Martin Fone's Blog, page 323

Double Your Money – Part Six

George Hudson (1800 – 1871) and the Railway Mania

The railways, without doubt, transformed the economic fortunes of our country in the 19th century. The nascent railway industry provided the perfect opportunity for the unscrupulous to make hay. Although a Private Members’ bill was required to pass through parliament to authorise any new railway company as a measure to prevent fraud and the presentation of unviable proposals, this did not prevent the “entrepreneurs” spending all their investors’ money before the bill reached parliament – as happened with the West End and Southern Counties railway, the Bristol and Liverpool line and the Northampton, Bedford and Cambridge line.

If a bill made it to parliament there were significant conflicts of interest at play. Many MPs were significant investors in the proposed schemes and so would naturally vote them through. Other MPs were paid in guineas – the origin of the phrase guinea pig – by scheme proponents to lend their support to the cause. Newspapers puffed the advantages of a railway line and the development of a modern stock exchange made it easy for members of the public to invest. Often shares could be purchased for as little as a 10% deposit with the railway company retaining the right to call the balance at any time. Many small investors, lured by the promise of significant dividends to be earned from fool-proof schemes, sunk their savings into buying railway shares, even those who could barely afford the deposit.

The problems came when the train wheels met the tracks – it soon became apparent that many of the railways were not as easy to construct as their proponents had claimed and even when operational, the profits to be had were not as great as were originally anticipated. In late 1845 the Bank of England increased interest rates which led to share prices in railways levelling out and then plummeting. Investment stopped almost overnight leaving companies without funding and investors without the prospect of any return on their investments.

Some of the larger railway companies, the Great Western and Hudson’s Midland, bought up some of the failing lines for a fraction of their value, offering shareholders a below par value for their shares. Even so, many middle class families had lost everything when the bubble burst.

Hudson’s modus operandi was to cut costs, often at the expense of safety, offer significant dividends to investors and to cook the books. A pamphlet called “The bubble of the age” published in 1848 accused Hudson of paying dividends out of capital rather than revenue. Whether this was actually true or not, the finances of Hudson’s companies were built on sand. He had borrowed £400,000 at a high interest rate which had to be paid back in 1849. The vultures were beginning to circle and his shareholders were furious.

It soon emerged that Hudson had been selling shares between his companies at exorbitant values – when rumbled he had to pay back £30,000 – and had used the monies of the York and North Midland railway (YNMR) to build a private station at Londesborough Park, his gaff. Faced with demands to repay £750,000 Hudson sold his home (and station?) and repaid £200,000. In 1852 the YNMR magnanimously agreed to release Hudson from all his remaining liabilities for £50,000.

Foolishly, Hudson rejected the offer and the matter went to court, where he promptly lost and in the winter of 1853 had to negotiate a settlement of £72,670 to clear his debts and was forced to sell his property at Newby Park. Small consolation, perhaps, for the many who had bought a ticket to nowhere.

Filed under: Culture, History Tagged: causes of railway mania, causes of railway mania bubble to burst, George Hudson, origin of guinea pigs, railway mania, the bubble of the age, the railway king, York and North Midland railway

A New Day Yesterday – Part Nineteen

Cast your mind back. You had just got back to school after the summer holidays and you were set a task by an unimaginative school teacher, of whom there were a lot – to write about what you did on your holidays, an exercise which often had to be repeated not only in English but in whatever foreign language you happened to be studying.

Not that we thought about it in those terms at the time, but it was a very socially divisive exercise. For those whose parents were wealthy or imaginative, the terms were often mutually exclusive, there was often an embarrassment of riches from which to choose. However, for others, there was a pretty short essay to write – not much.

My mind wandered in this direction shortly after I had been asked what I had been doing in my months of retirement. Regrettably, because of a serious illness to a family member TOWT and I have been shuttling back and forth to a hospital, initially, and then a care home, leaving little time to do anything else other than maintaining the bare essentials of our own life. So not much is a pretty accurate if rather sad statement of fact.

One of things I have been thinking about is how to monetise – awful word – this blog. I find I am at my most productive in the first couple of hours of the day and I spend them thinking, researching and writing or, as TOWT puts it, locked away in my office. A thought was to open up the blog to advertising but I for one get irritated by on-line ads. There seems something slightly desperate about the way on-line advertising works. I made an innocent enquiry as to the value of a rather splendid Paddington Bear which we won in a raffle. Since then I have been pursued relentlessly by ads offering me bears at knock-down prices and I can’t shake them off.

No, I want the blog experience to be as advert-free as possible and, anyway, I can’t imagine the amount of traffic I get would be of the slightest interest to advertisers, desperate or otherwise, and certainly wouldn’t translate into oodles of money. And then the idea came to me. I would think about putting a book together from the contents of some of the posts on my blog.

I settled on the theme, selected the entries, edited them into a more cohesive whole and sent the opus to a couple of publishers. Both were encouraging, one more so than the other, and so I selected them. Contracts were signed, monies paid and the manuscript together with a completed writer’s questionnaire sent off. The manuscript is now going through a proof reading and editing process – just as well as I am the world’s worst Prof Reeedor – and a cover is being designed for me.

I’m really quite excited and can’t quite wait to receive the edited copy for my approval and to see the cover design. I gave them a couple of ideas and will be interested to see what they make of them. Fifty Clever Bastards, for that is the working title, will be available in both a Kindle and paperback format and should be available soon. I will keep you posted.

Filed under: Books, Culture Tagged: creating a book, Fifty Clever Bastards, monetising a blog, on-line advertising, what we did on our holidays school essay

I Don’t Want To Belong To Any Club That Will Accept People Like Me As A Member – Part Twenty Five

The Bald Knobbers of Taney County

If things around you are going to hell in a handcart, there is a temptation for some to take the law into their own hands. In Taney County, Missouri, between 1865 and 1885 there had been forty murders and not one suspect had ever been convicted, Nat N Kinney and twelve others decided in 1883 to take matters into their own hands.

This group of what we would now term as vigilantes called themselves the Citizens’ Committee or, alternatively, The Law and Order League. Their principal objectives, at least at the outset of their six-year existence, were to “protect life and property, aid law enforcement officials in the apprehension of criminals, oppose corruption in local government and punish those who violated the social and religious morals of their community”.

They met in secret on the grassy bald knob summits of the Ozark Mountains – their first meeting was held just north of Kirbyville on Snapp’s Bald –the better to keep a look-out for spies. As a result they were known colloquially as the Bald Knobbers. The majority of the original members were Republicans who had fought on the Union side in the Civil War and, initially, only wore a handkerchief to mask the lower part of their face to disguise their appearance, so confident were they that they had the support of the majority of their community.

This may have been the case as the Knobbers soon attracted more and more members, at their peak numbering several hundred in a county that only had a population of some 7,000. Their costume became more menacing featuring a simple white hood made of muslin with the ends tied to give the appearance of ears and with holes for the eyes and mouth cut out. They were initially successful in driving out outlaws from the area but with so many in their ranks it was perhaps inevitable that they would soon overstep the mark.

Their opponents, known as the anti-Bald Knobbers, resented their growing influence and a nineteen year old, Andy Coggburn, became an outspoken critic, deriding Kinney. In short order Kinney shot Coggburn dead outside the local church at Forsyth where he (Kinney) was about to preach, allegedly in self-defence. This outrage provoked a petition to the Governor of Missouri to sort out the problem of the Knobbers once and for all and following an enquiry by an Adjutant General they agreed to disband with due ceremony in the town square.

But matters didn’t stop there. Other groups of Knobbers had sprung up in neighbouring counties, splitting their communities between supporters and opponents. William Edens was a vociferous opponent of the Christian County Knobbers and a splinter group decided on March 11th 1887 to silence him for good. They broke into the cabin, guns a-blazing and William Edens and Charles Walker were killed and James Edens seriously injured from an axe blow to the head. The screams of women and children caught up in the maelstrom led neighbours to the site of the massacre.

In August 1888 Kinney met a grisly end when Billy Miles shot him three times, the gunman pleading self-defence and exonerated. Eighty were arrested for the Edens’ shootings and four swung, although that is probably too precise a term for the botched execution as the ropes were too long. It took 34 minutes for the last of the four, Billy Walker, to die. After that the Knobbers were pretty much a thing of the past, a salutary lesson of the perils of fighting fire with fire.

Filed under: Culture, History Tagged: Andy Coggburn, grisly execution of Billy Walker, Natt N Kinney,