudson presided for the last time at a Midland
meeting, and in the following year resigned his office of chairman of the
company.
The story of the meteoric reign of the "_Railway King_" excited much
interest when I was young, and it may not be out of place to touch upon
some of the incidents of his career.
George Hudson was born in 1800, served his apprenticeship in the
cathedral city of York and subsequently became a linendraper there and a
man of property.
Many years afterwards he is reported to have said that the happiest days
of his life passed while he stood behind his counter using the yardstick,
a statement which should perhaps only be accepted under reservation. He
was undoubtedly a man of a bold and adventurous spirit, possessed of an
ambition which soared far above the measuring of calicoes or the
retailing of ribbons; but perhaps the observation was tinged by the
environment of later and less happy days when his star had set, his
kingly reign come to an end, and when possibly vain regrets had
embittered his existence. It was, I should imagine, midst the fierceness
of the strife and fury of the _mania_ times, when his powerful
personality counted for so much, that he reached the zenith of his
happiness.
[George Hudson: hudson.jpg]
Whilst conducting in York his linendraper business, a relation died and
left him money. The railway boom had then begun. He flung his yardstick
behind him and entered the railway fray. The Liverpool and Manchester
line and its wonderful success--it paid ten per cent.--greatly impressed
the public mind, and the good people of York determined they would have a
railway to London.
A committee was appointed to carry out the project. On this committee
Mr. Hudson was placed, and it was mainly owing to his energy and skill
that the scheme came to a successful issue. He was rewarded by being
made chairman of the company.
This was his entrance into the railway world where, for a time, he was
monarch. He must have been a man of shrewdness and capacity. It is
recorded that he acquired the land for the York to London railway at an
average cost of 1,750 pounds per mile whilst that of the North Midland
cost over 5,000 pounds.
On the 1st July, 1840, this linendraper of York had the proud pleasure of
seeing the first train from York to London start on its journey.
From this achievement he advanced to others. He and his friends obtained
the lease, for thirty-one years, of a rival line, which turned out a
great financial success. His enterprise and energy were boundless.
It is said that his bold spirit, his capacity for work and his great
influence daunted his most determined opponents. For instance, the North
Midland railway, part predecessor of _the_ Midland, was involved in
difficulty. He appeared before the shareholders, offered, if his advice
and methods were adopted, to guarantee double the then dividend. His
offer was accepted and he was made chairman, and from that position
became chairman, and for a time dictator, of the amalgamated Midland
system. Clearly his business abilities were great; his reforms were bold
and drastic, and success attended his efforts. He soon became the
greatest railway authority in England. For a time the entire railway
system in the north was under his control, and the confidence reposed in
him was unbounded. He was the lion of the day: princes, peers and
prelates, capitalists and fine ladies sought his society, paid homage to
his power, besought his advice and lavished upon him unstinted adulation.
In 1845 the railway mania was at its height. It is said that during two
or three months of that year as much as 100,000 pounds per week were
expended in advertisements in connection with railway promotions, railway
meetings and railway matters generally. Scarcely credible this, but so
it is seriously stated. Huge sums were wasted in the promotion and
construction of British railways in early days, from which, in their
excessive capital cost, they suffer now. In the _mania_ period railways
sprang into existence so quickly that, to use the words of Robert
Stephenson, they "appeared like the realisation of fabled powers or the
magician's wand." The _Illustrated London News_ of the day said:
"Railway speculation has become the sole object of the world--cupidity is
aroused and roguery shields itself under its name, as a more safe and
rapid way of gaining its ends. Abroad, as well as at home, has it proved
the rallying point of all rascality--the honest man is carried away by
the current and becomes absorbed in the vortex; the timid, the quiet, the
moral are, after some hesitation, caught in the whirlpool and follow
those whom they have watched with pity and derision."
Powers were granted by Parliament in the year 1845 to construct no less
than 2,883 miles of new railway at an expenditure of about 44,000,000
pounds; and in the next year (1846) applications were made to Parliament
for authority to raise 389,000,000 pounds for the construction of further
lines. These powers were granted to the extent of 4,790 miles at a cost
of about 120,000,000 pounds.
Soon there came a change; disaster followed success; securities fell;
dividends diminished or disappeared altogether or, as was in some cases
discovered, were paid out of capital, and disappointment and ruin
followed. King Hudson's methods came under a fierce fire of criticism;
adulation was succeeded by abuse and he was disgraced and dethroned. A
writer of the day said, "Mr. Hudson is neither better nor worse than the
morality of his time." From affluence he came to want, and in his old
age a fund was raised sufficient to purchase him an annuity of 600 pounds
a year.
About this time, that most useful Institution the Railway Clearing House
received Parliamentary sanction. The _Railway Clearing System Act_ 1850
gave it statutory recognition. Its functions have been defined thus: "To
settle and adjust the receipts arising from railway traffic within, or
partly within, the United Kingdom, and passing over more than one railway
within the United Kingdom, booked or invoiced at throughout rates of
fares." The system had then been in existence, in a more or less
informal way, for about eight years. Mr. Allport, on one occasion, said
that whilst he was with the Birmingham and Derby railway (before he
became general manager of the Midland) the process of settlement of
receipts for through traffic was tedious and difficult, and it occurred
to him that a system should be adopted similar to that which existed in
London and was known as the Bankers' Clearing House. It was also said
that Mr. Kenneth Morrison, Auditor of the London and Birmingham line, was
the first to see and proclaim the necessity for a Clearing House. Be
that as it may, the Railway Clearing House, as a practical entity, came
into being in 1842. In the beginning it only embraced nine companies,
and six people were enough to do its work. The companies were:--
London and Birmingham, Midland Counties, Birmingham and Derby, North
Midland, Leeds and Selby, York and North Midland, Hull and Selby,
Great North of England, Manchester and Leeds.
Not one of these has preserved its original name. All have been merged
in either the London and North-Western, the North-Eastern, the Midland or
the Lancashire and Yorkshire.
At the present day the Clearing House consists of practically the whole
of the railway companies in the United Kingdom, though some of the small
and unimportant lines are outside its sphere. Ireland has a Railway
Clearing House of its own--established in the year 1848--to which
practically all Irish railway companies, and they are numerous, belong;
and the six principal Irish railways are members of the London Clearing
House.
The English house, situated in Seymour Street, Euston Square, is an
extensive establishment, and accommodates 2,500 clerks. As I write, the
number under its roof is, by war conditions, reduced to about 900.
Serving with His Majesty's Forces are nearly 1,200, and about 400 have
been temporarily transferred to the railway companies, to the Government
service and to munition factories.
In 1842, when the Clearing House first began, the staff, as I have said,
numbered six, and the companies nine. Fifty-eight railway companies now
belong to the House, and the amount of money dealt with by way of
division and apportionment in the year before the war was 31,071,910
pounds. In 1842 it was 193,246 pounds.