The Sun.
London, England, 1848-10-28 00:00:00

MIDLAND RAILWAY
Newby Park, Oct. 24, 1848.
behalf of the Directors of the Midland Railway Com-
pany, I am requested to acknowledge the receipt of an Address from
a number of Shareholders resident in Liverpool and the neighbour-
hood which you have transmitted to them.
The Directors would have been content merely to acknowledge
the receipt of the Address, had it not contained an imputation upon
them, which they cannot pass over in silence. The Shareholders
commence their address by ascribing the depression of their pro-
perty to " the want of public confidence in the integrity of the ma-
nagement." The Directors, therefore, desire that you will immedi-
ately furnish them with a list of the specific charges involved in this
statement, in order that they may convene a Special Meeting of the
Company, and have the opportunity of refuting the accusation thus
brought against the integrity of a body of gentlemen who feel that
they stand as high in the estimation of the public at large as the in-
dividuals who have appended their names to this calumnious docu-
ment, which comes with a peculiarly bad grace from a bo ly of Share-
holders who, prior to the appointment of the present Directors, were
only receiving a two-and-a-half per cent. dividend. Since that time
the dividends have been increased to six and seven per cent.
In the meantime I may be allowed to offer to you, as one of the
Shareholders who have signed the address, a few remarks upon the
several suggestions contained in it.
1. You call upon the Directors to close the capital account. No
person is more fully aware than yourself that the shareholders have
had the power of passing a vote to that effect at any half-yearly
meeting. But supposing the development of a new traffic, producing
a revenue of 20,000/. or 30,000/. per annum, should require an out-
lay of 60,0001., how absurd it would be to say that such outlay ought
to be taken out of income.
2. You call upon the Directors to examine and pay all outstanding
accounts of:the solicitors. These accounts are now undergoing a strict
examination, and as soon as the solicitors are satisfied to accept the
amount the Directors think due to them, their bills will be paid.
But surely this is a matter which must be left to the discretion o-
the Directors ; had they given way to the pressure of the Pro-
prietors when they were urged to settle the demands of the contrac-
tors, they might have sacrificed a very large sum for the sake of an
Immediate settlement. They succeeded in making great reductions,
and so much was saved to the Company. The claims of the con-
tractors amounted to 89,577/., and were finally liquidated for
17,7231. 15s. 7d. Your objection to any further Parliamentary ex-
penses being incurred, without the sanction of the Shareholders, is
futi,e ; it is clear that no Parliamentary expenses of any importance
can be incurred without such sanction.
3. You call for a reduction of the salaries of our engineers. We
have only one engineer employed upon the lines, and, considering
the abilities of that gentleman, the Directors do not think him over-
paid.
4. You require that stations shall not be enlarged. Should traffic
increase, how is it to be conducted without increased accommoda-
tion? If the Shareholders think the Directors incompetent to decide
upon matters of this kind, they had much better remove them, and
appoint others in whom they have greater confidence.
IL The Directors are called upon to enter into no further contracts.
It must have escaped your recollection that at the last halt-yearly
meeting I gave an assurance that the Directors did not intend to
engage in any further contracts.
6. You allude to traffic which you do not consider remunerative to
the Company. The Directors are entitled to ask you to be more
explicit, and to state specifically what traffic is meant.
7. You think the number of trains ought to be reduced. This is a
question which must-be left to the judgment .of the Directors ; for
nothing can be more difficult than to determine, from time to time,
what Veins ought to be run. I consider it would be an unwise and
Impolitic measure to take off the express train, which you suggest
should be flOne.
• 8. The alteration you propose in the mode of appointing Directors
'Would require a new Act of Parliament.
9. Yon ask the Difectors to purchase all stores by public contract.
I have no doubt you aro aware that this is generally done, but it not
unfrequently happens that the Directors can purchase articles in the
market much below the contract price, and when they can do so they
often avail themselves of the opportunity.
I have now answered or commented upon every point of the ad-
dress, except that which relates to the depreciation of the value of
shares, with which the Directors feel that they have little or nothing
to do. Their duty is to obtain all the traffic they can, and to pay
the Shareholders good dividends.
The address you have sent is signed by seventy Shareholders, this
is a small proportion of the en.ire number. which exceeds 8,000.
You are a holder of capital stock in the company to the amount of
3801., and you describe yourself in the address as a broker. From
your experience in that business, I have no doubt you are well stile
to inform the public how the old railway stock of this company has
become so much depreciated.
In my position as Chairman of several railway companies, I have
received numerous complaining letters, all, I am bound •to say,
crouched In a courteous and respectful manner; and I have answered
them by assuring the parties of the soundness and stability of the
concerns over which I preside. The acknowledgments I have re-
ceived in reply have been generally satisfactory; many of the parties
stating that they were holders of stock in a variety of foreign and
other new lines, and that they were compelled to sell the stock of
old lines to pay for the new. When the supply exceeds the demand,
and when a regular combination exists to depress railway property,
I believe any course which Directors may pursue will be of little
avail. Yet,' after all, the amount of stock transferred in the com-
panies over which I preside has been less than usual, which shows
that many of the quotations of sales, are merely nominal. I have
no fear of not seeing railway property again placed in a better
position in the market, though not at the extravagant price it has
heretofore arrived at, and then Its proper and true value
will be maintained in a manner that will be more satis-
factory to all parties. Consols have been at 47, they are now at
84%, and have been at 100. If yon or your friends can, by any
affort, advance them to 92 or 93, I have no doubt you will see a
great advance in railway property. The Bank Stock has paid 10
per cent., and is now only paying seven, and the price has fallen con-
siderably ; but no one ever doubted the integrity of the management
of the Bank. The surprise to me is, that in the excitements and
commotion which havo prevailed, railway traffic has been so well
supported. Even the present amount of traffic justifies the anticipa-
tion that the rate of dividends will not undergo any material dimi-
nution ; and this remark applies to all the lines over which I have
the honour to preside. I wish I could call the serious and grave
attention of the chairman of the London Stock Exchange to a pub-
lication which is issued weekly, professing to be under the sanction
of that body. lam aware that the statements which appear in that
Paper are stated not to be published under the authority of the Stock
Exchange ; but I mallet close my eyes to the effect that they pro-
duce an the mind of the public, who naturally consider that they
have that sanction. If these statements were correct and true, no
person would have a right to complain —but when they are
almost in every instance incorrect, and their general ten-
dency is to depreciate railway property, it would be well
that the Stock Exchange should disavow a publication
which is calculated to do so much mischief. I must, in con-
clusion, request that you will call the Requisitionists together, and
that there may be no delay in sending a list of the charges im-
pugning the integrity of the Directors, who are anxious to meet and
repel the calumnious imputations that have been made against
them. Nothing but a sense of duty to the large body of Share-
holders who have hitherto given their confidence induces the Di-
rectors to retain their seat at the Board; and as soon as that cen-
t/deuce is withdrawn they will most readily and gladly resign their
trust into ether hands by whom the affairs of the Company may be
More ably conducted,
I perhaps might observe, before' I conclude my letter, without
pledging myself to the statement, but merely giving it as my own
individual opinion, that I believe another 51. call upon the 50/.
Shares, with the arrears of calls now owing, will complete all the
works in course of construction, and the remaining 251, per Share
will remain applicable to the liquidation of the debt. The liabilities
of the Company are under the consideration of the Directors, in
Order to enable them to lay a statement before the Proprietors;
Which it is anticipated will be done within a very early period.
I am, Sir, your obedient servant,
GEORGE HUDSON.
To J. Houghton Braaeker, Esq., Liverpool.