The Railway King
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What's the story?
The railways came to England in 1827 with the opening of the Stockton to Darlington railway line. Over the next 20 or so years railway mania swept across England with people clamouring to invest in a system that, at the time, seemed like a licence to print money. George Hudson, a York man, was more determined than most to join the stamped, he became known as the Railway King.
A new job for an orphan boy
On the 10th of March 1800 in the little village of Hawsham 10 miles from York, Mr and Ms Hudson were celebrating the birth of a healthy baby boy, no mean feat in those days.
The Hudson's were not rich but they were not poor either. Young George had been born lucky but he didn't stay lucky for long. By the time he was eight years old both of his parents had died. George's brother took to caring for George; unfortunately he took to the bottle too. Not to worry George had other brothers and sisters who could help him and he got by, but from now on George would have to make his own luck in the world and he was willing to try very hard to succeed. Aged 15 George travelled the 10 miles from his little village to the city of York.
The apprentice gets a partner via the prettiest church in York
York Minster towers over a street called College Street, College Street gets its name from St William's College. St William's College is a timber framed building that dates back to medieval times and is one of the most photographed buildings in York. Just a few doors down College Street is an olde worlde shop run by the National Trust. If you read the green plaque on the wall of this little shop, you'll discover that this is the shop where George Hudson, the Railway King, served his apprenticeship as a draper when he first came to York as a teenager.
George had little formal education but he was good at sums and will have been an asset to Nicholson and Bell's Draper's shop. Brother and sister, Richard and Elizabeth Nicholson took a shine to young George. Elizabeth it seems took a special shine to George, for, on 15 July 1821 the happy couple were married in Holy Trinity church Goodramgate, a tiny medieval church just a short walk from the shop where they lived and worked. (by the way the church interior is still pretty much as it was in Georges day, well worth a look)
Things were looking up for George. He liked being a draper but fate was about to intervene in a big way.
A Great Uncles Great Fortune
Just a short walk down the road from the shop where George and his wife worked is a street called Monkgate and at no 44 lived Gorge's great-uncle Matthew Bottril, Matthew was one of the richest men in York. George and Elizabeth were not the most likely people to inherit great-uncles fortune but they did live just a few hundred yards away and so when Matthew died on 25 May 1827, George inherited £30,000. They moved from the tiny shop to Matthew Bottril's house.
Money made George happy for a long time but in later life he said, "The happiest part of my life was when I stood behind the counter in my own shop… My ruin was having a fortune left to me".
"I am Only a Tool in the Hands of a Genius"
(The genius George was talking about was George Stephenson) George Hudson was now one of the richest men in York but the way he used his riches would open the flood gates to a tidal wave of prosperity for thousands of people, George included.
George Hudson found himself living at a time when railway mania was sweeping across England. People thought you couldn't loose by investing in the railway network that was revolutionising transport making it possible to move people and goods around the country in volumes and at speeds that were previously unimagined.
George saw that cheaper coal could be brought to York; all that was needed was a railway line between Leeds and York. To George this was an ocean of opportunity and he jumped in with both feet, and his bag of money.
On 30 Dec 1833 a meeting was held at Mrs Tomlinson's hotel in Low Petergate York of the York railway commute and George Hudson was to be treasurer.
"York will be the Heart of our Railway"
The York railway committee was the beginning of an incredibly successful career for Hudson. At the height of his powers, Hudson was to control almost one third of England's railways, ranging from Rugby to Newcastle.
York railway committee member James Meek declared "London will be the head of our railway Edinburgh the feet and York the heart" and so it was.
"Phoo, Phoo, we don't mind principle in matters of business"
(That's what the Railway King thought of keeping accounts)
George Hudson had a great vision in life, to cover England with a joined up railway network instead of the unconnected railways that were springing up everywhere. He worked tirelessly to encourage investors to provide the money for his railway companies, often in partnership with George Stephenson, Amalgamating smaller railways to make bigger more useful networks made Hudson lots of money. Unfortunately George didn't think keeping the accounts was as important as getting results, this was a big mistake even for the Railway King.Hudson is often misquoted as saying "Mek all't railways come ta York". He probably never said this; in fact he tried hard to prevent his rivals building lines that would compete with his.
London Calling
On the 14th of August 1845 George Hudson was elected MP for Sunderland, he had been involved in business there and the people of Sunderland thought that having the Railway King for their MP would be an improvement on the one they had already.
So Mrs Hudson and their four children followed George to London. Hudson was now not only one of the richest men in York but one of the richest and most important men in England.
The Hudson's bought a house called Albert Gate, at the time it was one of the biggest private houses in London. George loved his time in London, he liked to show off and flaunt his wealth and unfortunately he also loved to drink too much.
Too Grand for the Rocket Man
George Stephenson said Hudson had grown too grand for him George Hudson was now very very rich and as the undisputed Railway King he had power over many thousands of employees and share holders. No ordinary man could have done so much and George Hudson was no ordinary man, he was…
"Hard working, unscrupulous, quick-witted, rude, confident, self-indulgent and obstinate. He never forgave anyone who crossed him."
With a character like that it was inevitable that George would have enemies and he did.
Hudson's long time business partner George Stephenson said Hudson had become "too grand for me" and Charles Dickens wrote to his friend the Count d'Orsay…
"I feel disposed to throw up my head and howl whenever I hear Mr Hudson mentioned…"
"…If you can let me know of anything bad about him, pray do… …something intensely mean and odious would be preferred but, but anything bad would be gratefully received"
However, the investors in Hudson's railway companies didn't care that Hudson was vicious, mean and rude, they just cared that their investments in his railway companies made them rich, at least for now. Hudson's tireless work ethic meant more money in shareholders pockets. Hudson also knew how to entertain on a grand scale and the hundreds of people who received his hospitality loved Hudson's lavish banquets.
As Hudson got richer and more powerful he kept control of his companies. In the Newcastle and Darlington Junction Railway Company he made his brother in law Richard Nicholson treasurer and John Close, who had worked in Hudson's drapers shop, company secretary. George Hudson was chairman of the company. This gave Hudson complete control of the company allowing him to run it however he chose.
Economies go Boom… and Bust!
Francis Garnet's full length portrait of the Railway King, showing Hudson with his signature white waist coat, fur trimmed cloak, gold chains and a mace by his side was painted in 1847. Hudson was at the height of his powers, everything he touched seemed to turn to gold, but nothing this good could last for ever, not even for the king of the railways.
At this time Hudson promised his share holders a period of peace and prosperity. Unfortunately that's not what they got.
The economy was in a downward spiral, firm after firm was going bust and it was just a matter of time before Hudson's railway companies fell from grace.
The greatest business scandal of the Victorian Age
Railway Accounts and Railway Dividends
In the summer of 1848 Arthur Smith published a pamphlet titled The Bubble of the Railway Age, or The fallacies of Railway Investment-Railway Accounts and Railway Dividends. Smith claimed that Hudson paid dividends from capital not revenue.Hudson had built his empire by paying good dividends to shareholders, often 10%, this was more than other companies were paying and made investors want to invest in Hudson's companies.
Few investors cared how Hudson made money so long as they got their share, but when the economy took a downward turn and the return on their investment was not so good they suddenly became interested in how Hudson did his business. What they discovered brought the Railway King and his empire crashing down.
I was pleased to discover that York Quaker, business man and social reformer Joseph Rowntree was one of the first to question Hudson's accounting methods. Rowntree's concern came years before the problems arose. Few other people seemed to care until Hudson's dodgy dealing affected their profits.
A Gray Day at York's De Grey Rooms
In medieval times York had one of the biggest hospitals in England, St Leonard's Hospital, part of it still remains. In 1842 a building was built close by in a street called St Leonard's place, we now call that building the De Grey Rooms originally this building was used by the Yorkshire Hussars as an officers mess. George Hudson was instrumental in getting this building built and the De Grey Rooms were used for many of Hudson's railway company meetings.
On 20 February 1849 Hudson attended a meeting with shareholders of his York, Newcastle and Berwick Railway Company, in the De Grey Rooms. Shareholders Horatio Love and Robert Prance explained that a number of shares had been sold to the company. The shares were worth £15 each but had been sold for £23.10s each. George Hudson was the one who gained from selling the shares at this inflated price and the York Newcastle and Berwick Railway Company was the one who paid the inflated price.
Hudson offered to do "whatever the shareholders think most just and fair", they insisted on a committee of enquiry.
The Railway King Resigns
After this, Hudson's other companies asked for enquiries in to their accounts and they didn't like what they found, Hudson had been paying dividends from capital not revenue. This made people believe the Railway King's companies and shares were worth more than they were. Hudson resigned from all four of his railway companies one by one.
To see some photos showing where George Hudson lived click here
This article is based on a book called The Railway King by Robert Beaumont. ISBN = 0 7472 3235 0