The Express.
London, England, 1849-04-09 00:00:00

• Market
Per stare. ynce. ?Atm.
S 8. P.r alum. l d.
151 100 •bares 28011 by Yr. Thula= it 211) C 237
343 4) „ CS 5 ... 598 10
31 st) „ 57 0 .. 55 .. 183 0
1874 13 ~ 99 23 10 21 .. 1183 0
Making a total excess, on these several classes of
shares, compared with the market price of the day, of
8,418/. 10s.
The difference between the price assigned by Mr.
Close to the 151 shares and the market price of the
day, and Mr. Plews's calculation, is no less than
W. 10s. per share. In the evidence given b fare no,
Mr. Close *scriber this difference to a mistake occa-
sioned by an erroneous combination on his part of
agates tikes from Mr. Plews's calculation, which
gave a resat of 241. 31. 6d. per share u the alue of
these shires, whilst the market price of the day was
ally 21/. per share, which, in point of fact, was the
Table assigned to them by Mr. Flews.
As a difference of opinion exists in the committee
respecting this exploitation, we leave it, without 00131-
meat, in the hands of the proprietors.
The number of these shares sold by Mr. Hudson to
the company being very considerable, the company,
in this part of the transaction, paid in excess of the
market price of the day, to the extent of 7,1851. This,
however, cannot be taken as the measure of the injury
to the company, inasmuch as the purchase of so large
a number of shares by Mr. Hudson, on his own ac-
count, doting the month of October, without any
question contributed to enhance the market price of
the 27th Oc'ober. Of this sum Mr. Hudson repaid
on the 19th February last 28741., ander the circum-
stances after stated.
We think it due to Mr. Hudson to append his state-
ment with respect to this transaction :
" In fixing the price which I thought in fairness I
ought to receive from the company, the price esti-
mated by Mr. Flews, and shown to me by Mr. Close,
was 241. 3s. Od. per share as a price at which it was
advantageous for the company to purchase; and I
then directed Mr. Mee to put them down to the
company at 231. 10s. per share, and I never discovered
that there was any error, or doubted that the transac-
tion W 11.4 perfectly correct, until Monday morning be-
fore the meeting, coming to York, I was looking at
the average price put in the statement, it struck me
that the average looked very high ; but ladore the
statement was sent out it was submitted to a meeting
of the board, and although some of the directors went
into the calculation% yet none of them made any re-
mark as to the high average of these shares. Upon
arriving in York I wont into Mr. Close's office, and I
stated to him that the average looked very high, and
asked of whom had been bought the largest number
of these shares. He referred to the books of the com-
pany, and stated they were principally bought of me.
I said. Then turn to see whet are the prices given
far the same description of shares to other parties,'
upon which, seeing that the shares taken of me were
at a higher price than those taken of other parties, I
said, ' I must pay the 11. call due upon them imme-
diately, and after the meeting you and I must go
carefully into that account, and we must have the
matter set right.'" Mr. Hodson accordingly drew a
cheque on his own bankers for 2,8741., which was
paid on the 19th February to the Great North of
England Railway account, being 1/. Foreshore remain-
ing uncalled on 2,874 151. shares.
Sir J. hn Simpson confirms this statement thus far :
He states " that be was present at the board meeting
of the directors on the 20th February last, and heard
Mr. Hudson say to Mr. Close, ' I am sad or I am
satisfied there is something wrong in these 151. thane;
we must look into it after the meeting.'"
"Stith the power Mr. Hudson possessed of giving
this explanation, it is to be regretted that he should
ham moved the adoption of the report, including the
Cheat North of England purchase account, by the
meeting of the 20th February, without making any
correction or noticing the existence of any error.
We have felt it our duty to endeavour to trace the
by Mr. Budge:sof all the shares included in
purchasesa e to the company, and to ascertain the dates of
the purchase and the prices at which they were
bought, which seemed to be important with reference
to the principle that Mr. Hudson must be considered
se having made those purchases in the character of a
trustee for the company ; this inquiry has to en at
tended with considerable difficulty, and has coca-
miessed delay in making our report. All these shares
seem to have been purchased by Mr. Hudson between
the &hot October and the 12th of November, 1846,
and sot at earlier dates, as was originally appre-
hended, and consequently Mr. Hudson's profit by the
transaction has not been so considerable as it was at
Ant believed to have been.
With respect to the payment to Mr. Hudson for
these shares by the company, we feel ourselves called
upon to observe that at the period when he received
the cheque for 81,1001. (the 2 • th of October, 1846), he
himself could not have paid more than about 25,000/.
cm account of tie purchase of these shares, although
he might be called upon to make a further payment
of about 70,000/. on the 30th of October. The
effect of this would be that the shares bought by Mr.
Hudson on his own account, and sold afterwards at

an enhanced price to the company, were to a con-
siderable extent paid for in the first instance
with the money he had received from the company.
The impropriety of such a transaction tetween en in-
dividual and a company towards which ho stands in
the relation of a trustee cannot be doubted. And we
are of opinion that the sum charged by Mr. Hudson
for these shares ought to be reduced to the sum he
actually paid for them, and the difference repaid with
interest.
It appears from the evidence of the other directors
that they were not aware of any purchase having
bun made by the company of Mr. Hudson. And the
auditors were ales ignorant of the fact, they having
contented themselves with an examination et the
books without ascertaining whether any original con-
tracts existed.
The next contract of importance is that of Mr.
Christian Aileen, amounting to 218,6691. 12s. On
comparing the prices of the shares included in this
contract with tte market prices of the day, viz., 19th
of December, 1816, we find the company has paid in
excess a sum of between 5,0001. and 6,0001.
The rest of the item.., composing the sum of
749,3241. 14.. 7d., have been carefully investigated,
and we have no comment to make on them.
The next matter which required our investigation
was the charge toe _brokerage, amounting to
2,4991. 7e. M. This sum is reduced to 1,6931.14..11d.
by deducting 805 i. 12.. 6d., erroneously glued under
the bead of brokerage, which was, in point of fact, a
payment for interest on bills of exchange which were
paid as part of the purchase money of the shares sold
by Mr. Allhusen to the company. Of the re •
gum, the earn of 990/. 18s. 9d. was a payment made
to Mr. Hudson for brokerage on the shares sold by
him to the company. This, according to the state-
ment of Mr. Close, was done on the assumption that
the company must have paid brokerage if they bad
bought those shares in the market, and without re-
ference to the consideration that Mr. Hudson must
have paid brokerage if he had sold his shares in the
market. This charge for brokerage cannot be justified
or maintained.
The next item is a charge by Mears. Laurence and
Co. of 6471. la. Id., which was paid to them, being the
fell rate of brokerage, although, in their origins' cos-
traota produced to us, they charged only half. We
find, however, they returned one half of this amount
to Mr. Hudson, who states he gave the order, as Asin
man of the York Union Back Company, and that be
paid to the bank the sum he so received. As all the
other brokers employed by the company have charged
only half brokerage, we do not consider there is any
reason, in this CM, why the company should sustain
a loss, and we are of opinion the gam so received
should be paid to the company.
The remaining item is that of Mr. Satterthwaite
who sold to Mr. Hudson a parcel of shares amounting
to 16,5001., and stamps 1001. making 16,6001., which
sum he was paid by Mr. Hudson himself. The par-
ticulars of this purchase, as entered in the books of
the company, are :
240 3dl. shares £16,462 10
S'aups
Coguaiselai

L 16,662 10
Width rum were repaid by the company to Mr.
godson as follows:

1847. _____ __ .
April 6
,362 10
May 12

£16,662 10
Being 621. 10a. in axone of the sum paid by him.
Aomading to the evidence of Mr. Hudson, he had
Inanncted Mr. Close to pay to his credit the sum of
1001. about that time for travelling expensed, and he
ooald only account in that manner for the mistake we
now point oat.