NEW DECEMBER 2017.  George Hudson of York, nicknamed 'The Railway King', was one of the earliest railway promoters. His companies paid very good dividends to shareholders, and he acquired a kind of 'superstar' status among investors. His 'empire' grew rapidly.

In 1845 he became Chairman of the impoverished Eastern Counties Railway, to the delight of its shareholders. The official story was that the directors had pleaded with him to take this on, but Charles Grinling (in File RH024) suspected that he had masterminded it all, because he had a scheme to use the ECR to further his plans for his railways in the Midlands to reach London.

Hudson's bubble finally burst in 1848 when it emerged that he had been involved in widespread fiddling of the books. In effect he had been paying the good dividends not from the earnings of the railways concerned, but rather from new capital being invested by subsequent shareholders.

This account is a chapter from the book entitled Facts, Failures and Frauds: Revelations Financial, Mercantile, Criminal, written by David Morier Evans and published in 1859, not long after the events described.

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