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FACTS, FAU.URES, AND FRAUDS:

^\cijtInttons,

riXANCIAL, MERCANTILE, CRIMINAL.

BY

D. MORIER EVANS.

LONDON : GKOOMBEIDGE & SONS, 5, PATEENOSTEK EOW.

KDCCOUX.

LONDON!

•\ I /*

SHOMAS HAKRILD, <;'",M,^-? PALISBTJEY SQUARE,

PIiESI SIBEBT.

U^n AHY mXERSlTY 01.' CALIFORNU V« ^ SAIVXA BAilB^UU

TO THE EEADER.

This book has been on the anvil of thought two or three years. During that period it has assumed protean shapes ; the practical results will be found in the succeeding pages.

Collecting, as is my custom, from time to time, everything of importance bearing upon topics financial and mercantile, it may be readily imagined that I should not allow to escape the extraordinary revelations which have marked the last decade ; more particularly the Facts, Failures, and Frauds so pro- minently portrayed in the progress of commercial life.

The first notion was not to have compressed these, for the most part, painful narratives into a single issue, but to have extended them to a series, the materials at command and in store being sufficiently ample for the purpose. But ou reflection, and after a great mass of matter had been pre- liminarily arranged, my time having meanwhile become more fully absorbed, that determination was altered, and on con- sultation with my friends, the Brothers Groombridgc, it was agreed that one comprehensive volume should be the medium of communication between me and the public.

The work, notwithstanding it has entailed a considerable amount of labour, and no small share of expense, is not put for^'ard as a pretentious or infallible production. To some of the views objections may be taken ; and individuals whose conduct may have encountered criticism, will, probably, be tempted to think that they have scarcely merited the con- demnation. But as in the majority of instances the verdict

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IV TO TKE EEADEB.

of a Civil, or the sentence of a Criminal, Court has clearly adjudged guilt and awarded punishment, any vindictive prompting cannot be supposed to have dictated the opinions advanced.

One great object, and one alone, induced me to engage in the task of selecting and arranging these remarkable histories, viz., to bring together a complete record of the astounding frauds and forgeries, with other attendant cir- cumstances, which have of late so frequently startled the com- mercial community from their propriety; and hence, while endeavouring to diversify and render interesting each par- ticular narrative, no chapter or section is presented without corroborative evidence of the internal truth of its contents. The trials, and other legal proceediugs, possess a value beyond the mere interest of the moment. Collated and published in this shape, they will be always at hand to establish dates, and other minutuB that may arise, and be available either for the publicist, moralist, or statist, who may desire to consult them at any future period.

The work, in some degree, though presented in a more attractive gmse, may be considered as supplemental to the Commercial Crisis, 1847-48, and antecedent to the History of tlie Crisis, 1857-58, now prepared, and about to be brought forward. The whole of these volumes will exhibit, in a more complete form than already exists, a vast mass of important and interesting information connected with the course of trade during the last twenty years. '

EiECHix La>t;, Lombaed Steee::, Jaiuiary 12, 1859.

COxNTENTS.

CHAPTER I.

"high art" crime.

Its InanguratioD, Development, and Kapid Progress .... 1 — 5

CHAPTER II.

THE RISE AND FALL OF MU. GEORGE HUDSON, SI.P.

The Railway Sj-stem — Its Early Introduction and Progressive Expansion — State of Business anterior thereto — The Appearance of Mr. Hudson on the Scene, and his Assumption of Power in Railway Circles — Subsequent Dis- closures, and his final forced Retirement , 6 — 73

CHAPTER ni.

WALTER WATTS AKD HIS FRAUDS UPON THE GLOBE ASSURANCE OFFICE.

The Age of Appearance — Watts's magnificent but brief Career — His Success as a Man of Fashion and Wealth — His luxurious Mode of Life, alleged Sources of Income and Theatrical Speculations — Failure of the Latter, and the Discovery of his gigantic Frauds — The Investigation at the Globe Assurance Office — The Trial of the Delinquent, and his Suicide in Kewgate , 74 — 105

CHAPTER rV.

THE DEUNQUEKCIES OF MESSRS. STRAHAK, PAUL, AND BATES.

The Surprise created by the Failure — The Blow to Confidence in the Private Banking Interest — The Antecedents of the House — The Position and Relations of the Partners — Social Standing of Mr. Strahan, and the Reli- gious Habits of Sir John Dean Paul — Distressing Disclosures respecting the Appropriation of Securities — The Bankruptcy of the Firm, and sub- sequent Criminal Proceedings against the whole of the Partners 106 — 153

VI C02TTE5TS.

CHAPTER V.

JOSEPH -SVIXDLE COLE AND THE DOCK-WAKKANT FRAtJDS.

The Origin of the Frauds — The Antecedents of Cole and bis Associates ia Business — His Successful Operations and Extension of his Engagements- Connection with Davidson and Gordon — Failure of the respective Firms— The Discovery of the Transactions with Messrs. Overend, Gurney, and Co. — The Position of Mr. David Barclay Chapman — The Bankruptcy of Joseph Windle Cole, and of Davidson and Gordon — The Apprehension of the Former and the Flight of the Latter — ^The Examination respecting the Issue of Spurious Warrants — The Disappearance of Maltby, the supposed Proprietor of Hagen's Wharf— Trial and Conviction of Cole — Death of Maltby — Subsequent Arrest of Davidson and Gordon — Their Trial and Imprisonment 154 — ^225

CHAPTER VI.

THE FEACDS AND FOEGERIES OF JOHN SADLEIE, M.P., A2?D LATE LOED OP THE TREASURY.

His History and Antecedents — Appearance as an Irish Member — Abandonment of Practice as an Attorney, and Entrance into the Arena of Railway Excite- ment— His Popularity as a Man of Business — Acceptance of Seats at the Boards of various Companies — Connection with, and ultimate Elevation to, the Chairmanship of the London and County Bank — His Political Career, and Appointment as a Junior Lord of the Treasury — Eesignation of that Position, and his ultimate Decadence — His Operations in the Encumbered Estates Courts — The Difficulties of the Tipperary Bank, and the Return of its Drafts — The Discovery of his Forgeries, and the Involve- ment of his Friends — His Suicide, and the subsequent Revelations respect- ing his vaiious Crimes ■ . 226 — ^267

CHAPTER VII.

THE EOYAIi BRITISH BANK — ITS SUSPENSION AND GENERAL MISMANAGEMENT.

Its Organization and Proposed Course of Business — The Attempt to develop the Scotch System— Parties identified with its Formation— The Noii- success of Business — The Attempts to Force the Popularity of the Establish- ment— Opening of Branches in various Districts — The Promoters of the Un- dertaking, Mr. John M'Gregor, M.P., Mr. Cameron, and Mr. Mullins — Sala- ries paid to Officials— The Discount Operations of the Bank— The Debts of the Directors, Manager, etc.— Issue of new Shares — Mr. Humphrey Brown's Account— Difficulties of the Bank— Loss of Capital, etc.— The Operation of the Winding-up Clause of the Charter— The Struggle to Preserve Position — ^The Ultimate Decadence of Business — The Suspension in September, 1856 — ^The Contest for the Estate between the Court of Chancery and the Court of Bankruptcy — And the Prosecution aad Trial of the Directors . 268—390

COXTE>TS. Tli

CHAPTER Vm.

THE CBT8TAI. PALACE FBAUDS ASD FORGERIES, PEKPETRATED BT WH.LIAM JA3IKS BOBSOM.

The Commission of High Crimes — Their Progress and Influence— Early His- tory of Robson — His Juvenile Tendencies — Appearance in Business Life — Early Occupation — His Humble Resources and Literary Aspirations — Efforts as a Dramatist, and Career in the World of Letters — Subsequent Engagement at the Great Northern Railway — Tlie Development of his Taste as a Man of Fashion, and his Indulgence in Extravagant Habits — The Transfer of his Services to the Crystal Palace Company— His Strict Attention.to Duties and Business Habits — The Enlargement of his Sphere of Acquaintances, and the Expenditure necessarily involved — His Pro- motion in his Office, and the Confidence placed iu his Integrity — The Confidence of Mr. Fasson, the Head of the Transfer Department, obtained and subsequently abused — The First Step in Crime — The Style of Robson's Living — The Extension of his Frauds, and the Modus operandi — Acci- dental Discovery — Flight — Capture — Bankruptcy and Trial . 391 — 431

CHAPTER IX.

THE GREAT KORTHERN RAILWAY FRAUDS AND FORGERIES BY LEOPOLD REDPATH.

The Specialties of Redpath's Case —His apparent Honesty and Philanthropy- Deep Hypocrisy iu his Career of Crime — His Early Entrance into Life — General Occupation and Tendency — His First Progress and Marriage — Connection with the Peninsular and Oriental Steam Companj- — His Sepa- ration from that Office — Launches out into Business as a Ship and Insurance Broker — Fails, and is made Bankrupt — Eventually emerges into Active Life again, and obtains Employment in the Transfer Department of the Great Northern Railway Company — His Duties and Attention to Busi- ness— He Succeeds Mr. Clark, the First Registrar — His Style of Living — Vaunted Success as a Speculator and Dealer in Reversionary Interests — His Original Forgeries Extended — Princely and Munificent Charity — Patron of the Principal Benevolent Institutions— Excessive Kindness to Poor and Distressed Individuals — His supposed Wealth and Resources — The Detection of Robson leads to Suspicion — Proposed Examination of Books, and his Refusal to Entertain the Proposal — Threatened Resignation, and Ultimate Attempt to Decamii — Flight to Paris — Return, and Surrender to the Police — Second Bankruptcy — Trial and Conviction . . 432 — 483

CHAPTER X.

THE BULUOM ROBBERY OS THE SOUTH-EASTERS RAILWAY, AITD THE CHEQUE FORGERIES OS THE METROPOLITAN BADK&

The Bullion Robbery detailed — Pierce, Agar, and Burgess — Their Connection and Mode of Operations — Saward and Anderson — ^The Association of

VUl CONTENTS.

Sa^vard witn each Scheme of Depredation — Motives of Crime and Course of Development — DiflSculty overcome, and the Plan for the Abstraction of the Bullion accomplished — The Robbery effected while the Train in Motion — The Prize seized and conveyed away — Sale of the Spoil, and the Introduction of J. Townsend Saward — Partition of the Proceeds of the Eobbery — Committal of Agar for another Offence — The Revelations of Fanny Kay, and the Apprehension, Trial, and Conviction of the Prisoners — The Process of the Cheque Forgeries — Connection of Saward, although a Barrister, with Thieves — The Artistic Arrangements for carrying out their Frauds — The Disbanding of this Horde of Criminals — The Efforts of the Police to trace their Career — The Apprehension of Saward and Anderson ; other Auxiliary Accomplices — Their final Trial and Sentence of Trans- portation . . . « 484. — 595

CHAPTEE XI.

THE LONDON AND BASTEIiN BANKING COKPORATION — THE FRAUDULENT TKANSACTIONS OF COLONEL W. PETRIE WAUGH AND MK. J. E. STEPHENS.

The Formation cf the London and Eastern Banking Corporation — Species of Business conducted — The Parties who took the Lead in the Transactions — The Character of Operations intended — The Divergence from the regular Path into personal Advances to the Directors and Managers — The Promi- nent Parties in these Affairs were Colonel W. Petrie Waugh, a Director, Mr. Stephens, the Manager, and Mr. Black, the Secretary' — Tlie Absorp- tion by the former of nearly the whole of the Capital of the Bank — The Decadence of Business, and final Liquidation of Affairs — Flight of Waugh and Stephens — The Bankruptcy of the principal borrowing Director and Manager — The Bankruptcy of the Bank, and the Order for Winding-up in the Court of Chancery . 596—630

APPENDIX.

The London and County and the Tipperary Banks .... 631 — 648

The Proceedings in Bankruptcy of Messrs. Davidson and Gordon . 648 — 701

The TYwes-Chapman Controversy, arising out of the Investigation into

the Affairs of Messrs. Davidson and Gordon and Mr. Joseph Windle

Cole . , , . 701—727

FACTS, FAILUEES, AND FEAIIDS.

CHAPTER I.

"nion aet" ceime — its ixaugueatioit, detelopment,

A>*D EAPID PEOGEESS.

The delight experienced by persons of a sensitive humanity at that alteration in the criminal code, by which death was declared too severe a penalty for the crime of forgery, must have been not a little qualified by the increase of dishonesty that has followed the mitigation of the law. While, on the one hand, the dread of that punishment, which, whatever specious argument may be advanced to the contrary, will ever be regarded with the greatest awe by the multitude, has been cancelled from the list of moral obstacles ; on the other hand, a variety of circumstances favourable to the most reckless speculation have arisen to remind the world of the old days of the South Sea and the Mississippi speculations, and a generally diffused taste for luxurious living has proved a constant incentive to profuse expenditure. With tempta- tions to crime infinitely multiplied, and with impediments reduced to a minimum, it is no wonder that the last twenty years afford materials for one of the darkest pages in the commercial history of this country — that many have arrived at a "high art" in guilt, while "high arts" of a more innocent kind have beeu manifestly on the decline.

Without any great violence, all the incentives to commer- cial crime may be brought under the one common rubric — the desire to make money easily and in a hurry. The apprentice- boy, who robs the till of a few shillings in order that he may enjoy himself on a particular evening ; the gigantic forger or

B

2 FACTS, FATLUEES, A>*D FEAUDS.

swindler, who absorbs thousands that he may outshine the people who live and breathe around him, are so far in the same predicament that they cannot endure any delay to the gratifi- cation of this common passion. Apart from these, but still actuated by the same desire, is the reckless speculator, who would risk everything in the hope of a sudden gain, rather than toil safely and laboriously for a distant reward. The speculator may, of course, be a perfectly honourable man, who would instinctively shrink from any deed that would invoke the interference of the criminal law ; but if fortime is adverse, he is on the high road to wrong-doing, and, moreover, there are many crimes not enumerated in the statute-book that are still heavy sins against the dictates of morality.

The bubble period of 1825-6 — the oldest within the memory of the present generation — and the money crisis of 1836-7, appear rather as forerunners to the events that have more recently shaken the world, than to be new links in the series. It is with the railway mania of 1845 that the modem form of speculation may be said to begin, and the world has not yet recovered from the excitement caused by the spectacle of sudden fortunes made without trouble, and obscure indi- viduals converted, as if by magic, into onillmiaires. Long will Mr. Hudson be remembered as an instance of the celerity with which a reputation could be won and lost at that eventful and remarkable epoch. In the early days of the mania, his name seemed to possess a talismanic value; the mere fact that it was associated with any scheme being alone sufficient to cause a demand for shares, and a consequent rapid advance in prices. When, on the other hand, the dis- covery Avas made that this idol of the money-market had been guilty of the grossest mismanagement, causing a false appear- ance of prosperity by the presentation of deceptive accounts, then every one was ready to assail the object he had so blindly worshipped. However, notwithstanding the great

TACTS, FAILTJEES, A^TD FEAUDS. 8

show of virtuous indignation that took place when the mis- deeds of the celebrated Mr. Hudson were discovered, and he was forced to disgorge part of his ill-gotten wealth, there is no doubt that the generally diffused rage for speculation had considerably lowered the standard of commercial morality, and that many men perpetrated deeds they would liave blushed even to contemplate a few years previously. Those individuals who were unfortunate enough to be exposed, must not be sup- posed nearly to represent the whole amount of special delin- quency committed during the speculative era, since numbers of persons equally guilty, escaped public contumely, simply because they had not the misfortune to be found out.

Eminently characteristic of the period is the extraordinarily large scale on which ordinary crimes are planned, and, for the moment, successfully carried out. From time immemorial, clerks have been discovered embezzling the property of their employers ; but when, save in the middle of the nineteenth century, could it be supposed a case such as that of "Walter "Watts would occur, who, not content with trifling peccadilloes, successively opened two theatres with money surreptitiously ob- tained from the Globe Insurance Company, and managed them in a style of undisputed magnificence in the face of empty treasu- ries. The career of Watts, and his melancholy end in Newgate — death by his own hand — may, in part, be regarded as a symbol of that taste for luxury, and that recklessness in the choice of means to a desired end, which so singularly distinguish the present age.

Many, however, are the names who stand prominent in the history of what may appropriately be termed " high art" crime. "Watts's case was, in some measure, isolated, and partook of the nature of an individual eccentricity; but the fifiiluTe of Messrs. Stralian, Paul, and Bates, and the punish- ment with which their dealings were visited, commenced that series of financial and commercial delinquencies, in which persons of supposed elevated character were involyed, that all

4 FACTS, TAILTJEES, A>'D FBAUDS.

the received tests of respectability seemed to be of no avail, and people literally could not tell -whom they might trust. The extensive delinquencies of J. Windle Cole and his associates, the speculative career and suicide of John Sadleir, the failure of Tipperary Bank, the explosion of the Eoyal British Bank, and the subsequent liquidation of the London and Eastern Banking Corporation, with the revelations of management, shook public confidence in every direction ; and through the latter even the better class of joint-stock banks were regarded with a transient suspicion, through the misdealings of their misguided and dis- honest competitors.*

In the deliberate forgeries of Crystal Palace shares, as committed by Eobson, seem to have occurred a second, and if possible more elaborate, edition of Watts's case. A clerk, with barely an income to support a respectable station, was seized with a desire to become a gentleman of fashion and fortmie — a Maecenas to whom artists might look up with reverence. JNot content with the fame of a dramatist, he assisted managers in their theatrical speculations ; his style of living was of a kind that upholsterers still speak of him with admiration for his taste and powers of arrangement. As a strong and severe contrast to Hobson, who by his specious frauds forced himself into the character of an elegant man of pleasure, stands Leopold Eedpath, the fabricator of Great Northern shares, which provided him the means of assuming the position of the man of heavy respectability. Serious people might reconcile themselves to the fate of the gayer delinquent, and even enlarge on the consequences of worldly dissipa- tion; but Kedpath, the model of morality and charity — the adopter of children and the dispenser of wealth to deserving

* While these pages are passing through the press, the delinquencies connected with the administration of the Liverpool Borough Bank, the Western Bank of Scotland, and the Northumberland and Durham District Bank have been brought to light, and tend to confirm the views expressed in this introductor)' chapter.

FACTS, FAILURES, AOT) THAUDS. 9

institutions — was a blot discovered where it was least expected, and, as niigltt be anticipated, occasioned proportional surprise.

The Englishman may find a melancholy consolation in the reflection that the complicated tale of imprudence and its results, of crime and its punishment, is not confined to his own country. America has her corresponding infamies in the sliape of the Schuyler delinquencies, and the lengthened chain of fraud and dishonesty reaches as far as remote California, with the no- torious defaulter Meiggs, and the Antipodes, where the system of false letters of credit has again been brought into vogue.

In this prefatory chapter it is intended merely to indicate the cases of guilt that, in the course of this work, will be attempted to be described in detail. The closeness with which one crime follows upon another, and the similarity of motive that lies at the bottom of them all, will sufficiently show that they do not represent the simple perverseness of individual natures, but are so many indices of a depreciated, and apparently bad, moral atmosphere that has of late pervaded the whole of the commercial world. The fact stands self- evident that the ruling passion is the grand desire to make money expeditiously, for the purpose of gratifying luxurious propensities, or of indulging in an imposing ostentation. The artificial necessity for expenditure comes first, and the begin- ning of financial crime is the attempt to make an appearance which the legitimate resources of the adventurer in the game of fortune will not justify. Other resoui'ces must, therefore, be found, and thus fraud, forger^-, and misappropriation are called into existence, with all their frightful and heavy legal responsibilities. Indeed, unless the extravagant and pretentious habits of the age are brought within more restrained limits, the volume now presented to the public, full aa it is of the painful records of dishonesty, will be only as a single page in a vast and ever increasing history of the decline and fall of mercantile morality throughout the civilized world.

TACIS, FAILUEES, A^'I> ECAUDS.

CHAPTEE II.

THE EISE AIS'D TALL OF HE. GEOEaE HUDSO"", IM.P.

TLe Eailway System — Its Early Introduction and Progressive Expansion — State of Business anterior thereto — Tlie Appearance of Mr. Hudson on the Scene, and his Assumption of Power in Railway Circles — Sub« sequent Disclosures, and his final forced Ectirement.

The superiority of railway transit to other means of com- munication is now so generally conceded, that no surprise can be felt at tlie further indefinite demand for its extension. The railwajs already formed constitute, in history, the record of a clearly-defined period of transition — one of those ever-recur- ring cycles in which long suspense and needless delay in the application and extension of scientific invention, has been followed by the enthusiastic entertainment of new and novel enterprises, terminating in a wild and general mania. What the character of that mania was, most persons are well able to remember ; viz., its early and bright phases which promised full reward to all who engaged in it ; and its subsequent sombre re- action, accompanied by disclosures which compromised high names, and caused almost universal depression and distress.

Following the date when the superiority of the railway became to be admitted, the period is arrived at which the most vital conditions of success were neglected, and the circumstance of directors, under the bias of temptations which they found irre- sistible, were witnessed sacrificing to immediate gain the future interests of their companies. By supplying tlie public with ficti- tious data, and stimulating further outlays by a dispropor- tionate return on investments, the resources of the old lines were weakened through the endeavour to evade legislative pro- visions for limiting profits ; boards entered on endless schemes

FACTS, PAILUEES, A2fD FBATJDS. 7

for the creation of stock when shares were at a premium, though the new enterprises might afford hut small returns, and thus diminish the general rate of profit derivahle from trunks and existing branches. The result was far more agreeable to indi- viduals to whom means were thus afforded of securing hijrh premiums on new shares than to those who purchased secu- rities unduly enhanced in price as permanent investments, this course of proceeding, in the way of financial management, lead- ing to ruinous disappointment and serious national incon- venience. Though the low price to which shares ultimately fell was generally attributed to the injudicious location of lines, the inadequacy of their traffic, and the exorbitancy of their cost, all these are insufficient to account for that undue depreciation which railway property underwent, and from which it has scarcely yet recovered. For this depreciation reference must be made to the means taken by proprietors to enable them to divide among themselves millions of pounds sterling in the way of premiums, to the creation of nominal capital far exceeding the actual outlay, and to the exhaustive eflects resulting from the highest allowable dividends being paid irrespective of legitimate receipts.

Amidst the efforts put forth for the construction of railways in connection with the early lines, and the rise of new and rival companies, which made it expedient for those of an older date to endeavour to secure the advantages they already enjoyed by set- ting about planning branches in different directions, without any view, however, to a complete consentaneous system, may be distinguished as standing out from these multiform contests which led to irremediable sacrifices, the apparent evidences of a certain dual energy and power, exhibited on a gigantic and hitherto imparalleled scale, between tho eastern and western counties of England. The two grand branching routes of southern trunk-lines proceeding northward, after becoming in a manner interlocked in the great central belt, again emerge,

S TACTS, TAILURES, A>D FnATJDS.

by Preston on the one side and York on the other, to follow but remotely convergent courses, the western line taking the more natural route of traffic to and from Scotland, the other tending shoreways to the most northerly headland this side the Pirth of Porth, and thence striking directly for Edinburgh, thus briuging the south-eastern counties of England into con- nection and separate relation -prith all the more northerly points with which any extensive communication or direct trade is supported. The energy of the impelling power by which the extension of these linlis was promoted, is evidenced in the rapidity with which the new works were undertaken and executed. Now that resources have been more fully deve- loped, and the industrial and trading interests of cities, towns, and districts originally affected, have been, in the course of things, adjusted, it would seem to the casual observer that the construction of these lines was the mere realization of sagacious and wise views on the part of those who promoted them, when, in fact, a great majority owe their creation to the most extravagant deceptions and the wildest illusions — to financial speculation rather tlian to any intelligible appreciation of the practical bearings of railway undertakings. The modus operandi by which the " secondary foi'mation" was brought about may be thus explained : The old and rich lines became the trunk or stock of numerous offshoots, guaranteeing, on a certain rate of dividend, the shares on extensions or amal- gamations, thus securing for existing proprietors large profit on the issue of shares at par when at a premium in the market. Extensions at an end, or shares at par, no longer realizing a premium, the first proprietors in the original line left their suc- cessors to gather what they could from boughs stripped well nigh bare, and these again left their successors exposed to the full consequences of this successive addition to nominal capital, and to increased obligations.

Perhaps it may have proved advantngeous in the end to

FACTS, FATLUBES, AVD FBAUD3. 9

the general interests of society, that so much was left to be accomplished by financial dexterity, vague speculative antici- pations, and legislative enactments, which only confirmed existing illusions, instead of a more intelligent appreciation of the undertakings entered upon on the part of the public, and which would have had the effect, by limiting their numbers, of keeping England far in the rear of her present vantage ground. It is evident that a certain amount of inherent selfishness, the growth of too much isolation both of communities and indi- viduals, had to be overcome before these great channels of intercourse and traflic could be fairly opened, and the busi- ness appropriately fell into the hands of those who were chiefly concerned in obtaining an unfair advantage of the almost unrestricted powers conferred by Parliament, and the unguided and undisciplined enthusiasm of the public.

The principal individual who, in that almost Titanic period of warfare, struggle, and accomplishment, eminently distin- guished himself in connection with railway extension, was Mr. George Hudson. His ability was exhibited in pioneering new lines through every difficulty, in organizing fresh com- binations, and, where the materials were yielding, and unformed, adapting the parts of complex organization to one another, thus affording new vigour to undertakings that would have fallen short of their purpose, consolidating various inde- pendent enterprises, that separately might have worked the ruin of their projectors, and rendering available to practical purposes an enthusiasm that would have wasted itself in divided interests.

It was no wonder that the spirit of railway enti-rprise, kindling, after her first great successes, point after point throughout the kingdom, on touching with her magic wand the city of York, should have found men ready and willing to entertain the project of securing for that locality the advantages resulting from this means of transit. Of this number was

10 PACTS, PMLrEES, AXD FEAUDS.

Mr. George Hudson, ^vlio at the time was simply a member of the Board of Health, with no other position than that derived from a life of continued assiduity, and who as a linen-draper, had secured a moderate fortune, his family being respectable and ■well-established in the coxmty, having occupied for at least two centuries an estate at Howsham, Mr. Hudson had reached mature age, but he was to prove himself " the man for the occasion," and was destined to operate, with no inconsiderable influence, both in giving stability to those enterprises about beiug called into existence, and in making the most of the powers which Parliament, public confidence, enthusiasm, cre- dulity, or any of the thousand and one conflicting motives which came to support the movement. It was felt that the city of York, if true to her own interests, must bestir herself shortly in tlie matter, and to extend a railway into the "West Eiding appeared to be the most obvious mode of securing these facilities. Hudson had looked to the history, financial and otherwise, of the railways then in exist- ence, or forming, and was satisfied, from the first conception of of the idea, that a railway running out in that direction, if planned with moderate judgment, economically constructed, and efliciently managed, could not fail to succeed. The com- plex character of railway management, as compared with any other enterprise, only served as an additional motive with him to entertain the project. He was favourably situated, too, for secm-ing it public attention. In the municipal post to which he had been nominated, he had shown to his fellow- townsmen his capacity to appreciate the general interests of the city, as far as they related to that department, and execu- tive ability in carrying out improvements. Indeed, Mr. Hudson's reputation for public spirit and practical efficiency was slowly but surely rising. His name was already enrolled in the Book of Fate for the highest civic honour that York could bestow. It is possible that even to himself the golden mace

PACTS, rATLTTBES, A>*D rHAUDS. U

of the mayoralty may have floated distantly in dreams, but he could never have anticipated becoming " the almosrt irresponsible monarch over a thousand miles of railway," con- trolling the money-market of the kingdom, dispensing with a word, creating millions of capital by a single fiat, and much less that after receiving the homage of the titled and the great, and being obsequiously listened to as a member of the Legislature — Hebrew and Christian bankers even ac- knowledging by testimonials his superior potency — it was possible he could be "driven from the face of men," under the ban of public opinion, through revenge for wounded self- esteem on the idol it had so slavishly worshipped.

A public meeting was caUed by the promoters of the pro- jected railway in 1833, at which !RIr. Hudson was a prominent speaker. He dwelt on the advantage to be derived from the line, if carried out and completed, and adverted to the cheaper cost of construction and working which experience and skill rendered possible. This meeting was merely preparatory to others, at which the various features of the undertaking, as suggested, were vigorously canvassed; Mr. Hudson and his associates presently resolving themselves into a provisional committee, and diligently set about procuring all necessary information, and sustaining the requisite surveys. At one of these meet- ings, held towards the close of the year, IVIr. Hudson electri- fied his too apathetic auditors by subscribing to four or five hundred shares — an act considered the more venturesome, as the very route of the line was, as yet, a matter of conjecture. "When a route ofiering superior advantages to one which had been surveyed was suggested, Mr. Hudson himself set out to explore the neighbouring districts, so wholly had ho taken upon himself already the details of the enterprise. Advan- tage was taken by Mr. Hudson, on this occasion, to ascertain the feelings and learn the means of owners of property along the proposed route, and to conciliate them as far as possible.

12 FACTS, FAILUEES, A2fD FRAUDS.

He enlightened landoAvners as to the value to be thus added to their estates by the new means of access afforded their tenants to profitable markets, and with such success, that the opposition to the sale of the required sites rapidly disappeared, and the proprietors who had seen prospectively only the inva- sion of estates, and the destruction of immense masses of property in the inns and appurtenances of a great highway, became ardent supporters of the undertaking. It must be added that " the appeal persuasive," was not unfrequently the gift of certain shares in the line. Eeturning to York, he met all the objections that were urged on the score of expense, but there Avas abundant evidence to show that the public as a body was not yet fully prepared for the change.

From the consultations that had been held, the surveys that had been made, and the estimates that had been framed, the scheme began to assume a more tangible shape, and recourse was had to Mr. George Stephenson, who met the committee by appointment to confer with them as to the route, con- struction, and completion of the line. The contrast presented between George Stephenson and George Hudson, who now for the first time met together, was striking and impressive. Stephenson, at the head of his profession, engaged in subduing, by the aid of engineering science and the exercise of indo- mitable energy, all the material conditions involved in the exe- cution of the plans with which he was entrusted ; Hudson, sagaciously watchful of all the means by which an enterprise like that on hand might be rendered remunerative ; the one, in spirit, manner, and the general tone and flow of his discourse, exhibiting discipline, study, practice, and acquaintance with the difiiculties attending operations which others regarded in a financial light ; the other, personifying the moving power of every enterprise, by which those plans were vitalized — shares, loans, premiums, dividends. After glancing at the projects ■which had been, with no little enthusiasm submitted to him,

TACTS, FAILURES, AND FRAUDS. 18

Stephenson quietly laid the proposed plans aside, and described the lines of railway then in course of completion, or about being constructed, so far as they affected, or were likely to affect, the present enterprise, and advised some further delay until they could aiTange a more complete connection than was now possible with lines already in progress.

The committee accordingly deferred the execution of their scheme, and set themselves to study the progress of those out- branching lines to which Stephenson had referred them. The railways commenced in the south of England were seen, week by week, pushing further north. A watch, too, was kept on the neighbouring city of Leeds. Soon activity displayed itself at a point calculated to excite the most zealous emulation. A railway was about being constructed to run eastward from Leeds to Selby, there to meet the Hull and Selby, and thus not only securing for Leeds the traffic lying between it and the mouth of the Humber, but the advantages which Hudson had marked out for his own of a more close connection with the south of England. The serious entertainment of that project was taken as the signal of the Newcastle engineer, and no time was lost in applying for the necessary powers to enable York to connect with the North Midland, and thus to be brought, by means of existing lines, into direct communication with London. Several years had now elapsed from the origin of the scheme, but meanwhile public opinion had been enlightened, and though many were inclined to view the railway as unne- cessary, there was a spirit of co-operation abroad which augured well for its success.

In the year 1837 an Act of Incorporation was obtained for the York and North Midland Eailway Company. The pro- visional committee at once resolved themselves into a Board of Directors, and Mr. Hudson was unanimously elected Chairman. Mr. Hudson's antecedent efforts now began visibly to tell upon the enterprise. The land for the route was obtained at the

14 TACTS, FAILrKES, AND FEArCS.

average cost of £1750 per mile — a sum less by several thousand pounds than the average cost per mile that had been paid by the Korth Midland, with which the York line was designed to effect a junction. Mr. Hudson's powers of organization were never more happily brought into play than in the ease and rapidity with which all the preliminary arrangements for commencing the work of construction were brought into action. In this, as in other combined operations with which Mr. Hudson was connected, he displayed that activity which could only come from regarding himself as a joint of the great machine ; he laboured to fill up his individual part as assiduously as if the motion of every wheel, the effect of every spring, the success of the whole operation, depended upon him alone. The apathy of the people at York, in respect to the enterprise, had been far more difficult to surmount than any obstacle that now presented itself. No- thing, however, could exceed their joyful hilarity and festive mirth when the first sod was turned, and a gang of Irish labourers rushed upon the sward " to take up the shovel." It was a jubilee for every citizen of York of sound mind, tmanticipative of the horrors of change. With the same •view to economy which had suggested a personal examina- tion of a former proposed route, Mr. Hudson superintended as much as possible the construction of this line, and, as it approached completion, turned his attention to the provision of rolling stock, the working arrangements, and the classification of the business departments.

It was not so early in the history of railway enter- prise, but that he and others had seen the tendency of such undertakings to mismanagement, waste, and early annihi- lation of capital, and he made it his business both to super- vise the outlay and protect future resources. Meanwhile, Mr. Hudson had attained to the dignity of Lord Mayor of York. One of the most pleasiag duties devolving upon

TACTS, FAJLUBES, AXD FBAUBS. 15

him in the year of his mayoralty was the inauguration of the York and North Midland Eailway. The occasion was a proud and memorable one to those who had brought the enterprise thus far towards completion. In presence of a large assembly, Mr. Hudson dealt with dates, figures, and facts relating to it, and dilated with unaccustomed warmth on the prospective advantages of the work. It was not until 1840 that trains begun to run on the line. At the close of Mi. Hudson's ofificial year, which had thus been rendered so event- ful, his fellow-citizens, together with gentlemen and noblemen of the county, presented him with a superb testimonial, ex- pressive of their esteem and regard, not only for the honour- able discharge of his civic duties, but for the public services he had rendered in commencing, carrying on, and bringing to a completion the York and North Midland line. At the same time that this line was put in operation, the Hull and Selby was opened throughout, arriving at the point at which the Leeds and Selby might connect with it. These two lines, however, were subsequently acquired by the York and North Midland. Mr. Hudson had no sooner secured the execution of his cherished design of carrying a railroad out from York to the most advantageous point of communication with exist- ing and forming lines, than he applied himself to project under- takings which might conserve this 'vantage ground, part of his plan being to extend the existing line so as to anticipate the movements of other companies.

"W ith the view of commanding a further portion of trafBo to be drawn from the north-western districts of the country, he next obtained a grant of money for the survey of a route to Scarborough. Parliament at this time was by no means back- ward in authorizing the raising of capital iar beyond the necessary outlay — through shares or loans — and railway com- panies had already found that they could derive the greatest gain, and therefore had the greatest interest in endeavouring

IG PACTS. FAILrEES, AKD FEAUDS.

to bring neighbouring districts, by means of branches, ex- tensions, or amalgamations, within the range of markets, through funds raised on the credit of their revenues, which beyond a certain amount did not actually belong to them, if the new undertakings would not of themselves prove profitable investments- The desire to secure large sums by the issue of shares at high premiums, prevented any question as to the adequacy of the return, or as to whether the undertaking itself would pay, which was the only criterion which could be safely trusted in the employment of capital. Parliament certainly had no intention to give power to proprietors of railways to raise large sums to divide among themselves ; but, under the representations made, it was impossible to prevent a dispro- portionate amount of disposable capital flowing into new investments. Sir John Eennie, unskilled in those financial movements by which support was assured to an undertaking, whether it returned the money invested in it or not, bad failed in establishing a line between York and Scarborough. This much, however, had to be said in favour of such a line : It lay in the direction originally proposed, and, as Leeds was esta- blishing direct communication with Hull, it was not unreason- able for York to desire communication of its own with the western coast. Mr. Hudson saw that, in one form or other, it would be of benefit to