The Sun.
London, England, 1849-04-12 00:00:00

feel it is difficult to do so in a way that shall make it
easily intelligible to those not conversant with the mode
of conducting the business of the Stock Exchange. It
is first necessary to inform this committee that the
members of the Stock Exchange are divided into two
classes, viz , of brukers and dealers, the former only re-
presenting the public as agents on their behalf.
The broker, on receiving instructions from his prin-
cipal to buy or sell, addresses himself to the dealer,
and simply mentions the number of shares or
amount of stock in which he has to deal, without
informing him whether he be a buyer or seller; the
dealer then names two prices, at the former of which he
will engage to buy, and at the latter to sell the quantity
proposed; in this case, in all probability, the prices
named would have been 21 to 21i. As the broker thus
has the option to buy or sell afforded to him, the dealer
clearly could no longer be considered as an optative, he
might, indeed, be a reluctant buyer or seller; clearly,
therefore, a purchase by a dealer could not be taken as
a measure of intrinsic value, but only of the market
value as determined by the proportion of supply, to de-
mand.

Mr. Love—ls it your opinion that the directors of this
company would have exercised a wise discretion in se-
lecting the 151. shares, in which to invest the money
raised by the Great North of England Purchase shares?
—Most assuredly; I think they could not have made a
better application of their funds if invested at the ordi-
nary average price which had prevailed previous to the
month of October, 1846, and which has subsequently pre-
vailed.

Mr. Love—State to this Committee the grounds on
which you arrive at this conclusion. We invariably find
that shares not paid in full, from their liability to further
calls, are considerably below their relative value as com-
pared with other description of shares in the same com-
pany, which are paid in full; and in this case, that dis-
proportion would have been further aggravated
by the fact, that as the dividend was nearly
nominal (for two years only one shilling and
sixpence per share) the advantages were prospective,
operating rather as a deferred than a present annuity,
and, while this circumstance would operate with the
public, to make these shares unpopular as an invest-
ment, to the company it would operate as an advantage,
inasmuch as a small instalment only being called, the
same money would have extinguished a larger propor-
tion of the Great North of England stock, and that at
a considerable lower price than the 1001. shares.
Ur. Love—Was this 1, priori inference subsequently
borne out by fact?—lt was; from July 27, 1846, when
the Great North of England Purchase Act received the
Royal assent, to September 30, the average and nearly
uniform price was 17+ premium or 18/ per share,
which was, in fact, the price marked on Sept. 30.
Mr. Love—And is it your opinion that any consider-
able number of these shares might have been procured
at about this average price?—l think they might, if the
purchase had been spread over a period of some months,
waiting in fact until the shares came to market.
Mr. Love—Do you remember the state of the market
for. Great North of England 151. shares in the month
of October, 1846?-4 remember it well: a sudden rise
took place in them.
Mr. Love—What emotion did this excite on the Stock
Exchatige?—At first that of intense surprise: the gene-
ral law I before referred to appeared reversed, and in-
stead of being cheaper, as had always hitherto been the
case with reference to the 1001. shares paid in full, they
suddenly became dearer, and then observing that the
purchasers followed each other, day by day with unusual
rapidity, the emotion of surprise yielded to that of sus-
picion as to the motives of the principals ordering such
purchases.
Mr. Love—Had you any means subsequently of know-
ing into what names the shares then bought were trans-
ferred ?—I had; the names given on the following settling
days into which the shares were ordered to be transferred
were some Joseph Lawrence, others Philip Cazenove,
and others Richard Nicholson; names we have subse-
quently learnt to identify as trustees for Mr. Hudson.
Mr. Love—The stimulus of such purchases having
ceased, did the shares fall back to their former level?—
By degrees they did. In November and December, 1846,
they receded to an average of 181. 6s. Bd. premium;
January to June, 1847, to 17k premium; August to
December, 1847, to an average of 151. 18s. 6d. premium,
the average of 1848 being 16+ premium; but a strong fact
is the present price two years and a halflater, within three
months of commencing 10 per cent. dividend, and 15
months of being paid off at 22} premium, the price is
only 19 premium, and the company have recently made
purchases at this price; and, indeed. in every description
of shares the same fact is apparent, that in each the
prices are lower than the company was charged in 1846.
Mr. Shield—Did not all the other shares of the Great
North of England Railway Company fall in price during
the interval you mention as well as the 151. shares?—
Yes.
Mr. Shield—Did not shares of other railways fall in
price during the interval you mention, as well as the
shares of the Great North of England Railway ?
Having referred to the authorised lists, I exhibit in a
tabular form the relative fluctuations of fire descriptions
of shares :
Great North London and York York and
of Great N orth and North
1846. England. Western. Western. Newcastle. Midland.
Nov. 1....237 per sh. 51 prm. 199 per sh. 18 prm. 96 per sh.
Dec. 1 ....236 „ 45 „ 194 „ 13 „ 92 „
1847. _ _

jan.l •••.238 „ 48 „ 19G ~ 13% „ 94 „
Feb 1 ... 237 „ 39 „ 19313 „ 12 „ 91 „
March 1 ..233 „ 35 „ 187 „ 12 „ 86ig „

..---- - - - -- „
Aprll 1....231 „ 30 „ 176 „ `A :, 84— ~
May 1 —.231 „ 29 „ 174 „ 9Y,) •, 824 ~
June 1....230%.„ 29 „ 179 „ 13 „ 85 „
July 1 ....237! ~ 3G „ 183 „ 13% BB ,•
Aug. 1•- • - 236 ~ 29 „ 175 „ 12 , 85 „
Sept. 1•• •.230 „ 21 „ 166 „ 10 „ 77 „
Oct. 1 —.224 „ 14 „ 154 „ 10% „ 72 „
Nov. 1—.217% „ 7 „ 149 „ 9 ~ 70 ~
Dec.4l ....225 „ 16 „ 156 „ 9 „ 76 „

1848.
July 31 ..281 „ 3 disc. 121% „ 7 It 66 Of
Dec. 1...•228 „ 11 ~ 124 „ 33 „ 54 „

Mr. Shield—Does not the tabular statement prove
that the fall in shares of the London and North-Western
the York, Newcastle, and Berwick, and the York and
North Midland Railways, was very much greater in pro
portion than the fall of the shares of the Great North
of England Railway?—Most certainly yes.
Mr. Love—ls it possible to conceive that the Great
North of England Railway shares could fall in the same
proportion as the other rail ways referred to, as the one has
a guaranteed dividend of 10 per cent., and the others are
liable to all the fluctuations arising from an uncertain re-
venue, and also from the circumstance of all their capital
accounts remaining unclosed?—As a general principle
I should have inferred such would have been the case,
and the fact justifies the conclusion. _

Mr. Shield—From the tabular statement does it not
appear that during the interval before mentioned, Great
Western Shares fell from 51 premium to 11 discount;
London and North-Western from 199 to 124; York,
Newcastle, and Berwick, 18 premium to 3} premium;
York and North Midland from 96 to 54 per share; and
that Great North of England only fell from 237 to 228?
—Of course from a reference to that statement, such
appears to be the case.
Mr. Clayton—On the 25th August, 1816, were the
151. shares sold at 19/. per shire?—Yes; at 191. per
share, or 17f premium.
Mr. Shield—Did you, between the 16th and 19th Oc-
tober, 1846, purchase fifty 151. shares at 20 premium, or
21i per share?—Yes, I did.
Mr. Clayton—Would you be so good as to tell me the
average price of the 15h shares for November, 1846?—
There were but five transactions during the month, the
average being 20; per share or 19} premium.
Mr. Clayton—Did not an advance take place on the
151. shares upon the passing of the Great North of Eng-
land Purchase Act, 27th July, 1846?—The price on July
Ist was 17t per share, or 16} premium; and on the 31st,
18i per share, or 17 premium; and this price continued
to prevail during August irnd September.
TUESDAY, MARCH 20.

. Mr. CLosE's Re-examination resumed.

Mr. Love—When was the purchase of the shares
bought of Mr. Hudson, amounting to 131,8671.95. 3d. en-
tered in the company's books?—ln the month of January,
1849.
Mr. Love—Never before?—No.

Mr. Lore—Was the 131,8674 9s. 3d. which was paid
to Mr. Hudson, paid to him on the memorandum you
exhibited to the committee some days ago as the contract
or calculation made of shares sold by Mr. Hudson ?—I
had no other document.

Mr. Love—Did you ask the opinion of the directors as
to the propriety of paying the commission charged by
Mr. Hudson?—l did not.

Mr. Love—On what terms do you transact your basi-
l:less with the York Union Banking Company, more
immediately in reference to the Great North of Eng-
land account?—To the 30th June, 1847, the York Union
Banking Company charged us with no commission, and
allowed interest at 24 per cent. Since then, and up to
this time, they have charged commission, and allowed 5
per cent.
Mr. Love—You speak of commission. What com-
mission ?—Usual commission, which I find on refer-
ence to be 1 per cent. on all sums paid by them on
account of the company, whether in York, London, or
elsewhere.
Mr. Love—lf payments are made to the railway corn-
pany by them, of bills not having two months to run, do
they debit you as ottah fur them, or when they become
due?—As cash.
Mr. Love—lf bills be of a longer date, do they allow '
discount on them if taken as cash? —They do.
THURSDAY, MARCH 22.
Mr. Gaoaan HUDSON'S Re-examination resumed.
Mr. Love—We have written again to Messrs. Lau-
rence, Caienove, and Co:, a copy of which I have just
read. Their answer by telegraph is, "We wrote last
night to Mr. Hudson." May we ask what exculte they
make for withholding the information of whom you had
bought 200 Clreat North of England 15/. shares, and of
whom, at what price, and when the 842 401. shares
were bought l—The answer I have received from
tte a We Cannot very well give up the informs-
tion, as they are both done direct with principals of
our own."
Mr. Love—What aro we to understand by both?-
342 401. shares, and 200 la. shares, the latter bought
itith tictobef, ,t 646.
Mr. tole—Are we to understand all tbe 'information
redving the sale by you to the company of 34.2 40/.
shares is to he Withheldt—The iiiforttiatidn I glt.ealvse,
they were purchased by me at 551. pre.mium. bale
they
means of giving the name of the principal.
r. Shield—ls it not ar of the
of
that a principal can demandule
the namepriceatipdaol n?
—I am not aware of it. ebduattelowf
o yourl
would`
Mr. Love—Can you suppsly?..n with th
purchase of 342 401. share cannot;
add that before I became the purchaser of these shares.
I had, neither directly nor indirectly, any interest in
those shares.
Mr. Love—They appear to have been transferred at
various dates to Mr. Cazenove; we are still to understand
they were bought at one time ?—They were.
Mr. Love—Can you furnish us with any information
as to the parties of whom you bought the remaining
600 SliNVlai KW, I 0613/40 i %bey were *gilt of