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Jointly with Great Northern.

Jointly with Great Northern and
Great Eastern.

Jointly with the North Eastern and
Lancashire and Yorkshire.

Jointly leased to the Midland, North
Western, and North London.

Jointly controlled by Midland and
London, Tilbury, and Southend.

Jointly worked, and shares largely
owned, by Midland and Great
Eastern.

Jointly owned with the North
Eastern.

Jointly with the London and North
Western, Caledonian, and Glas-
gow and South Western.

Jointly owned with Great Central.

Jointly owned with the London and
South Western.



From this very formidable list of engagements it will be seen that
the life of a Midland director must be a very active and busy one,
involving much railway travelling over long distances, as well as great
mental strain in dealing with matters of great complexity and im-
portance, which are constantly arising alike in regard to the Midland
system itself and its ever-growing traffic and the many lines in which
Midland money has been invested. Of course, the main responsibility,
as far as the Directorate is concerned, rests with the Chairman, and his
life is very largely absorbed, like that of the heads of the departments
and officials, in exercising that eternal vigilance by which alone the vast
interests of the Company can be safeguarded, and its efficiency, enter-
prise, and dividend-earning capacity maintained. When it is considered
that about ,4,000,000 per annum are distributed in dividends to
shareholders and debenture holders, and that of all the gross receipts
from all sources, amounting to about 11,000,000, no less than 61-02
per cent, is absorbed by the actual cost of working, the anxieties
and responsibilities of directors and officers of the Company are not
to be lightly regarded by any means. To illustrate the position and



LIST OF CHAIRMEN 263

bring the figures into the simplest form the relationship works out in
this way. Of every sovereign earned by the Midland Company the
shareholders receive the sum of &s. in dividend as interest on the
capital outlay, there being an expenditure of 12.?. for actual working
cost. This proportion of working expenses and dividend has always
engaged the greatest attention of the Directorate, as it constitutes the
vital point in management and is the ultimate test of the earning
capacity of the system. But in spite of the serious attention which
has been given to this subject by all railway companies, there has
been a constant tendency for a good many years for the proportion
of working expenses to increase on all systems, and the Midland has
been no exception to the general rule. The march of social progress,
increased wages, and shorter hours to servants, the increased cost of
coal, the increased cost of rolling stock, increased efficiency in working
the line, increased comfort and safety of passengers, increased cost of
the appliances, and the requirements connected with the collection
and distribution of traffic generally, together with the increased com-
petition and consequent less earning capacity per train mile these
are the main causes in distributing the balance of proportion in gross
earnings and working expenditure. Only a few years ago 50 per cent,
was regarded as a fair standard, when half the earnings were absorbed ;
but the Midland, of all companies, could not afford to be behind in
any scheme of progress either in regard to the comfort of its passengers,
the efficiency of its passenger and goods service, or in the material
comfort and well-being of its servants, upon whom so much depends.
Whether this growth of the working expenditure be continued or not,
the problem may safely be left to be successfully met and solved by
the determination and capacity of those having the control of the
system.

Those who have had the honour of presiding over the destinies of
the Midland Company, together with the dates of their appointment,
will be found in the following table :

LIST OF CHAIRMEN.

Name. Appointed. Retired.

George Hudson* . . May loth, 1844 . April I7th, 1849. Died

1871.

John Ellis . . . May yth, 1849 . March 3rd, 1858. Died

Oct. 26th, 1862.

George Byng Pagett . . Dec. 2nd, 1857 . Died Jan. 25th, 1858.

* Mr. Hudson having been previously nominated, became Chairman on May
loth, 1844, when the Company's Act received the Royal Assent.

t Mr. G. B. Paget, although elected December 2nd, 1857, was seized with sudden
illness, and died on January 25th, 1858, before he had attended a shareholders'
meeting, and Mr. John Ellis continued to perform the duties till March 3rd, 1858.



264 THE HISTORY OF THE MIDLAND RAILWAY

Name. Appointed. Retired.

Samuel Beale, M. P. . . March 3rd, 1858 . Oct. 5th, 1874. Continued

a director.

William E. Hutchinson . Oct. 5th, 1864 . Feb. i6th, 1870. Died

Dec. 6th, 1882.

William Philip Price, M.P. Feb. i6th, 1870 . May 2oth, 1873.

Edward Shipley Ellis . . May 2oth, 1873 Died Dec. 3rd, 1879.

Sir Matthew Wm. Thompson Dec. i6th, 1879 Dec. 2oth, 1890.

Sir Ernest Paget . . Jan. 2nd, 1891

The periods covered by the respective chairmen varied very much
not only in duration, but also in their permanent influence on the
position of the Company. Some of the directors had to hold the
helm of affairs during times of calm and steady progress, whilst others
had to steer a straight course during times of great stress and trial.
But none had to face more stormy or perilous times than Mr. George
Hudson the Railway King, or, as he was sometimes called, "The
Prophet of the Iron Road" the founder of the present Midland
Company, during the great railway mania which reached its culminating
point about the years 1845-6.

MR. GEORGE HUDSON was undoubtedly a most remarkable man, whose
name both for good and evil, it may be said, must for ever be associated
with the rise and progress of British railway enterprise. His rise from
the position of linen draper to Lord Mayor of York, and thence to the
unique position of Railway King was phenomenal, and forms one of the
most striking commercial romances of the century. His connection
with the Midland Company has been touched upon in dealing with the
progress and development of the Company's system ; but it would
be unpardonable and lamentable weakness to ignore or attempt to
ignore the great and beneficent part which George Hudson undoubtedly
played in combining, co-operating, amalgamating, and extending the
railway system of the kingdom, which has proved so beneficial to
the nation. But if his policy was sound and his great work was
of national value, if not of world-wide importance, as combining and
calling into being in a vast cohesive whole isolated companies and
short sections of line, and thus demonstrating in a practical way what
could then be accomplished, and thereby paving the way for the
greater events and the larger schemes of the succeeding generations,
it had also its terribly seamy side. During the railway mania, when
George Hudson was king by popular acclaim, when all the world stood
amazed at fortunes being made, as it were, without effort and as if by
magic, when obscure individuals became millionaires, it was little to be
wondered at that the erstwhile linen draper of York should "lose his
head," become dictatorial and somewhat violent, and certainly very



GEORGE HUDSON'S CAREER 265

irritable in his temper. He was interested in practically every railway
company (and there were many then) from London to Edinburgh. He
had called George Stephenson and his great engineering knowledge
to his aid ; he had determined the routes of lines of railway ; he had
negotiated with the owners of the land ; and had guided and fostered
his plans by means of shares, premiums, dividends, and many devices
whereby they might become remunerative. He was a great financial
genius undoubtedly, of whom much might be written ; but, unfortunately
for his reputation, the once faithful linen draper and Lord Mayor
of York was, after various dark rumours, found guilty by various
committees of investigation of offences involving great frauds. Power-
ful, he became dictatorial, and his efforts were directed to keeping his
co-directors in the dark. He was so much involved in various
companies and was so deeply concerned in manipulating them that
it was bound in the end to lead to jealousy and distrust. Hudson
had a wonderful capacity for calculations, and he had organising
abilities of a high order ; but his rapid rise to prominence excited
envy, and very broad rumours that his conduct was not above
suspicion spread and multiplied, and their confirmation was demanded
by inquiry. He had become a member of Parliament for Sunderland,
and by seductive and attractive utterances he paraded himself as
seeking only to promote the welfare of the country, and consequently
the seriousness and persistence of the allegations against him came
as a rude shock to the railway world. It was stated that his parlia-
mentary career was used for selfish purposes ; and in regard to some
of the companies with which he was associated, over-payments were
alleged, irregular entries were numerous, and there were errors in other
matters. Holders of railway stock became alarmed, the value of
railway property fell rapidly, and large sums of money were expended
with too lavish a hand in the execution of works. Committees
of investigation were demanded on every hand, and suspicion was
thoroughly aroused, and some very astounding and lamentable dis-
coveries were announced. Thus in connection with one railway he
was found to be indebted to the extent of ;ii,ooo in his payments on
the purchase account ; in another company he had used the company's
funds to pay for his shares, which he had taken in an assumed name.
By delaying the completion of the register of shareholders a fraudulent
increase in the number of shares issued was concealed from the share-
holders. He also appropriated shares upon which neither deposit nor
calls had been met, and upon which dividends were regularly paid.
He appropriated to his own purposes moneys which companies had
voted for the payment of land for the use of the company ; he bought



266 THE HISTORY OF THE MIDLAND RAILWAY

iron at a low price, and sold it to some of his companies at a great
profit; in fact, his frauds were scandalous, gigantic, and widespread.
Subsequently it is stated that Hudson tried to atone for some of his
misdeeds by voluntarily repaying some portion of the money which
he had misappropriated. He escaped a criminal prosecution, but
whereas only a year or two previously his acceptance of the chairman-
ship of a small railway company overjoyed the shareholders, the Railway
King passed out of the public view amid the execrations of all honest
men.

Such is the story of the first Chairman of the Midland Railway,
and such is his life as a whole ; but in regard to the Midland Railway
Company in particular, although there were suggestions that he was
not at all times quite loyal to their interests, it must be stated that
the committee of investigation on the Midland found that the accounts
had been faithfully kept, and that a strong and powerful directorate
had preserved the honour and reputation of the Company unsullied.
That this was so, a large measure of praise is due to Mr. John Ellis,
the hard-headed Quaker, who subsequently undertook the controlling
influence.

Mr. Hudson's fall was rapid and complete, for on April lyth, 1849,
he resigned the chairmanship of the Midland Company, and in less
than a month every vestige of control in every line in the kingdom had
passed out of his hands. He was no longer Railway King his name
had become a byword and a reproach. Hudson died in 1871.

In dealing with Mr. Hudson's career it has been urged that he was
drawn into a vortex by the gigantic speculations while the railway
mania lasted, and that he was a great railway genius, the value of
whose work has been very imperfectly appreciated. What that mania
was, and its far-reaching effects, is difficult to thoroughly appreciate
after the lapse of over half a century. The year 1845, for example,
was unparalleled in the history of railway enterprise. In the language
of a railway authority of the day, it may be stated that " the prominence
that has been given to railway affairs by the newspaper press and by
discussions in Parliament the extension of the railway system through-
out Great Britain, the continent of Europe, and North America
have convinced even the most prejudiced that railway communication
is the most rapid, safe, and economical that human ingenuity has yet
devised. This species of enterprise no longer appears to the public
as chimerical or too much in advance of the age to be worthy of
serious trial ; but merchants, manufacturers, wholesale dealers, traders,
and farmers are all becoming supporters of railway locomotion and
shareholders in existing or projected lines." In the construction of



THE RAILWAY MANIA 267

English railways it was argued "every shilling expended is a national
advantage. Not only does no capital leave the country, but no
money is locked up or sunk, as many foolish speakers and writers
have asserted. At the worst it is only a transfer of capital that can
be complained of; but that is not a national evil, for, like Lord
Bacon said truly, money was like muck, and did no good till it was
spread. Seeing the large amount of capital required to construct
the projected railways, many persons have said, ' Where is all the
money to come from?' But these and double the number could be
made with the greatest ease without the least addition to the circulating
medium of the country. When a Railway Act is obtained, the money
is not all wanted immediately, and therefore a surplus capital of a few
millions would suffice to intersect Great Britain with railways and to
supersede every common road. A manufacturer, for instance, holds
fifty shares in a new railway, and pays a call of 2 per share at
intervals of three months. When the call is paid up by all the
shareholders the directors disburse the amount for labour and con-
struction, which is again expended by the labourers for food and
raiment with the shopkeeper, who is thereby enabled to hand back
the amount in payment to the manufacturer, probably in time for the
next call ; and thus it goes on till the entire line is completed, during
which operation not one shilling capital is abstracted or lost to the
country. That some idea may be formed of the immense stimulus
the trade of the country would derive from the formation of these
public works, it is only necessary to state that were 2,000 miles of
the projected railways to be constructed it would give employment
to 500,000 labourers and 40,000 horses for the next four years. The
necessary buildings, sheds, and permanent way would cover 20,000
acres of land; and to lay a double line of rails would require
400,000 tons of iron." The Times, on Monday, November iyth, 1845,
printed a supplement containing a tabular statement of the "Railway
Interest of the United Kingdom," and which occupied five pages of
the paper. These made a total of " 1,263 railway companies, requiring
for construction a capital of ^5 6 3, 000,000." The Times, commenting
on this state of affairs, declared that this was a fact without a parallel
in the history of the world. "A widespread mania of rich and poor,
of idle and busy, an unprecedented mass of speculation, not the folly
or wickedness of a few, but the act of the entire nation." The huge
expenditure of the period was described as "capital sunk in earth-
works." In 1844 Railway Acts were passed for the construction of
2,841 miles of railway, and a very cautious estimate of the capital
expended and projected in 1845 is given in the following:



268 THE HISTORY OF THE MIDLAND RAILWAY

SUMMARY OF RAILWAY CAPITAL.



Capital expended in lines open . ... 70,327,264

Capital required for railways in course of construction 61,930,020
Capital required for English projected railways . . 427,720,000
Capital required for Irish projected railways . . 42,910,000
Capital required for projected foreign railways . . 98,223,333
Capital required for projected Colonial railways . . 29,775,000

Total . . 730,885,617

This table does not include new branches, deviations, and con-
necting links then proposed, and which, if carried into effect, would
have added at least a further sum of ^30,000,000 to the total.

The alarm created by the opponents of these schemes was such
that of the Bills projected only 561 were presented out of 1,263,
and the number was further reduced to 271, the number which
actually received the Royal Assent. Of these, 24 were for amalgama-
tions and purchase, 7 for new stations and enlargement, 131 for
branches to be constructed by old companies, and 109 for new lines
by new companies, the whole requiring a capital of over ^"100,000,000.
The total length of these lines was upwards of 4,700 miles (60 of
which was tunnelling), and over 55,000 acres of land were required for
their sites.

These were the surroundings in which Hudson was the moving spirit,
and the greatness of Hudson's railway genius only makes it all the
more lamentable that so great a man should have so deplorably fallen
and have been guilty of acts which resulted in ruin and universal
condemnation.

MR. JOHN ELLIS, M.P., of Belgrave, Leicester, in 1849 assumed the
chairmanship of the Midland, after having rendered very distinguished
services as Deputy Chairman from its inception, being the founder of
the Leicester and Swannington line. Mr. Ellis was essentially the man
for the hour, for he was an extremely strong and capable administrator,
and exactly suited for critical times when every railway company in the
kingdom required to repair the loss and restore the confidence so
seriously impaired by the railway mania and the cruel blows caused to
finance by the delinquencies of Hudson and others. Not only did
Mr. Ellis do this, but by a bold and sound policy he succeeded in greatly
expanding the ramifications of the Midland system by securing, almost
entirely by his own personal efforts, the Bristol and Birmingham line.
But for his promptitude this link would have passed into the hands of
the Great Western, which would not only have been a great loss to the
Midland, but would have brought up the broad-gauge system to




JOHN ELLIS

(Portrait in Shareholders' Room, showing the Glenfield Tunnel
and the Engine named "Buffalo").



JOHN ELLIS AS CHAIRMAN 271

Birmingham, and thereby have greatly hampered the interchange of
traffic, while the great through route which the Midland now hold from
Bristol and the west of England to Leeds, Manchester, and the north
would have been entirely lost to the Midland, and a considerable
portion of it at least would have reverted into the hands of rival com-
panies. Mr. Ellis, who at the time was Deputy Chairman of the
Midland Company and a director of the London and Birmingham, also
a director of the Leicester and Swannington lines, as well as the head
of the large coal firm of John Ellis and Sons, which he founded, gave
important evidence before the Royal Commission in November, 1845,
as to the great difficulties attending the transfer of traffic from the
broad to the narrow gauge and vice versa, and expressed the opinion
that the traffic of the country could have been much more conveniently
managed if the Great Western had not adopted the broad-gauge ; and
further, expressed " his perfect horror " of any interlacing of the broad
and narrow-gauge systems. His prompt action and the strong feeling
which Mr. Ellis entertained on this subject undoubtedly enabled the
Midland ultimately to secure the Bristol and Birmingham Railway as
part of their system. The soundness of Mr. Ellis's opinion in favour
of the narrow gauge is proved by the fact that the Great Western have
taken up the broad gauge and have relaid the line on the narrow system.
The period of Mr. Ellis's chairmanship extended from May yth, 1849,
to March 3rd, 1858, with the exception of a few weeks, when Mr. G. B.
Paget nominally held office, but was seized with illness and died. Mr.
Ellis held office long enough to see a great expansion of the Midland
system, when by the opening of the Leicester and Hitchin line the
Midland planted its foot in the great Metropolis, with its trains
running over the Great Northern system and landing its passengers at
King's Cross. Mr. Ellis had a fine personality, and his rule on the
Midland was marked by great prosperity. The very soul of integrity,
he had a bold and clear conception of the capabilities of the Midland
and its importance to the commerce of the nation, and he did much to
raise the administration of the Midland to that high level which has so
long distinguished it. He was member of Parliament for Leicester
Borough for a few years, being elected in 1848.

MR. SAMUEL BEALE, M.P., of Birmingham, took a very active part in
the formation of the Birmingham and Derby Junction Railway, and
became Chairman of that Company. He subsequently joined the
Midland Board of Directors at the time of the amalgamation, and
ultimately succeeded to the chair of the Midland on March 3rd, 1858.
He was connected with the well-known firm of solicitors at Birmingham,
and during his presidency the Midland Company made steady, solid



272 THE HISTORY OF THE MIDLAND RAILWAY

progress. When he retired, in October, 1864, on account of failing
health, he continued on the Directorate, and ^1,000 was placed at the
disposal of the Board, which was utilised for presenting Mr. Beale with
a service of plate, while in turn Mr. Beale gave a fine portrait of himself,
which forms one of the collection in the Board-room at Derby. During
Mr. Beale's chairmanship in 1864 the dividends reached the high-water
mark of 1 7^. 6d. per cent, for the year.

MR. WILLIAM EVANS HUTCHINSON, of Leicester, was another member
of the Society of Friends who presided over the fortunes of the
Midland. Succeeding to the chairmanship in October, 1864, he
brought with him a practical experience which is rare even among
chairmen of great railway companies. He was a Leicester citizen, and
began his career as a chemist and druggist in the main thoroughfare ;
but he, in 1839, forsook his chemist's shop in Gallowtree Gate and the
manufacture of pills and the preparation of medicines and entered on
a widely different sphere, namely that of Superintendent and Manager
of the Midland Counties Railway, a position which he had occupied
during the formation of the line according to the Act passed in 1836.
He undertook the great task and it showed great business capacity in
those early days of making all the arrangements for the opening and
working of the Midland Counties Railway in 1839. It was especially
gratifying to find that although Mr. Hutchinson was without practical
experience, the arrangements of the quiet, meditative little gentleman
were most successful; and in 1840, when he resigned this office, he was
voted ^500 in acknowledgment of the special services he had rendered
in the very difficult circumstances connected with the opening of a new
line, and he was elected on the Board of Directors. He was also
a director of the Leicester and Swannington, and he became one of
the members of the Board when the Midland was first constituted. He
was a man of few words, of great discernment, and he gave the best
years of his life to the service of the Midland Railway. He resigned
his chairmanship in February, 1870, but he continued on the Board till
his death on December 6th, 1882. He had thus served on the Midland
Directorate from its formation in May, 1844, to December, 1882, a long
period of 38^ years. He was the last of the original Board. During
Mr. Hutchinson's connection with the Midland he had witnessed many
fluctuations in the fortunes of the Company. He had seen the shares
of the Company quoted at more than ^"190, and he had seen them
quoted as low as $2 or ^33. He had seen the dividends at
^7 75. 6d. per cent., and he had seen them as low as 2 is. od.
per cent.

MR. WILLIAM PHILIP PRICE, M.P., Gloucester, who was appointed on



EDWARD SHIPLEY ELLIS



273



February i6th, 1870, resigned his presidency on May 2oth, 1873.
During his chairmanship several very important administrative reforms
were introduced, and notably the carrying of third-class passengers
by all trains. His abilities and his great knowledge of railway working,
linked to a calm judicial mind, marked him out as one of the most
capable railway leaders in the kingdom, and accordingly the Govern-
ment of the day offered him the position of one of the three commissions



Online LibraryClement Edwin StrettonThe history of the Midland railway → online text (page 23 of 36)