The Express.
London, England, 1849-07-14 00:00:00

are such as cell for the strongest reprobation. If the moist r
of shar. holders had bees mods up as it cwoht to have mom,
at the first inowdog of the NeweseOle aod 11,roick Colotenr.
in Amulet, 1845, such an tame moil nit h.ve rah, re Isl-ce
without at once exciting attehtlow But the register vas
rot /4 made up, although the sematary had honed an oi veto
tisement requiemg ail scrip to be sent in pei-o to that we. t-
mg, and ahutueolug that in the case of writs not Hut it.,
ate shares would be registered in the names of the *Kemal
al ot•em. The cesium& rased at the meeting that the di
rectors boa not hers oole to complete th ravager of shares,
sad the shareholders wore thus inducted to permit the seed-
ing of the floater to ba deferred mod the memitig
ing, in Motility, 18th. The secretary, when asked
why the rug stet was not made up at the me, tiro in
August, 184.3, stasis that he Woes the reason WS/
trust the whole of the shares +ere not then "moor am,l—a
reason which your committee fully believe, for it now am
pears that in the interval between that rueetit g sod the :cod
lowing hallyearly meeting in lett...toy, 1046, porta,. had
been pieced upon the rez ster as thereholiore who bed no
title to shares, by r. aeon it holding pay bloatell in the New-
castle aid Dar:imams or Newcastle and Berwick C inspany.
These additions were made ao an extent, sod invoking an
amount of more, which your committee hope and believe
to be without a parallel in the history of public 011Mptall1
and, according to the evideree, it wee done ewioly by the
chairmen aed secretary, uhkoown to the other ditehoors, as
stated by them, and certainly ai.heut easy minute, er all
atry A ary description, in the saute-Woke the c oniony.
The miheuce before your committee estahlishee ile‘e oct
that Mr. Buds hi hos taken Or his own use nom the New-
caole and Berwick Company the extreordinsty conifer co
10 891 shares—while the number to which the resoluiletis tf
the company ever which tie presided entitled him oats 937'
only. Of them 10,h91 marts, 2 906 wars obt theft he
before the meeting of August, 1845, while the shares we re
as yet strip, and when, as will be a.eu by the midi see, tau y
were soling at vI y large po cilium.. When the north of
Auguet al rood, Mr. Hudson had disp-sed lit all this 'trip—
it must be assumed at these large premium.—for acemollng
to the ocr. t.ey's evidence, all the milli come in for ri
lion in the names of other ramie., ,end out in the nom* at
Mr. Hudson. Your committee ea not i haracterise via ap-
propriation of rcrip by Mr. Ho Mon, on hit own
authority and for his own to., other th es a moss Hoe rata
abuse et the confide:ice reposed in him by the ohareholo,rs.
The mode in which Mr. liudfon aopropriated to hirroolf
the other 7,9'29 sh.res is equally reprehensible. The rt go.
ter of shares had not been sealed ..t the me, tiog In Atoust,
1°45. Mr. Ruction, however, (uolcueern to hie hr,a,r
director,) as stated by them, recite!:i d tl e aeretaey to urtr r
upon the register of the company toe nano s of req. a as
thareholoers whom he well knew could have no right to be
there. His own name was ins reed for cliff, reht boo
amounting in the whole to 5,181 sh air. The name. 01 It'
s licitore to tee company were plat, d en the regieter to
holders et 1,%46 Ammo when they were no: so in tact. Ti..-
sem o was dot.. to the extent of 816 et are 4 in the flame of Me,
Iludoin's London broke • 85 its the name of the B:•cret er)
of the company ;80 in the name of the then 1112,11setT cal th,
bank of wt ich Mr. Hudson was (+Litman; and 420 in the
name of the late Mr. Richard fiecholstio The committee
have it in evidence from the secretary, as well from the sold
citon, that these entries of shares in their names were read,
by Mr. Hudson's sole authority for his own prt tic ; and i
appears that ss Mr. Hudson effected oaks, he mot sir wrote
t the secretary to prepare certificates, which were made cu•
concurrently with the trai.efer of than ato the muchssers,
end the proceeds wire appropriated to his own use.
The committee have obtaito d evidence of the value of
shares in the market at the respective) periods when Mr.
Hudson was thus secretly carryirg on them operations, ono
they refer the shareholders to the qweatioos. It 'appears
front this evidence that the profits retailed by him oa thew
tronsactiohs must hate amour•td to 146,7011., if the sates
were effected at market prices.
Your committee have called upon Mr. Hudsn to explain
these trarsections, and the shorehelders will fern' their
ewe judgment upon the answers which his mi.:Rome
presents. Your committee can have no hesitatien in
expr.soing their opininn that the loilanstione, so far
as he has rendered any upon this subject, form as joss
t hcatiou whatever for the worse which he pun., d
Thh sutiscrapuon contract was executed by Mr. limism tor
8 000 shares under circumstances which leave no doubt of
the reason for its execution by him fir so large a bomber,
and show meat incontrovertibly th .t he must have awed we a
tru.tee for his brother stiareholdets. It cannot I. etappootti
that if the Newcastle cod Berwick DOI hao, loan loot, a• d
the expenses thrown up os the parties to the subecription
contract, Air. Hudson would have coomme d to beer the
proportion of Hants exothen which the holding of 8,000
shares would have cast upon him ; and, if such sons his in-
cantina, why did he out make a I,cata fide pw.ment of
12,0001. as the dep sit on tt.e 8,000 eoliths bele-crated tor i
On the question of respousibility, which i: is said
was incurred by Mr. Helms in the execution of
the subscription cataract, this committee have to observe
that he di I ho: consider at the time that he incurred -toy ;
for in one of his speethes tc the shereholJere in the New•
castle and Darlitigton Company, he oprealy stated that it
the bill were lust he shou'd recootrueno that the exoetises he
iletroa eel ary the Newcastle and Darlington Coninany. It
Mr. Hudson, huwevir, was entitled t. tithe 8,000 shares,
and as it is also urg,el the further hem of half a eltorc in re•
'met of each of the 8,000 shares, matte g in ill 12,00 d shares,
it wuuld fallow that Mr. Devito, the ...petty chairman, was
entitled to take 6,000 shares, and Mr. Richardson, Mr. Bath-
-11 use, Mr. Diseiswortb, and the late Mr. Nicheleon, each
1,000 ahar.e, making a total of 30,C00 shores, and thus leav-
ing for the b de of proprietors who were to have 37,600
shares, only 26,000 to divide amongst them. Mr. Dwies
and the other parties, however, who signed the deed on
the rime day, under precisely the same circumstances es
Mr. Hudson, have never pretended to any right a to. g out
of such execution of the deed by them, If Mr. H .dam OM.
tinkled to the shares, he ought to have taken the 8,000
shares for which he mooted the dee', and the 4,000 chariot
Hawing from them, openly end without any nectesity for his
wing the a islets of other parties to ea incest the room and
extent of his transactions. Beside., it the mot. executi. nof
the deed is to confer the tight up in Mr. 11 ad-oa to these
shares for hie own use, why has be not tuktii 24,275 share-
hooted of 10,b94; for it will he observed that after the pois-
ing of the act, and to . noble the solicitors to eutorce some of
iis provision., Mr. Hudson executed the deed for 16,27,i
shares in addition to the 8,000 on which he now claims; and
it appears to your committee that he might with equel
son have token the whole.
The committee direct attention to the mid. rce of the
other directors respecting them large allotments of ehsr,'s.
While it is clear that Mr. Hudson bas done whatever he has
,houvht proper in managing ant controlling the effairs of
the company, your committee cannot too strongly demo cote
the utter want of attention to the company's inter: set, which
is indicated by the disclaimer of the direntors of all know-
ledge of these important matters. Your committee would
have tip, ttet to find the director• holy acquainted with all
allotments of shares, and that each alliement would hnve
Monett the sul jot, of a distinct ho.od minute. The other
directors have received, in addition to the ordinary remu-
neration of 2,5001. per annum divided betwixt them awl
Mr. Hudson for the management of the compahy's attain, an
allotment of 100 elates cacti, a number which your committee.
without approving of the practice, believe the sharehoidert
would not hove cowidered t» large, a though these iii.rrs
re.cche4 high premiums, if there had h-en even ordi tary
attention on their part to the company's affairs, but y
committee cannot close this portion of their report wiolout
recording their opinion that there has been, on the pert of
the directors, the most culpable n. elect, otherwise Mr.
Hudson never could have acted as he has done.
Your committee recomputed that Mr. 111;4mo be required
to account ti the company, without delay, for the profit he
has deriv,,d on the appropriation of chars to which he was
not entitled, and that the company take such measures as
they may be advised, to compel a restitution of these ma
nest. Mr. Hudson has stated, but without offering any
evidence of the tact, that some of these shares were pi emoted
by him to other parties having valid claims on the core piny
for services rendered. In so far as this can be estah'islied,
there can be no difficulty in giving effect to such cases, if
Mr. Hudson mutest° refund the profits on the other therm
As to the allotment, of the York and Newcastle extension
shares, No. I.—Thcs, shares were created by a rotolution cf
the ohm holders' at their halfeyemy meeting,, head
as the 16th of January, 1846, at which it was
resolved, that scrip should be issued for an 10;ii,i
capital of 1,600,000/., in shares of 251. each ; ' 500 of
such shares to be allotted rateably to the proprietors cute Olt
the regi-try of this company, and the remsicder left at the
disposal of the directors."
Oat of this ism. of shares it will be observed from the evi-
dence that Mr. Hudson, after having taken the promotion to
which he was entitled in respect of his holding Newootte
and Darlington and Brandling Junction shares, also wok 590
additional soars a in his own name and ti e name • of other per-
sons. One of the parties, Mr. B. T. Wilkinson, in whose name
200 of such shares were issued, was the then manager of the
Union Bank end another, Mr. Richard Pearson, in whose
name 50 of such shares were issued, was a clerk in the same
hank. The aftraegate premium of these 690 additional
there, would amount, at the time they were taken, to about
4,0001. Your committtee consider that Mr. Hudson had no
right to make any such appropriation of shares to himself,
looter only authority given by the resolution of the share-
holders, and that he ought now to amount to the company
for the value of tt e shares at the time when he took them.
While reporting upon this issue of shares, your committee
must also call attention to the fact, that altonogh the 200
certificates were issued in the name of Mr. Wilkinson. as
long ago as February, 1847, and were sold by Mr. Hudson.
in April of 1847, neither the deposit nor calls mom •hem
seams, had been paid by him, until after the investigation of
your committee had commenced, And even then he paid no
interest on 300 out of the 590 shares, although the purchasers
of them had been in the meantime receiving disidends wery
half year out of the funds of the company, as if the deposit
aid c ills had been regularly paid wh-n they become due.
B-sirs the 590 %harm taken by Mr. Hudson, your eons•
mittee find that each of the other directors took 100 of thee.,
eversmon >hues beyond what they were entitled to, sr 01
which at the time of the anotmett were of the value of 0, 'rye
premium to each director. Your committee consider that
he other directors had no right to make Ode adpropr alien
of shares to themselves, under any authotity given 'ay the
resolution of the shoreholders ; but although Dee coot.
mittee strongly disapprove of all such indirect
mote% of paying directors for their services, since the
transsetions have taken place, and do not im Ave a feces
amount of less to the company, they do not site*,
eny pro-
c.odioge to be taken, hut that Mr. Hudson tooiso'ol he pot on
a f setting of equality with the other dime'," by being al-
lowed toe benefit of an allotment of 100 owe,.
root committee find that 9,692 '.„l this clan of shirrs, re-
main
to this day unoppropriated. If they had been sold for
the behelit of the company, 'they would have produmei a
profit of 'bolt 100,0001., hP,:c although extensive sales have
h..r.„made from time to *:eine by the chairman, for his own
minute no such Wes .aye ever been made for the beneht of
,
the shwehoiders. gee committee eassosiss that the Melo-