March 2021 REVISED DRAFT

Watkin’s Struggle at the S.E.R. Board 1876–79, and R.W. Perks

By

Owen E. Covick*

* An earlier version of this paper was presented to a seminar at the Flinders Business School, Flinders University, Adelaide, Australia, in May 2014 Telephone: 61 8 8272 2693

Email: [email protected]

Abstract Becoming a trusted confidante to Sir Edward Watkin was a key step in the business career of Sir Robert William Perks (1849–1934): a career that included the financially successful ‘rescue’ of the Barry Railway during 1887–1889; the rather less financially successful rescue of the Lancashire, Derbyshire & East Coast Railway from 1894; and securing the commitment of C T Yerkes and his backers to the expansion and electrification of the from 1900. How did Perks become Watkin`s right-hand man? The 1909 biography of Perks by ‘Denis Crane’ (pen-name of Walter T Cranfield, 1874–1946) tells us that the trigger was a telegram from Watkin received by Perks as he sat eating Christmas dinner in 1878 with his wife of eight months, at his father-in-law’s house in Banbury. Crane tells us that Perks cut short his family festivities and travelled to meet Watkin at 6.00 p.m. that same day in London. But Crane is evasive about what the ‘important business’ was that Watkin wanted to see Perks about with such urgency. All we get is: ‘From that day forward for fourteen years Sir Robert was by Sir Edward Watkin`s side in all his battles’ (pp 72–73). That sentence does give us a hint however: Watkin`s Christmas Day summons was for Perks to assist him in a ‘battle’. That ‘battle’ lasted through the whole of January 1879, and into early February. It was the decisive engagement in a ‘civil war’ that had been raging (with varying degrees of intensity) on the board of the South Eastern Railway Company since 1876. To appreciate the value Watkin placed on the contribution made by Perks during the weeks following Christmas Day 1878, it is useful to look more closely into that whole ‘civil war’. That is the purpose of this paper. Why was it that such strong antagonism developed among men who had apparently co-operated and collaborated with one another on a basis of mutual respect prior to 1876? What was it that drove and fuelled that antagonism? How was the struggle waged? How close did Watkin come to losing? Why was it that he prevailed? And what were the broader consequences for Watkin of that outcome? This paper does not purport to give definitive answers to those questions. But it attempts to critically review the available evidence – including previously unpublished material from the personal diaries of one of the central protagonists, Edward Knatchbull-Hugesson. And it attempts to draw some tentative conclusions. Among these, one concerns the issue of ‘corporate governance’, arguably as contentious a matter in the 1870s as it is in twenty-first- century capitalism. It is suggested that whereas previous writers have sought to understand and explain the 1876–79 SER board struggle in terms of ‘matters of company policy’ on which views diverged at board level, it might be wiser to focus on a core question of governance as such: namely when the company chairman’s view is at variance with the view held by a clear majority of the board, what can both sides reasonably expect should happen next? If on this question the company chairman’s view is at significant variance with the views of a majority of his or her colleagues, it may simply be a matter of time before enough ‘issues’ emerge to trigger a break-out of hostilities and a breakdown of ‘normal’ board functioning. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 1

Introduction Edward Watkin was chairman of the South Eastern Railway (SER) from March 1866 to May 1894, having first joined its board at the beginning of 1865.1 For the bulk of the period of Watkin’s chairmanship, the board of the SER appears to have functioned in a “normal” way, in terms of the conventions and mores regarding corporate governance prevailing in Britain at this time. But from about 1876 to 1879 the situation was not thus. Towards the end of 1878 dissension on the board reached a crescendo of acrimony, which was played out in public during January 1879 as the two factions on the SER board sought shareholder proxies for use at the general meeting called for Saturday 1 February.2 The lead editorial of Herapath’s Railway Journal on the Saturday preceding that meeting said of the SER:

The accounts are in excellent condition, and a satisfactory dividend is paid, yet the Company is in dire trouble. The Board of Directors are at sixes and sevens. Great dissension exists amongst its members, and so long as this internal warfare lasts can we expect that the business of the line will be well-managed? If the line is managed as it should be during this absorbing turmoil at the Board it follows that the Board does not do much by way of management, and that the Shareholders would be as well off without a Board. The production of the mass of letters, papers, circulars etc., which emanate almost daily from both sides in this unseemly contest, can afford little time to the Board for attending to the affairs of the line. The Board being split into two sections which are at daggers drawn to each other what hope can there be that the business of the Company will be properly attended to while this fierce contest lasts?3

The battle for shareholders’ proxies was won by the pro-Watkin faction. This represented an important landmark for Watkin. The SER was the biggest of the companies of which he was chairman at this time, its 1879 total revenues of £1.82 million comparing with £1.49 million for the , Sheffield & Lincolnshire Railway (MS&LR) and £0.54 million for the

1 Edward William Watkin, born 26 September 1819, was knighted in August 1868 (for services to the Crown regarding Canadian confederation) and awarded a baronetcy in 1880. For a full account of his life and career see David Hodgkins, The Second Railway King: The Life and Times of Sir Edward Watkin 1819-1901, Merton Priory Press, Cardiff, 2002. 2 Hodgkins gives the date as 3rd February (op. cit. p. 470) but that was the date on which the daily newspapers published their reports of the Saturday meeting. 3 Herapath’s Railway (and Commercial) Journal, 25 January 1879, p. 88. Herapath’s was one of three weekly newspapers specialising in railway matters during this period, alongside Railway News and The Railway Times. All three appeared on Saturdays. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 2

Metropolitan Railway.4 In October 1876, as will be discussed further below, Watkin had fought and lost a battle for shareholders’ proxies aimed at securing for him control of a bigger company; the (GER). And it appears that in late 1878 Watkin was fearful that an adverse outcome in the SER contest would have knock-on consequences for his other board positions. R.W. Perks, who served as one of Watkin’s lieutenants during the SER proxies battle, later wrote that Watkin had told him at his initial briefing that:

If they [his opponents] succeeded on the South Eastern Railway they would attack him on the other two lines [the MS&LR and the Metropolitan] … If they won the coming elections Sir Edward Watkin’s days were over.5

The primary purpose of this paper is to explore further the stages in, and the nature of, the 1876–1879 struggle at the SER Board. The writer’s interest in this subject has arisen from his researches into the life and career of R.W. Perks (1849–1934). Perks was a young man when recruited by Watkin to join his campaign team. By the time the campaign was over, he had won great respect in the eyes of Watkin. And this was to operate to the advantage of Perks in the next stages of his business career. The secondary purpose of this paper is thus to shed some further light on how Perks came to be in Watkin’s team and on what his contribution to the SER campaign consisted of.6

There were two bouts of intense and active dissension on the SER board during the period under consideration, separated by a “truce” brokered during December 1877. Part I of this paper summarises the situation prevailing on the SER board following the unravelling of that truce: i.e., the situation prevailing at the time of the Herapath’s editorial quoted earlier. This scene-setting section also briefly compares the situation on the SER board in December 1878 with the position twelve months earlier. Prominent in the second intensive phase of the SER board struggle was the issue of what the SER’s stance should be towards attempting to develop increased traffic through the Thames tunnel at Wapping, over the East London

4 Figures taken from Hodgkins op. cit., Table 6, p. 475. The figures are for total ‘operating’ revenues (both passenger and goods) but do not include revenues from ‘other’ sources such as property rentals. 5 Robert William Perks, Sir Robert William Perks, Baronet, Epworth Press, London, 1936, p. 63. (This book is a series of autobiographical notes made by Perks during the latter years of his life, collected and published by his widow eighteen months after his death. Only 100 copies were printed “for private circulation”.) 6 For a succinct biographical summary of R.W. Perks, see Charles E. Lee, “Perks, Sir Robert William (1849-1934)” in David J. Jeremy (ed.) Dictionary of Business Biography, Butterworths, London, 1985, Volume 4, pp. 628-632. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 3

Railway (ELR). Section II examines the issue of the SER’s stance on traffic development at this time. Part III then backtracks to the situation during the course of 1876 and 1877, and looks into the question of why matters at the SER were not pressed to a head a year before they actually were. Part IV examines the nature of the January 1879 proxies battle. And Part V discusses events on the SER board during the months following the February 1879 declaration of the results of the board elections. After these five “substantive” segments of the paper, there is a discussion of what might be concluded. It is suggested here that whereas previous writers have sought to understand and explain the 1876–79 SER board struggle principally in terms of “issues” or “matters of company policy” on which views diverged at board level, it might be wiser to focus on a core question of governance as such: namely when the company chairman’s view is at variance with the view held by a clear majority of the board, what can both sides reasonably expect should happen next? If on that question, the chairman’s view is at significant variance with the views of a majority of his (or her) colleagues, it may simply be a matter of time before enough “issues” emerge to trigger a break-out of “hostilities”, and a breakdown of “normal” board functioning.

I The SER Board in December 1878 The SER board at this time was comprised of twelve “full” members (including the chairman) plus the special position of French director, occupied by Achille Adam, who lived at Boulogne. M. Adam represented the company’s interests in France but rarely attended SER board meetings and is not recorded in the board minutes as having voted (or spoken) on any of the matters on which there were board divisions during 1876–79. He was however entitled to vote, and there was one occasion on which his presence may have been very important, simply because of the potential of his vote (6 February 1879: see section IV below). The normal term of office for each board member was three years, with four board seats to be filled by shareholder election at the first SER half-yearly general meeting of each calendar year. Appointees to casual vacancies were appointed for the remainder of that particular seat’s three-year period. Board members required to “retire” at the expiry of their seat’s three years were eligible to be nominated for re-election. Table 1 lists the twelve SER board members as at December 1878 and indicates whether they were occupying seats which were to fall due for election at the first general meeting of 1879 (described here as cohort A), or in 1880 (cohort B), or in 1881 (cohort C).

Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 4

As noted in the introduction, the state of intense and active dissension into which the SER board had descended by December 1878 had followed a truce among the board’s members agreed to at the end of 1877, which itself had followed a preceding period of intense and active dissension. The landmark event in that previous period of board turmoil was a motion which included an explicit censure of Watkin, passed by a majority of 5-4 at a special board meeting held on 6 September 1877. At that stage one of the board seats was vacant (the seat which Surtees was elected to fill in December 1877); Rawson was absent overseas; and Buckley abstained from voting. Notice of the motion, including the full wording of the censure of the chairman, had been given immediately following the preceding SER board meeting of 9 August, by Joshua Fielden. Watkin’s attempt to forestall Fielden’s moving it on 6 September was defeated 6-4, Buckley on that point voting against Watkin. Knatchbull- Hugessen who voted with Watkin in both of the votes wrote in his private diary: “Buckley shirked the discussion and did not vote”.7

Table 1: The SER Board in December 1878

Board Member Cohorta Alignmentb Year Born Sir Edward W. Watkin (Chairman) B - 1819 Hon. James M.O. Byng (Deputy Chairman) B anti-EW 1818 Alexander Beattie C anti-EW 1807 John Bibby A anti-EW 1810 Nathaniel Buckley A anti-EW 1821 Joshua Fielden B anti-EW 1827 Edward H. Knatchbull-Hugessen C pro-EW 1829 Jonathan Mellor C anti-EW 1819 Henry Rawson A anti-EW 1819 Charles F. Surtees B anti-EW 1823 James Whatman A pro-EW 1813 Richard Withers C pro-EW 1815 Notes: a refers to when the seat was to fall due for re-election (see text). b “anti-EW” here means a member of the board sub-committee appointed by a majority vote of the board on 12 December, from which Watkin was specifically excluded. These eight referred to themselves as “the board majority” throughout the run-up to the 1 February 1879 SER general meeting.

It was Rawson, once he had returned from overseas, who brokered the truce on the SER board which put a lid on things during the first half of 1878. Rawson told SER shareholders at the 1 February 1879 general meeting:

7 Centre for Kentish Studies, Knatchbull-Hugessen Papers U951 F25/29, entry for Thursday 6 September 1877. These “personal diaries” of Knatchbull-Hugessen’s do not appear to have been used by previous researchers into the history of the SER, although Hodgkins op. cit. makes a number of references to Knatchbull-Hugessen’s quite separate “political journals” (U951 F27/1-12 at the Centre for Kentish Studies). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 5

I have been a friend of Sir Edward Watkin for more than 30 years …. When I returned to England, I endeavoured, at the request of Sir Edward Watkin, to become the mediator between those gentlemen and himself, and in the end I succeeded. I agreed with those gentlemen to a large extent in their opinions with regard to Sir Edward’s conduct, but as a matter of personal friendship, and I believe in the interests of your Company at that time, I succeeded in smoothing over the difficulties.8

The numbers on the SER board were worse for Watkin in December 1878 than they had been in September 1877. The vacant seat had been filled by a director who sided with the group of 5 who had voted to censure him in September 1877. At what Knatchbull-Hugessen described in his diary as “a long and most unpleasant Board” on 1 November 1877, Surtees was elected to the vacancy 6-4, Knatchbull-Hugessen noting “Rawson would not vote”.9 A technicality delayed this decision being put into effect, but at the board meeting of 13 December 1877 Watkin’s attempt to delay it further was voted down by 6-4, with Rawson absent from the meeting. As these votes of 6-4 indicate, Buckley was no longer “shirking”. And when the truce Rawson had mediated unravelled during 1878, he moved decisively into the anti-Watkin camp. Indeed he became the principal spokesman for that group, and continued to be treated in that capacity by Watkin even after he had failed to secure re-election to the SER board in February 1879 (see Section V below). The shift in the numbers against Watkin from 5-4 to 8- 4 had a subtle presentational consequence. In September 1877 it was possible for Watkin’s supporters to assert “it is not true that a majority of the board censured the chairman”10 − their arithmetic being that 5 is not “a majority” out of 12 (or 11). But during the campaign for shareholders’ proxies for use at the 1 February 1879 SER general meeting, Watkin’s supporters had no grounds to object to their opponents describing themselves as “the board majority”.

What was it that Watkin was censured over, at the 6 September 1877 meeting of the SER board? The full wording of Joshua Fielden’s motion was set out in a circular to SER shareholders dated 5 October 1877, which was reproduced in the press during the week following. The circular was signed by Fielden and the four SER directors who had voted for

8 As reported in Herapath’s, 8 February 1879, p. 136 column b. 9 Knatchbull-Hugessen Papers U961 F25/29, entry for Thursday 1 November 1877. 10 This sentence appears in a long paragraph in Herapath’s of 22 September 1877, p. 1004. The paragraph is presented within inverted commas as a quote from a reliable source, but is not attributed. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 6

the motion. Preceding the wording of the motion itself there was a lengthy context-setting introductory. The circular also named the four directors who had voted against the motion. The motion was:

That the Board are of opinion that the acceptance by the Company’s locomotive superintendent of the position of a member of the House of Commons is incompatible with his duties as an officer of the Company, and is in violation of the terms of his engagement with the Company as stated in a resolution of the Board on 22nd day of March 1877 and that the locomotive superintendent be and is hereby relieved of his duties and engagements as an officer of the Company. The Board are also further of opinion that the chairman in assisting at the candidature of one of the Company’s officers at a political election, and in withdrawing the manager and secretary from his duties to the Company to assist in such candidature, has committed a grave error of judgement at once prejudicial to the Company’s interests and to the discipline of the service of the Company.11

The SER employee dismissed by effect of the first portion of the motion was Alfred M. Watkin, the son of Sir Edward Watkin. The board resolution of 22 March 1877 cited in the motion was also reproduced in the circular. The key sentence is “We consider … Mr Watkin should be required to devote his whole time and attention to the duties of Locomotive Superintendent, and that he accept no other engagement except with the special sanction of the Board”.12 Alfred Mellor Watkin (1846–1914) had been an employee of the SER since 1868. From 1872 his title was “outdoor locomotive superintendent”, upgraded by the deletion of the word “outdoor” and a pay rise to £500 p.a. in January 1874. The resignation of the Company’s “locomotive engineer” in September 1876 paved the way for this 1877 further enhancement in his status.13 The SER board resolution of 22 March 1877 raised Alfred’s salary to £800 p.a. backdated to 1 January, and also provided him rent-free with “the house and premises previously occupied by Mr Cudworth at Ashford”. Byng was in

11 See Herapath’s, 13 October 1877, p. 1060, for the full circular (which takes up the entire page). 12 loc.cit. 13 James l’Anson Cudworth (1817-1899) had been appointed locomotive superintendent of the SER in 1845. (See John Marshall, Biographical Dictionary of Railway Engineers, David and Charles, Newton Abbot, 1878, p. 62). Hamilton Ellis believed Watkin had manoeuvred to dislodge Cudworth through a process of “hurting his feelings and making him look ridiculous in the eyes of others” (British Railway History, 1877-1947, George Allen and Unwin, London, 1958, p. 56). But O.S. Nock seems to have been exaggerating in saying Watkin “sacked J.I. Cudworth … without any knowledge, let alone agreement, of the Board” (The South Eastern and Chatham Railway, Ian Allan, London, 1961, p. 86). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 7

the chair for this board item, Sir Edward having left the room while it was under discussion. Alfred, by this stage had been elected to board positions on both the MS&LR and the . Byng’s position was that the 22 March 1877 resolution required Alfred to vacate both of those directorships. Sir Edward succeeded in persuading the next meeting of the SER board that Alfred should be permitted to retain his board seat at the Metropolitan.14 Alfred’s resignation from the MS&LR board was accepted on 11 May 1877. And that was how matters rested until mid-July.

An important “special feature” of the SER at this time should be noted at this stage. Whereas the typical arrangement in shareholder-owned companies is for the board (elected by the shareholders) to appoint a chief executive officer (CEO) explicitly responsible to the board for the execution of board decisions and the implementation of board-determined policies, the SER at this stage did not have such a CEO. There had been such a CEO at the SER, titled the company’s “General Manager” until December 1873: Cornelius Eborall. But following Eborall’s death in that month the SER board resolved “that the office of General Manager be abolished”, and that Watkin be requested to take on additional duties including “exercise [of] the general authority of approval and veto usually delegated to a General Manager”.15 The two posts of manager and secretary, previously responsible to the General Manager, were amalgamated into the single post of “Manager and Secretary” and John Shaw appointed into that post at £1,200 p.a.16 The implication was that this “Manager and Secretary” would be responsible directly to Watkin and subject to his direction – except where a board resolution specifically stated that the manager and secretary should do x or y.

The facts suggest that in mid-July 1877 Sir Edward Watkin made a deliberate decision to embark on actions contrary to the SER board resolution of 22 March 1877 concerning his son Alfred’s terms of appointment with the company. On 18 July 1877 John Chapman died. He had been a director of the MS&LR for 37 years and was MP for Grimsby. On 25 July 1877 the board of the MS&LR elected Alfred Mellor to fill the vacancy. Richard Withers, a director of the MS&LR as well as of the SER, seconded the motion re-electing Alfred to the board he had resigned from a little over two months earlier. According to the circular issued by Whatman, Withers and Knatchbull-Hugessen on 8 October, Alfred was not consulted by

14 This was stated by the SER’s pro-Watkin directors in their circular to the company’s shareholders dated 8 October 1877. This circular, signed by Whatman, Withers and Knatchbull- Hugessen was reproduced in full in Herapath’s, 13 October 1877, p. 1061. 15 SER Board Minutes: TNA, RAIL 635/42, 31 December 1873 (p. 297-8, minute 395). 16 loc.cit. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 8

“his colleagues” at the MS&LR about this re-election. On the same day, 25 July, Alfred travelled from London to Grimsby accompanied by the SER’s manager and secretary, Shaw. On arriving in Grimsby Alfred was met by his father who only then, it would appear, informed him that he was being nominated as the Liberal party’s candidate for the seat.17 The poll was held on 1 August and Alfred was successful.

Upon his return to London Alfred wrote a letter, dated 2 August and addressed to the SER’s manager and secretary, in which he offered “the usual 6 months notice” of resignation. He also stated “I desire to remain in the service to which I feel strongly attached”, and indicated a willingness to be paid a reduced level of salary during sessions of Parliament.18 Sir Edward chose not to have this letter read at the SER board meeting of 9 August, although he later claimed that he had informed the board on that day that a letter from Alfred “to the Board addressed to the Secretary existed”, and also that because he himself wished to make a personal explanation he had asked for a postponement of its reading (and of his personal explanation) until the day of the next board meeting.19

This was the immediate context of the motion of censure of the company’s chairman passed by the SER board at its meeting of 6 September 1877. Immediately following the vote on that motion, Watkin gave notice of a motion he proposed to move at the next meeting of the board:

… that the present position of the Board will lead to a loss of authority – and probable confusion in the management of the company – and that a special meeting of the Proprietors be convened with a view to enabling the Proprietors to take such measures as may be necessary to re-unite the Board in the performance of its duties.20

17 The Whatman et al circular is that reproduced in Herapath’s, 13 October 1877, p. 1061. The account of Alfred’s parliamentary candidature being organised by his father without his being informed until his arrival in Grimsby was given by R.W. Perks (see R.W. Perks, op. cit., pp. 73-74). As Hodgkins has pointed out (op .cit., p. 458) this account is almost certainly second-hand, there being no evidence that Perks was present in Grimsby on the day in question. 18 SER Board Minutes: TNA, RAIL 635/45, 6 September 1877 (p. 394, minute 604). 19 ibid, RAIL 635/45, 20 September 1877 (p. 401, minute 610). This matter arose as a result of Bibby questioning the accuracy of a sentence in the minutes of the 6 September board meeting stating that Alfred’s letter dated 2 August had been “submitted to the Board” on 9 August. 20 ibid, RAIL 635/45, 6 September 1877 (p. 400, minute 607). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 9

In light of the fact that he had just been out-voted twice in a row at this meeting, it is hard to imagine that Watkin harboured much hope of obtaining a majority for a motion with that wording at the next meeting. But the objective of a special meeting of SER shareholders could be secured by an alternative mechanism to a resolution of the SER Board. The “constitution” of the SER, as set out in the company’s various Acts of Parliament, provided that if a sufficiently large number of the company’s shareholders, holding a sufficiently large quantity of the company’s stock, submitted to the SER board a formal “Requisition” that a special general meeting be called, the board was required to do that. At the SER board meeting of 20 September 1877 such a “Requisition” was presented. Counting holdings held in more than one name as a single “shareholding”, signatures representing more than one hundred shareholdings appear on the Requisition. And although the copy in the SER Board minutes does not give figures for the size of the holdings, Herapath’s reported that over £700,000 of SER stock was held by those signing the Requisition.21

The first signature on the Requisition was that of William Mewburn. Mewburn was a member of the Manchester stock exchange, and a partner with his son William Mewburn junior and his son-in-law John Lees Barker in the stockbroking firm of Mewburn and Barker. The signatures of Mewburn jnr and John Lees Barker appear immediately following Mewburn’s on the Requisition. At the SER’s half-yearly general meeting of July 1876 Watkin had told shareholders that “the largest of all” the company’s shareholders was Mr William Mewburn.22 Mewburn was a regular attender at SER general meetings. At the January 1873 meeting Watkin had said “I see my friend Mr Mewburn present” and then invited him to express his views on a question. At the January 1876 meeting he gave his views on how the interests of the holders of a class of the company’s shares called “deferred shares” differed somewhat from the interests of the holders of ordinary shares – possibly implying that his own holdings were concentrated in the former. (See Appendix A for an explanation of “deferred” shares.) At the January 1877 meeting it was Mewburn who

21 ibid, RAIL 635/45, 20 September 1877 (pp. 422-427, minute 645); and Herapath’s, 22 September 1877, p. 1004. 22 TNA, RAIL 635/11 (SER: Report of Proceedings at Meetings of Shareholders 1867-1880), Report of meeting held 20 July 1876, p. 51. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 10

seconded Byng’s motion that Watkin be re-elected to his board seat with the company. At the July 1877 meeting he was elected by shareholders to the SER’s audit committee.23

Mewburn attended the SER board meeting of 20 September 1877 to hand in the Requisition. He was accompanied in doing this by John W. Maclure, another of the signatories of the document, and also inter alia, a director of the MS&LR, and chairman of the Manchester Conservative Association.24 In January 1868 when the SER closed its office in Manchester, the company’s general manager Eborall had recommended that Maclure be paid £100 p.a. to represent the company as its agent in Manchester with a further £50 p.a. for the use of his offices for SER purposes.25 It is not clear whether this recommendation was implemented or whether Maclure was still in that capacity in September 1877. Immediately before Mewburn and Maclure entered the SER board room to present the Requisition on 20 September 1877, Watkin told his fellow directors that he would not be pressing the resolution he had given “notice of motion” of on 6 September.26

The Requisition was for a special general meeting of the SER to be called to consider two resolutions. The first was that the vacant seat at the Board should be filled by a proprietor representing the deferred stock of the company. The second was to call upon the SER’s chairman: “who it is understood has expressed a wish to retire, to consent to remain with the company in his present capacity …”.27 During the discussion between Mewburn and Maclure and the SER board, Mewburn stated that his own holdings of SER shares, including shares registered in the names of members of his family and other nominees totalled “about £320,000”.28 This was probably a higher figure than the “anti-Watkin” directors would have been aware of, from their access to the SER’s share register. Rawson, now back from overseas, moved that the board be given two weeks to determine its response to “the

23 The first reference to Mewburn in SER Board minutes or reports of shareholders meetings appears to have been in June 1868. Watkin presented to the board his “Chairman’s Report” on the large Debenture Stock issue made by the SER earlier in that year. He said he had originally favoured having the pricing and placement arrangements for that issue externally audited by “3 independent members of the stock exchanges of London, and Manchester … Messrs Cazenove, Withers and Mewburn”, but now favoured giving that responsibility to “Mr Waterhouse” (already by 1868 a well-respected public accountant). TNA, RAIL 635/39, 25 June 1868 meeting, minute 752. 24 See H.J. Hanham, Elections and Party Management: Politics in the Time of Disraeli and Gladstone, Longmans, London, 1959, pp. 314-315. Maclure became a Conservative MP in 1886 and held his seat until his death in 1901. 25 TNA, RAIL 635/39, 9 January 1868 (minute 578). 26 TNA, RAIL 635/45, 20 September 1877 (p. 422, minute 644). 27 ibid, p. 423, minute 645. 28 ibid, p. 426. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 11

requisitionists”. All of the board members supported that, and neither Mewburn nor Maclure raised any objections. The board meeting concluded with Watkin withdrawing from the room, Byng taking the chair and the decision being taken that the SER’s manager and secretary should issue a statement to the effect: “there is no truth in the rumour that Sir Edward Watkin MP has resigned the chairmanship of the South Eastern Railway.”29

It is of course possible to imagine that Mewburn and Maclure had heard rumours that Watkin was considering resigning, and chose to set about organising “the Requisition” on their own initiative. The lead editorial in The Railway Times of Saturday 15 September 1877, citing reports in daily newspapers “early last week” that Alfred Watkin had been sacked from the SER by a majority vote of the board, said: “It is understood that the chairman of the [SER] … was placed in a minority in the vote on the board on this question”. The editorial went on to praise the SER directors for taking that action and to argue that if Sir Edward Watkin were to resign in consequence “the benefit to the shareholders would be largely increased”.30 But the time-frame for leaks about the 6 September censure of Watkin to become rumours of his expressing a wish to retire, for Mewburn and Maclure to draw up the wording of the requisition and to secure over a hundred signatures to it, and be ready to lodge it by 20 September, looks tight. In light of this, and also of the notice of motion Watkin gave the SER board immediately after the censure it would seem reasonable to assume that those SER board members who voted in favour of that censure viewed Mewburn and Maclure as acting in concert with Watkin and the three SER board members who had voted with him on 6 September. And it may have been their suspicion that the wheels had already been set in motion for such a requisition earlier than 6 September, closer to the point at which Watkin made his decision to take actions contrary to the SER board resolution of 22 March 1877 concerning Alfred Watkin’s terms of appointment.

In a situation such as the SER board was at this stage in, questions of how the parties perceived their counter parties’ behaviour cannot simply be ignored. Where the perception is that the counter party’s behaviour is outside the bounds of acceptable conduct, that is likely to lead to a further inflaming of the situation. It would seem reasonable to believe that those SER directors who voted against Watkin on 6 September viewed two possible responses on

29 ibid, p. 427. 30 The Railway Times, 15 September 1877, p. 818. The editorial stance of The Railway Times (and also Railway News) was typically anti-Watkin while that of Herapath’s was usually sympathetic to Watkin. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 12

the part of Watkin as within the bounds of acceptable conduct: to accept the majority decision of the board and indicate some reasonable degree of contrition for having taken actions in his executive capacities at the SER that ran contrary to a previous majority decision of the board; or to tender his resignation. And if so, those same directors probably viewed the response Watkin did make as an attempt by him to obtain by an “appeal” to a general meeting of the company’s shareholders, some resolution he would interpret as a license or mandate to implement his own views on what was in the best interests of the SER, even in cases where the Watkin view was not supported by a majority of the shareholder-elected directors.

The fourteen days grace period Rawson had obtained for the SER directors to consider the Requisition was set to expire at the board’s next scheduled meeting: 4 October 1877. Knatchbull-Hugessen’s diary for 3 October records that he met with Withers, Watkin, Mewburn and Maclure on that day and the five “consulted about our action tomorrow”.31 If Watkin’s opponents on the SER board did believe that Mewburn and Maclure were operating in concert with him, they were not wrong. At the board meeting on 4 October, Mewburn and Maclure were told that the board’s view was that “no advantage would now be obtained by holding the proposed special meeting”, and they were requested “to consider whether they would persevere [with the Requisition]”.32 Watkin had already written to Mewburn a “private letter” in which he stated he was hoping for a “reasonable compromise of the unfortunate differences which have cropped up … [so that] everything might be disposed of amicably and kindly …”. Presumably aware that Watkin had asked Rawson to commence an attempt at mediation, Mewburn and Maclure agreed to a further two weeks delay while they considered their position regarding the Requisition.33

There was another interesting development at that same board meeting. A letter from Alfred Watkin, conveniently dated 6 September 1877, was read to the meeting. In it Alfred had written that he understood his previous letter dated 2 August “does not satisfy some of the Directors” and that therefore “I beg to resign as from this day”.34 At the board meeting of 20 September, Knatchbull-Hugessen had questioned the legality of the company dismissing a salaried employee without notice, on the basis of his having allowed himself to be elected to a

31 Knatchbull-Hugessen Papers, U951 F25/29, entry for 3 October 1877. 32 TNA, RAIL 635/45, 4 October 1877, p. 445, minute 676. 33 Watkin’s letter to Mewburn, dated 25 September 1877 was read at this 4 October board meeting and is reproduced in the minutes at pp. 443-445. 34 ibid, p. 431, minute 656. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 13

seat in the House of Commons.35 But with this letter signed by Alfred and dated 6 September 1877 now entered on the SER minutes, there was little point in that question being pursued further – at least at SER board meetings. That did not however stand in the way of the pro- Watkin directors raising that question in their circular to SER shareholders dated 8 October 1877, or the five directors who had voted for Alfred’s dismissal responding on that question in the course of their circular to SER shareholders dated 25 October 1877. That latter circular reproduced both of Alfred’s letters to the company as an “appendix”.36

It appears to have been mid-December 1877 before Rawson’s efforts at mediation began to achieve tangible results. By that time Alfred and matters concerning what activities extra- curricular to his post with the SER the board of the company might reasonably be expected to be willing (or unwilling) to condone had progressively shifted away from centre stage. At the 1 February 1879 general meeting of the SER, Rawson – with Watkin’s consent – read to shareholders extracts from the document he had drawn up in December 1877 to bring to an end what he described as “the quarrel” on the SER board:

An opinion prevails among some of the Directors that the Chairman has not on all occasions carried out the decisions of the Board, and that he has in some instances acted on his own views in opposition to those of the majority of his colleagues. This I believe, has arisen to a large extent from a want of full and frank explanation of the subjects under discussion. In order to prevent any further misunderstanding and to terminate the present unfortunate position of affairs, I consider that, whilst the Board ought to give to the Chairman a loyal and cordial cooperation and support, on the other hand the Chairman is bound fully to acknowledge and carry out the resolutions of the Board in the same spirit.37

Knatchbull-Hugessen’s diary entry for Wednesday 2 January 1878 records that that evening he dined at the Reform Club with Withers, Mewburn, Maclure and Watkin “and discussed SER affairs, agreeing to insist upon a paragraph [in the half-yearly directors report] saying that the Board would unanimously support Watkin”.38 Rawson was able to draft a paragraph

35 ibid, p. 401, minute 609. 36 These two circulars were printed in full in Herapath’s: 13 October 1877, p. 1061; and 27 October 1877, p. 1108. 37 This is the wording reported in Herapath’s, 8 February 1879, p. 136. It is identical to that in what appears to be a full transcript of the meeting published in the Manchester Guardian “from our own reporters”, 3 February 1879, p. 6. 38 Knatchbull-Hugessen Papers, U951 F25/30, entry for 2 January 1878. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 14

which both sides agreed to. Knatchbull-Hugessen’s diary entry on the SER board meeting of 16 January reads: “Report passed with a clause giving unanimous and cordial support to Watkin and declaring all differences to be satisfactorily and finally settled”. These words are followed immediately by three large exclamation marks.39 It is not clear whether these denote an expression of relief, or an expression of scepticism/irony on Knatchbull-Hugessen’s part. The SER’s half-yearly general meeting was held on Friday 1 February 1878. It appears that only one person mentioned what today might be described as “the elephant in the room”. When Alexander Beattie one of the five SER directors who had voted against Watkin in the 6 September confrontation was nominated for re-election to his board seat by Watkin, a shareholder who coincidentally was also called Alexander Beattie rose and said:

… I doubt very much whether the patched-up agreement between the honourable chairman and his assailants will conduce to the good government of our affairs; and considering the very strong and hostile views promulgated by some of his colleagues … I should have expected that self-respect alone … would have prevented those gentlemen from coming forward again for re-election. I regret that there are not some shareholders present who could come forward to enable us to elect them in their places …40

This shareholder, who will be referred to as Dr Beattie to distinguish him from Beattie the director, was probably not the only person in the room to harbour doubts about the new state of cordiality on the SER board, but his was the only voice to express such doubts in public at that February 1878 general meeting. The four retiring directors were all re-elected unopposed. Surtees was confirmed, without any opposition, to hold the board seat Watkin had resisted his being appointed to seven weeks earlier. All the other business of the day went smoothly. And at the wind-up Maclure seconded the formal vote of thanks to the Chairman, directors and officers of the company, stating:

I feel we owe a great debt of gratitude to Sir Edward Watkin for having conducted the business of this company so many years with such ability and so marked a

39 ibid, entry for 16 January 1878. Knatchbull-Hugessen had referred to Rawson having taken responsibility for drafting the required paragraph, in his entry for 3 January 1878. 40 TNA RAIL 635/11. (Report of half-yearly meeting held 1 February 1878, p. 32). It is not clear whether the two Alexander Beatties were related. Both were born in Scotland: Beattie the SER director in about 1807; Dr Beattie in about 1803. Both spent some time in India, Dr Beattie as a surgeon with the East India Service, the somewhat younger Beattie as a merchant in Calcutta. Dr Beattie died in January 1884, the younger Beattie in February 1889. Dr Beattie was not a signatory to the Mewburn/Maclure “Requisition”. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 15

success, and also to the Directors for the way in which they have watched over our interests …41

One imagines that Dr Beattie would have raised his eyebrows over the latter part of that statement. It appears that up to this point at least Dr Beattie had not been privy to the counsels of the inner circle of Watkin’s advisers and supporters. Immediately before calling for a show of hands on the re-election of the retiring directors, Watkin had said, “I won’t say a word in reply to Dr Beattie but I should be most happy, in private, to explain everything he likes”.42

For the first few weeks following the February 1878 SER half-yearly general meeting the “cordiality” of interactions among board members seemed to hold. At the board meeting of 21 March 1878 Beattie raised the matter of two board sub-committees that had been established during the height of the confrontation. Both had been established at the instigation of the anti-Watkin grouping, and the three pro-Watkin directors had been excluded from membership of either. Beattie stated that Rawson had written to him: “expressing his opinion that those matters … [had] been finally settled by the understanding arrived at in December and January last, by which all differences on these and other points between the Directors were brought to a satisfactory conclusion. Beattie moved that the two committees “be discharged” and that was accepted apparently without dissent.43 But the peace that Rawson had brokered did not endure through to the company’s next half-yearly general meeting, held in July 1878.

To understand the next stage of developments on the SER board it is necessary to look at what represented the more significant matters on which Watkin and board members other than his three supporters (Whatman, Knatchbull-Hugessen and Withers) held divergent views prior to Alfred’s extra-curricular activities becoming thrust into the limelight. One was Watkin’s own activities extra-curricular to his SER responsibilities. Watkin was paid £2,500 p.a. for his work for the SER. Jonathan Mellor, Watkin’s brother-in-law and a director of the SER since 1855, gave the 1 February 1879 SER general meeting the following account of how the terms of Watkin’s engagement had been struck. Mellor said that Watkin believed £2,500 was appropriate because that was the figure Samuel Laing was receiving for chairing

41 loc. cit. 42 loc. cit. 43 TNA RAIL 635/46 (p. 50, minute 110). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 16

the London, Brighton & South Coast Railway. (The LBSCR operated immediately to the west of the SER and was only moderately larger than the SER as a business concern.) Mellor said he told Watkin:

… no doubt it could be arranged if he undertook to give up the presidency of the Grand Trunk [of Canada] and confine himself to the Manchester and Sheffield and the South Eastern Railway. Upon those terms Sir Edward Watkin accepted the £2,500 a year.

Mellor said Watkin had proposed that these terms be put in writing, but the board had preferred to take his word “as a man of honour and a gentleman”.44

Oral contracts are notoriously difficult to enforce. And it seems likely that a majority of the SER board were willing to consent to the terms of this particular oral contract being varied from time to time to accommodate at least some of the various additional “outside” business responsibilities Watkin took on over the period to the end of 1877 such as the chairmanship of the Metropolitan Railway and chairing the London committee of Erie Railway Company’s bond- and share-holders during the reconstruction of that company.45 It is possible that there was greater disquiet about Watkin’s allowing himself to be nominated for a seat on the board of the GER in July 1876, and then actively campaigning to take the chair of that company in the months following.46 But in mid-November 1877 Watkin resigned from his board seat at the GER. So this matter of Watkin’s own activities extra-curricular to his SER responsibilities was, at the end of 1877, a “sleeper” as an issue at the SER board. One of the two sub-committees of the SER board that were disbanded on 21 March 1878 had been set up: “to enquire whether any [SER] officer now is, or has been engaged on any other employment, than that of the company in contravention of the Board order of 9 June 1870”.47 It had been authorised to call and examine witnesses, to require the production of books and

44 Manchester Guardian, 3 February 1879, p. 6. 45 For Watkin’s work on the Erie “rescue”, see Hodgkins op. cit., pp. 404-408. Rawson was also a member of the London committee of the Erie bond- and share-holders through the period of Watkin’s work on that “rescue”. 46 One of Watkin’s principal supporters in this attempt to gain control of the GER was Roger Eykyn. Hodgkins provides details of Watkin writing to Eykyn on 8 July 1876 indicating that he believed he would need to step down from chairmanship of one of his other three railway companies in the event of his being elected chair of the GER (ibid, p. 408). 47 TNA RAIL 635/45, p. 442 minute 675, and p. 458 minute 696. For the wording of the 9 June 1870 board resolution see RAIL 635/40, minute 469. It was reproduced, in full, in the circular to SER shareholders dated 5 October 1877 issued by the anti-Watkin group of directors. (See Herapath’s, 13 October 1877, p. 1060.) Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 17

papers etc., and to avail itself of “assistance”, such as legal advice. The June 1870 resolution had specifically referred to officers being paid a “salary” by the SER and Watkin could probably have mounted a plausible case that this £2,500 p.a. was not a “salary”. But if his sending of Shaw to Grimsby to help Alfred on his election campaign was not the sole occasion on which he had used SER salaried officers to do work on non-SER “Watkin projects”, he would have been pleased to see that particular board committee disbanded as part of the ceasefire.

A second area in which Watkin and the board members other than Whatman, Knatchbull- Hugessen and Withers had found themselves holding divergent views prior to the events of July 1877 concerns what might be called the “mission” of the company – or, to be more accurate the types of strategy most likely to succeed in furthering that “mission”. The mission of any railway company is to provide train services, one hopes. If it is a shareholder-owned railway company it will want to do this on a basis that provides pecuniary returns to its shareholders which they deem to be satisfactory. Improving the returns to the shareholders can be pursued either by deepening the profitability of and lifting the volume of the traffic and types of traffic already catered to by the company’s services, or by broadening the scope of the company’s activities so as to better cater to additional sources of traffic that look appropriately promising in terms of net revenue potential. What options were available for developing the traffic of the SER, and why there were divergent views as to the appropriate stance for the company to adopt regarding traffic development matters are the subject matter of the next section of this paper.

II The issue of the SER’s stance on traffic development The traffic situation facing the SER in the early 1870s, in a nutshell, was that the SER had become established as one of four significant railway companies catering to the geographical area stretching from the southern edge of central London to the channel coast. Each of the four companies had facilities at its “own” channel port and catered to traffic to and from France. The commercial and administrative heart of London was concentrated on the north bank of the Thames. There were four railway bridges across the Thames in the central area; three leading from the south into terminal stations on the north side of the river (each accessible only from across its own purpose-built bridge) and one leading to a physical connection with railway companies catering to the area stretching northwards and westwards Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 18

The principal main-line stations in 1870s London and the six Thames railway crossings. from the northern edge of central London. The SER owned and operated two of those three terminal stations, Charing Cross and Cannon Street. Opened in 1864 and 1866 respectively those two were closer to the central business district of London than Victoria (the third of the terminals), opened in 1860.48 But a passenger arriving from south of the Thames at Victoria could cross to the adjoining station owned by the Metropolitan District Railway (MDR) and catch a train from there eastwards to the vicinity of either Charing Cross or Cannon Street, or westwards to stations to the west and north of London’s central business area. Roughly halfway between Charing Cross and Cannon Street on the north bank of the Thames was Ludgate Hill, the station reached by the only rail link across the river in the central area that had a physical connection with northern companies. Ludgate Hill and its purpose-built rail bridge alongside Blackfriars was under the control of the London, Chatham & Railway (LCDR). This line connected to the Metropolitan Railway at Farringdon Street and thence to the Great Northern Railway (GNR) and the Midland at Kings Cross and St Pancras respectively.

48 See T.C. Barker and Michael Robbins, A History of London Transport, Volume One, George Allen and Unwin, London, 1963, pp. 140-145. The LBSCR held a majority interest in the company that owned Victoria (the Victorian Station and Pimlico). The London, Chatham & Dover Railway (LCDR) was able to use that station because it had negotiated the LBSCR’s consent. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 19

One school of thought on the SER board was to view Charing Cross and Cannon Street as the “jewels in the crown” of the company. Their location was better than Victoria. The physical facilities were better than at Ludgate Hill. The SER had built a station adjoining Waterloo which meant that many passengers from the catchment area of the London & South Western Railway, arriving at Waterloo on LSWR trains, were happy to complete their journeys into the city by SER trains into Cannon Street rather than use LSWR trains to Ludgate Hill. Many who travelled into south London on LBSCR or LCDR trains no doubt preferred to complete their journeys with SER services into Charing Cross or Cannon Street rather than remain with those companies into Victoria or Ludgate Hill. And in those parts of the South East where customers had a choice between SER services and LCDR services, or between SER services and LBSCR services, the relative attractions of Charing Cross and Cannon Street vis a vis Victoria and Ludgate Hill may have been the decisive factor in winning the customer’s full journey for the SER. And the same was no doubt argued regarding customers wishing to travel from London to Paris (or beyond) and vice versa.

Under this school of thought the answer to the question of which types of traffic the SER should target for devoting energy to building-up was that the company’s top priority should lie in safeguarding and increasing the volume of traffic into and out of Charing Cross and Cannon Street. The price of these jewels in its crown had been high. Commitment to the construction of the two had been made prior to Watkin being appointed chairman. The cost of the schemes (the terminals themselves, plus bridges and links to existing SER facilities at London Bridge station) had originally been estimated at £1,070,000. It eventually amounted to £4 million,49 which represented not far short of 30 per cent of the company's total nominal paid-up share capital in the early 1870s. It is hardly surprising that a number of the SER’s directors felt that developing additional traffic between those two terminals and points within and on the edges of company’s “natural” catchment area to their south and south-east should be the priority, that commitment of SER resources to other objectives should be strictly limited, and that initiatives which might cause some passengers who would otherwise have used Charing Cross or Cannon Street to not do so should be viewed as anathema.

49 The original cost estimate is given by John R. Kellett Railways and Victorian Cities, Routledge and Kegan Paul, London, 1969, p. 275. The £4 million figure is given by Hodgkins, op. cit., p. 261. The same figure appeared in Edward Cleveland-Stevens, English Railways: their development and their relation to the State, Routledge, London, 1915, p. 305. At first the SER managed the project through a majority-owned subsidiary company, but in 1864 it was necessary for that subsidiary to be wound-up and for the SER to take on full direct responsibility. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 20

Watkin, it would appear, viewed things differently on this question of what areas of traffic the SER should be willing to devote energy to developing. What about customers and potential customers south of the Thames who wanted to travel (or convey parcels) to points that were beyond convenient walking, cabbing or carting distance of Charing Cross or Cannon Street? And what about the converse: traffic and potential traffic from starting points to the north, beyond easy striking distance of Charing Cross or Cannon Street, to points south of the Thames or even south of the Channel? Was it not in the interests of the SER’s shareholders to try to build-up its revenues from these types of potential traffic, either by developing through running of services between points in its “natural” catchment area and points to the north significantly beyond Charing Cross and Cannon Street, or by developing the near equivalent: services between such points via convenient interchange stations shared with north-of-the-Thames companies (or by some mix of the two)? If the SER’s rival railway companies south of the Thames chose to embark on strategies such as these, and the SER did not, the SER could easily find itself facing a struggle simply to hold-up its traffic volumes into and out of Charing Cross and Cannon Streets.

The SER’s board did agree to provide tangible support to Basil Woodd’s scheme for an independent company to build a cut-and-cover line from Charing Cross to Euston and to St Pancras, providing facilities that would allow through running between the SER and the London & North Western Railway (LNWR) and the Midland Railway. This “London Central Railway Company” obtained Parliamentary authorisation in August 1871 and secured agreement by the Metropolitan Board of Works to contribute £200,000 towards the costs of the new street to be constructed above the southern segment of its line. On 1 December 1871 Woodd’s company issued its prospectus, seeking to raise £1.5 million.50 But by that stage the LNWR had gone cold on the scheme. The prospectus held out the hope of making agreement with the LNWR, but stated that its junction with that company’s system would not be constructed until such an agreement was made. The capital raising failed. In 1875 the London Central Railway (Abandonment) Act was passed, and the scheme’s parliamentary deposit retrieved.51

50 Basil Thomas Woodd (1815-1895) was MP for Knaresborough 1852-1868 and 1874-1880 (Conservative). He was the son of Basil George Woodd, a London wine merchant with estates in Middlesex, Surrey and Yorkshire who died August 1872. The company’s prospectus was printed in a variety of newspapers including the Pall Mall Gazette of 5 December 1871, p. 15, columns 3 and 4. It gives a summary of the company’s agreements with the SER and the Midland. 51 See London Gazette, 6 July 1875, pp. 3464-3465. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 21

Apart from the case of this Basil Woodd scheme, proposals seriously considered by the SER board during the early and mid-1870s that would have served the objective of promoting greater traffic flows between the SER’s system and the systems of north-of-Thames railway companies all seemed to run into resistance from those SER board members who viewed traffic into and out of Charing Cross and Cannon Street as the company’s number one priority.52 And up to early 1878 Watkin appears to have been willing to refrain from pressing assertively for action on that former objective in the face of resistance from a majority of his board colleagues. The unravelling of the January 1878 truce on the SER board was closely bound-up with Watkin’s decision to shift to a progressively more assertive and more combative stance in this regard.

Knatchbull-Hugessen’s diary entry for 30 May 1878 records: “Great row between Sir Edward Watkin and Mellor on account of the latter’s objection to an experimental service over the new Blackfriars [link].”53 As noted previously the SER’s rival on its eastern flank, the LCDR, had constructed a line across a purpose-built bridge over the Thames which connected its system south of the river with the Metropolitan Railway at Farringdon. That line meant that there could be through-running of trains from the GNR’s system and the Midland’s system as well as from the Metropolitan onto the LCDR. Through-running passenger trains from suburbs to the north of London such as Hendon and New Barnet to points south of the river such as Brixton may not have attracted large numbers of passengers travelling the full distance.54 But such trains had the advantage of not having to be reversed across a space-constrained river crossing either into or out of a cul-de-sac as was the case with services into Charing Cross and Cannon Street. And there was also scope for through running of trains conveying goods and parcels – which could be scheduled to avoid the peak-periods in passenger traffic. The LCDR’s river-crossing was immediately downstream from Blackfriars bridge. The LCDR had improved the facilities for passengers travelling into the city from south of the Thames on this line by opening Holborn Viaduct station in 1874.55 The

52 Hodgkins, op. cit., p. 356 reports the SER considering in August 1873 “the possibility of” a connecting line to run directly north from Cannon Street, adding “but nothing came of it”. If finance could not be found for Woodd’s scheme, it is not surprising that this proposed line got no further than being a possibility. 53 Knatchbull-Hugessen Papers, U951 F25/30, entry for 30 May 1878. 54 See Barker and Robbins op. cit., pp. 163-164 for a list of some of the through-running options available by the early to mid-1870s. 55 H.P. White (op. cit., p. 37) describes this station as having been constructed by the “nominally independent Holborn Viaduct Station Company”. It was connected to the Ludgate-Farringdon line by a 292 yard branch which meant its use involved similar cul-de-sac and reversing issues as at other terminal stations. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 22

“new” link referred to in the Knatchbull-Hugessen diary entry was a connection between the SER’s line east-west from London Bridge station to Charing Cross and the LCDR’s north- south line leading to the Blackfriars river crossing. This link was scheduled to be opened on 1 June 1878. It is probable that Mellor believed SER participation in “experimental” services over this new link would deflect passenger traffic away from Charing Cross and Cannon Street, while Watkin was fearful of the consequences of the SER trying to “stick to its knitting” while its rival the LCDR was displaying so much more get up and go.

The LCDR’s bridge alongside Blackfriars bridge was the only river crossing in the central London area over which through-running of trains between the systems of the south-of- Thames companies and the systems of the north-of-Thames companies was possible. There were, however, two other cross-Thames rail links fairly close to the central London area. One was the bridge of the West London Extension Railway (WLER), constructed to the west of the then built-up area a little upstream from Chelsea. The second was the line of the East London Railway (ELR), running under the Thames between Wapping and Rotherhithe. The WLER was owned one third each by the LNWR and the (GWR) and one-sixth each by the LSWR and the LBSCR. It enabled LNWR and GWR trains to run into Victoria station, having crossed the Thames twice, firstly from north to south across the WLER bridge and then back northwards across the Victoria terminal’s own purpose-built bridge. The SER’s two main competitors for traffic to and from points south and south-east from central London (the LCDR and the LBSCR) were thus able to offer passengers ease of interchange onto the systems of the LNWR and the GWR via Victoria. A passenger wishing to travel from the west midlands or the north-west of Britain to Paris may have viewed it as a more attractive prospect to change trains by a platform switch at Victoria and cross the Channel from Dover to or Newhaven to Dieppe than to get their luggage through central London to Charing Cross or Cannon Street and use the SER’s –Boulogne route. By the early 1870s the LNWR appears to have had a close and harmonious business relationship with the LBSCR. This may have been a factor in the LNWR’s unwillingness to provide support to the Basil Woodd scheme for a direct Euston-Charing Cross link discussed earlier.

The ELR, from April 1876, was able to offer a continuous physical link between the systems of the south-of-Thames companies at New Cross and the system of the GER north of the river. As a physical connection had been established between the GER and the Metropolitan Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 23

Railway at Liverpool Street station in 1875, which could have been used for through-running (but never was),56 this meant that continuity of track was by 1876 in place to allow through- running of trains between the GNR’s system, the Midland’s and the GER’s north of central London and the SER’s system south of the river, using the ELR and its tunnel. The ELR did not, however, operate train services across its lines. It had an agreement with the LBSCR whereby that company had responsibility for running such services. The LBSCR appears to have put no particular vigour into doing so. This, combined with major overruns in cost and time in the construction of the ELR’s lines and some “unfortunate” decisions regarding its capital-raisings meant that by late 1877 the ELR was in a parlous state – unable to pay its bills to the GER (for use of terminal facilities at Liverpool Street) or to the LBSCR.

It is not clear whether, during the years preceding the SER boardroom stand-off of summer 1877, Watkin had floated any suggestions with his fellow SER directors about using the ELR’s line to give the SER through-running opportunities (and/or facilities for easy interchange) between its system south of the Thames and the systems to the north and north- east of the river. When Watkin was pressing to take control of the GER in 1876 he may well have done so. But there is no record of any such discussions in the SER board minutes, which suggests that any such “sounding-out” did not proceed to formal discussions with the full board membership.57 When Watkin’s tilt at the chairmanship of the GER, instead of paving the way for “friendly” relations between the GER and the Watkin-chaired Metropolitan Railway, served merely to confirm a continuation of the absence thereof, the ELR probably went onto the backburner in Watkin’s ambitious for the SER.

When Rawson succeeded in January 1878 in getting the two warring factions on the SER board to agree to a cessation of hostilities he probably believed that he had obtained a commitment from Watkin in regard to his future modus operandi as combined chairman and chief executive officer of the company. The wording of Rawson’s December 1877 document quoted earlier suggests that what Rawson believed Watkin had agreed to consisted of three parts: (a) where Watkin had reached a view that the SER should take a particular course of

56 Barker and Robbins (op. cit., p. 228) state “The junction was never used for regular traffic on to the Great Eastern system because the two companies could not agree on through fares”. 57 Alan Jackson, discussing the lack of harmony in 1875-76 between the Metropolitan and the GER over the use of the physical connection between their systems at Liverpool Street wrote: “Watkin’s preference was to run Metropolitan trains through to south London via the East London Railway, but the GER quite reasonably objected to this as it would have involved crossing all the approach tracks at Liverpool Street on the level .… The discussions ran into sand”. (Alan A. Jackson, London’s Metropolitan Railway, David and Charles, Newton Abbot, 1986, p. 335, note 9.) Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 24

action to advance its shareholders’ interests he would provide a “full and frank explanation” of his proposal(s) and his reasoning to his board colleagues; (b) there would be a full and frank discussion at board-level; (c) what the board resolved regarding such proposals the chairman/CEO would implement. It is reasonably clear that when a new opportunity to use the ELR as the SER’s route to the north emerged through March to May of 1878 (this one not requiring GER cooperation), Watkin chose to press forward using a quite different modus operandi: namely using the technique of an appeal to SER shareholders to provide him with a mandate to implement the proposals he viewed as being in their best interests. Once such a mandate were secured it would then be in Watkin’s eyes the duty of the company’s directors to provide cordial support to him in implementing those proposals.

Rawson probably felt highly aggrieved that the modus operandi he believed had been agreed to in December/January appeared to be being totally ignored by Watkin in the case of his new proposals for the SER to use the ELR to connect northwards. It will be argued later in this paper that for Rawson at least it may have been less a matter of this initiative itself as the manner in which Watkin chose to pursue it, that led to his taking such a vigorously anti- Watkin stance during the second phase of outright hostilities at the SER board.

On 15 July 1878 Watkin issued a circular to SER shareholders. The SER’s board minutes contain nothing to suggest that either the circular itself or its contents were discussed at board level before it was sent out, although Watkin did later claim that he had provided at least some form of prior warning to the board meeting of 11 July. In this circular Watkin stated:

I am ready to continue my connection with the management of your railway, or if you will allow me to, I shall be glad to be relieved in January from the heavy responsibility which is involved in that continuance …

This was followed by a section summarising what had been achieved in terms of improving the position and performance of the company over the period of his chairmanship. This in turn was followed by:

To keep and to extend that improvement in the future every effort must be made with skill and energy to widen out your connections with other lines, and especially those north of the Thames, from which you have been so long excluded. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 25

The circular ended with an invitation for the shareholder to signal whether their preference was for Watkin to stay on as chairman or to retire, by signing and returning an attached proxy form.58

Knatchbull-Hugessen’s diary entry regarding the SER board meeting of 18 July 1878 records: “very hot discussion about Watkin’s circular … Watkin at last consented (foolishly perhaps) to a paragraph in the [Directors’] Report saying that he did not mean to reflect upon his colleagues in the circular”.59 The Board minutes are silent about this. It is possible that Rawson pressed Watkin to provide a “full and frank explanation” of what he had in mind by the reference in the circular to connections with other lines north of the Thames. If so, he would not have been pleased with the result. On 22 July 1878 Watkin had Shaw send each SER director a copy of a 6-page “private and confidential document” he had prepared titled Communication between South Eastern and Northern Lines: Chairman’s Paper. This paper was what today would be called a “high-level” treatment of the subject, not containing any precise details on Watkin’s new scheme focussed on using the ELR, and not providing any discussion as to why Watkin viewed this particular scheme as superior to any alternative means of moving towards the overall end-objective. It did however contain a long segment setting forward Watkin’s views on the problems caused by certain of his fellow directors (who are individually named) having failed to embrace previous proposals put forward by Watkin to further the same objective. The essence of this segment was:

Shortly after I joined the Metropolitan Railway I proposed the idea of a union of the South Eastern and Metropolitan Railways, and a committee consisting of myself, Mr Rawson, Mr Mellor and Mr Buckley was appointed …. I do not hesitate to say that the inability of Messrs Mellor, Rawson and Buckley to absorb the idea has deprived the [SER] of benefits which, capitalised, are understated by the amount of £1 million. I sincerely trust that the mistake as to the Metropolitan will not be repeated – owing to want of knowledge and personal jealousies – in the case of the East London.60

58 The circular was reproduced in full (except for the proxy form, unfortunately) in Herapath’s, 20 July 1878, pp. 814-5. In his address to the SER’s half-yearly general meeting held 25 July 1878, Watkin said: “I told the Board on the 11th of the month that it was my sincere desire, and I tell you now, to retire from the chair of this company in January next”. (RAIL 635/11; 84th half-yearly meeting, page 9.) 59 Knatchbull-Hugessen Papers, U951 F25/30, entry for 18 July 1878. 60 This document was tabled at the SER Board meeting of 8 August 1878 and appears in the board minutes RAIL 635/46 following page 246, minute 442. The quoted three sentences are taken from pages 4,5 and 6 of the document, the final sentence being the document’s “finale”. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 26

If Watkin feared that “want of knowledge and personal jealousies” would be likely to generate majority opposition to him on the SER board in this case of his new ELR proposal that may explain why he was not prepared to go down the “full and frank explanation” route, and preferred instead to make an appeal to the shareholders over the heads of the (potentially) recalcitrant directors. Watkin’s first step in making that appeal was his circular to SER shareholders dated 15 July 1878. The date he’d settled upon for following through with that appeal was 25 July 1878, the day of the SER half-yearly general meeting. Watkin appears to have taken pains to provide those he perceived as his opponents with only very limited time to comprehend what he was doing or to mount countermeasures. Under these circumstances, Knatchbull-Hugessen’s diary entry on the SER board meeting immediately preceding the company’s general meeting will come as no surprise: “Unpleasant Board”. This is preceded by Knatchbull-Hugessen describing his attempts to catch Watkin before the start of that meeting: “being anxious to prevent his making personal attacks on Rawson”.61

The situation at the ELR had shifted substantially between the end of February 1878 and early July 1878. The directors’ report to the half-yearly meeting held 27 February read;

The Directors are unable to report any material improvement in the position of the company during the past half year …. Debenture interest: The directors regret their inability to pay any portion of this interest …. At present the Brighton company [LBSCR] retain the whole of the earnings [from running services over the ELR’s lines] against claims for works …62

In April 1877 the ELR’s directors had appealed to the Railway Commissioners for action to compel the LBSCR to improve the provision of services over the ELR’s line. On 2 July 1877 the Railway Commissioners issued their judgement. It was that as the LBSCR were already complying with the Commissioners’ order issued the previous year “there will be no order from us”.63 The legal costs incurred by the ELR’s directors had thus achieved nothing, except probably a further deterioration of relations with the LBSCR. Such of its bills as the ELR was able to pay, the directors did so by issuing new preference shares in the company at a massive discount to face value. Large lines of £100 nominal shares were issued at £24 (i.e., 76 per cent discount), with the ELR’s financial agent “Baron Grant” pocketing over 13 per cent of

61 Knatchbull-Hugessen Papers, U951 F25/30, entry for 25 July 1878. 62 TNA, RAIL 178/1 (East London Railway Co, Minutes of General Meetings), p. 153. 63 ibid, p. 148. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 27

each £24, leaving the company with less than £21.64 This was gobbling up the company’s parliament-authorised power to issue new share capital but not giving the ELR anywhere near the money parliament had been persuaded the company needed when providing that authorisation. Failure to pay interest on the ELR’s debentures meant that the company’s debenture holders were in a position to take court action to remove decision-making powers from the company’s board, and put those power in the hands of a court approved receiver, should they believe that necessary to protect their interests.

When the ELR chairman, William Hawes, moved the acceptance of the directors’ report and the accounts at the 27 February 1878 ELR meeting, a shareholder moved an “amendment” that they not be accepted but instead be referred to a committee of shareholders for investigation and a further report. That amendment was passed by 41 to 15 on a show of hands. Hawes was able to overturn that by a threat to use proxies that he had been given, but the days of the “old guard” on the ELR board were clearly numbered.65 Herapath’s reported on 4 May: “Mr Hawes has resigned the chairmanship of the ELR, … and Lord Alfred Churchill has been selected by the Directors to take the chair”.66 Churchill had been elected a director of the ELR in 1876. His role appears to have been to give the company’s debenture holders a voice on the board. It was later revealed that he had tried to block some of the worst of the company’s financing arrangements made with Grant but had been in a minority of one on the ELR board in that regard. On 25 May 1878 Herapath’s reported;

With reference to the rumours afloat during the week as to the reorganisation of [the ELR] Board, we have made inquiries and believe …. Sir Edward Watkin has consented to join the ELR Board and to become chairman of the company, the Board to undergo reconstruction.67

For Watkin’s colleagues on the SER board other than Knatchbull-Hugessen, Whatman and Withers, it may well have been from reading Herapath’s or from hearing the rumours referred to in that 25 May article that they became aware that the ELR had come off the backburner in Watkin’s thinking – rather than from Watkin providing any information to them himself. And the heated reaction among those same SER board members to Watkin’s 15 July circular to

64 ibid, p. 158. The ELR’s “financial agent” from 1872 was Albert Grant, often referred to as “Baron Grant”. The dimensions of his commissions were not revealed to ELR shareholders until the end of June 1878. 65 Herapath’s, 9 March 1878, p. 286. 66 ibid, 4 May 1878, p. 503. 67 ibid, 25 May 1878, p. 593. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 28

SER shareholders probably derived some of its intensity from their knowledge of the approach to board-composition he had pursued at the ELR. On 3 June Watkin issued a circular to ELR shareholders stating:

At the unanimous request of the larger holders of your bonds and stocks I have made an agreement with your Directors to give your company the aid of my advice and experience … I have also been asked to nominate provisionally a majority of the proposed board and to take the chair. I have accepted that responsibility as a temporary measure [to be subject to confirmation at the ELR’s next general meeting].68

On 29 June a four-page report on the ELR was sent by Watkin to that company’s shareholders giving them the names of the new directors he had nominated and providing an outline of his diagnosis of the company’s ills and his prescription for ameliorating those ills. He saw as the primary source of the ELR’s parlous financial situation the terms and conditions of the agreements the company had made with the GER for the use of Liverpool Street as its city centre terminal, and with the LBSCR for running train services over the ELR’s lines into that terminal. He said:

Certainly, no such agreements as these two … were ever before made by anybody in my experience. And suicidal as they are they have been worked and interpreted in a manner which seems to me untenable and therefore demanding relief, not for your interests only, but in the interests of the travelling public and the other railways and towns south of the Thames …. I shall endeavour by an appeal to the Boards of [the LBSCR and the GER] to arrive at an amicable arrangement …69

But Watkin’s prescription contained more than simply appealing for clemency to the GER and LBSCR. He proposed also to take steps that would give the ELR a means of bypassing the use of Liverpool Street and the GER. Once achieved this would give the ELR the opportunity to negotiate with the LBSCR’s two south-of-Thames rivals, the SER and the LCDR, about those companies running train services over this new bypass. This part of the prescription was described only in skeleton form:

68 This circular was reproduced in full in The Times of 3 June 1878, and in Herapath’s on Saturday 8 June, p. 647. 69 TNA, RAIL 178/1. The report is inserted in this volume following page 158 (see paragraphs 6 and 15). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 29

I am discussing preliminary arrangements with the Metropolitan and Metropolitan District Railways by which a physical junction between your line and the great metropolitan systems may be part of the proposed scheme for completing the Inner Circle.70

The chairman of the Metropolitan District Railway (MDR), J.S. Forbes, was also chairman of the LCDR. Hence, he also had a dual motive for co-operating in this scheme to provide physical facilities for the through running of trains between stations on the “Inner Circle” and the ELR without any need for GER co-operation. Discussions between Watkin and Forbes about the Metropolitan and the MDR cooperating together to complete the Inner Circle had commenced in December 1877. Exactly when Watkin raised with Forbes the suggestion of adding a link with the ELR to this plan is not clear. Up until 14 May 1878 the engineers engaged by Watkin and Forbes to work on planning for the project, Sir John Hawkshaw and John Barry, were working on “Inner Circle Completion” only. It was on 14 May that Watkin and Forbes asked them to quote for the additional services involved in extending their work to include the ELR link. On 22 May 1878 Watkin obtained approval from the board of the Metropolitan Railway for a “Proposed Physical Junction with ELR” to be added to the scheme to be promoted in the next session of Parliament.71

Clearly Watkin had put a lot of effort into his proposals for a rescue plan for the ELR since being approached by Lord Alfred Churchill, probably sometime during March 1878. That in itself would have been a source of annoyance to those SER directors who believed Watkin’s £2,500 p.a. from that company meant he was not supposed to undertake additional responsibilities outside the SER without board approval. Such annoyance would not have been diminished by their finding that Knatchbull-Hugessen and Whatman were among Watkin’s nominees for positions on the reconstructed ELR board. An extraordinary general meeting of ELR shareholders was held on 9 July 1878. It endorsed Watkin’s recommendations for the membership of the Board, as well as his proposals for tackling the company’s problems. Whatman and Knatchbull-Hugessen both attended that meeting.72 Knatchbull-Hugessen was expected to work for this new stream of director’s fees. He was immediately appointed by Watkin to chair a committee of investigation into the ELR’s various capital-raising arrangements made with Grant by the company’s old board. Whatman

70 ibid, paragraph 16. 71 London Metropolitan Archives (LMA), Acc 1297/MET 1/8 p. 437-8 and 465-8. 72 TNA RAIL 178/1, p. 158. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 30

was also appointed to that committee, along with Churchill and two ELR shareholders not on the board. But for Whatman, sixteen years older than Knatchbull-Hugessen, his new stream of director’s fees was probably viewed by many as being more in the nature of a reward for past loyalty to Watkin at the SER.73

Watkin’s own remuneration arrangements for his ELR work, under the agreement with Churchill signed-up to on 2 May 1878, were not disclosed to ELR shareholders at that 9 July extraordinary general meeting. That information was therefore not available for Watkin’s critics to use in argument against him at the SER half-yearly general meeting held 25 July 1878. Once that meeting was safely out of the way and Watkin had secured his “vote of confidence” from the SER shareholders, the ELR remuneration arrangements were disclosed to ELR shareholders, who “approved and confirmed” them at that company’s half-yearly general meeting held 6 August. The agreement was a four-year one with Watkin to be paid £2,000 p.a. plus an up-front retaining fee of £2,000 and the possibility of an additional £2,000 bonus.74 Assuming satisfactory performance, the annualised total was £3,000 p.a., a figure 20 per cent above Watkin’s remuneration from the SER. To quote Hodgkins:

His opponents on the SER quickly focussed on his total remuneration of £12,000. There was no formal notification of this to the SER board and it was the question of Watkin’s role with the ELR, combined with the SER’s relationship with it, which was the principal cause of conflict between Watkin and the SER board.75

The ELR question undoubtedly did loom steadily larger in the conflict as that conflict intensified during the second half of 1878. But at the SER’s half-yearly general meeting held 25 July, remarkably little mention was made of the ELR, despite tensions already being high between Watkin and his SER critics by that stage. Watkin’s chairman’s address to the meeting was lengthy and consisted largely of an amplification of or “personal explanation” of the contents of his 15 July circular to SER shareholders. In the course of this he revealed that

73 James Whatman (1813-1887) was great grandson of the innovative paper maker James Whatman (1702-1759) and grandson of James Whatman the Younger (1741-1798), who further developed that business. The family appears to have withdrawn from business during the next generation (Whatman’s father’s). Whatman was educated at Eton and Oxford. He owned land near Maidstone and represented Maidstone in parliament from 1852 to 1857 and from 1865 to 1874 (Liberal). He had been a director of the SER prior to Watkin’s arrival at the company and had stood down in January 1865 to create a board vacancy for Watkin. He was re-elected to the SER board in February 1866. (See Hodgkins, op. cit., pp. 262-3 and p. 274 for more detail on this 1865-66 period.) 74 TNA RAIL 178/1, p. 164 and The Economist, 10 August 1878, p. 956. The bonus was to be paid at the end of year four, if approved by a resolution at an ELR general meeting. 75 Hodgkins, op. cit., p. 464. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 31

his invitation for proxies had led to him receiving more than 4,000, representing “nearly 83,000 votes”. Shortly after he had moved that the report and accounts be received and adopted (seconded by Byng), Mewburn rose and proposed “an addition” to that motion, seconded by Maclure:

And that the cordial thanks of this meeting be tendered to Sir Edward Watkin for his long and valuable services, and that he be requested to continue his connection with the undertaking in full assurance of the confidence and support of his co- proprietors.

Most of the remainder of the meeting was comprised of a discussion of that amendment: of its merits per se, of its propriety as an “amendment”, and as to how its passage should be interpreted by Watkin’s colleagues on the board. No doubt to “help” the potentially recalcitrant among those colleagues get the message, Watkin said, in putting Mewburn’s words as a separate motion:

… he recognised two things – that the [directors] must be elected by the proprietors and the chairman by his colleagues and that if he found that his colleagues did not act to him as he thought right for the interest of the company his duty would then be to appeal to the shareholders upon that point. That day he should accept the compliment in the light that, in spite of the slanders going on, he still retained the confidence of the great body of the proprietors.76

Mewburn’s resolution was passed on a show of hands with only four “dissentients”, none of whom were SER directors. Rawson had already stated his views on the duties of a company’s directors: “they will take instructions from nobody, but they will do what they deem right … Whenever there is a necessity to say anything about our Chairman, we shall not be afraid to say it”.77 Watkin’s critics on the SER board appear to have been happy for Rawson to speak for them collectively. And they appear to have decided that they didn’t need to vote against Mewburn’s resolution to signal their intention to stand up for their convictions regarding company governance. A pro-Watkin shareholder called for a poll so that Watkin’s proxies

76 Railway Times, 27 July 1878, p. 632. Perhaps interestingly, the pro-Watkin Herapath’s omitted these statements in its report on the meeting (Herapath’s, 27 July 1878, pp. 833-838 and 850-851). 77 Herapath’s, 27 July 1878, p. 851. This Herapath’s report states there were two dissentients. The official SER minutes of the meeting state four and give their names (RAIL 1110/425, p. 995). One was Samuel Fielden, older brother of Joshua Fielden the SER board member. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 32

could be counted and put on the record. This time there were nil shareholders against to 4,012 for, these holding £6,357,394 of stock with 82,219 votes.78

In his chairman’s address, Watkin had repeated the advice to SER shareholders “and to the Board” contained in his circular:

… that you should obtain by every available means of access as [the LCDR and the LBSCR] have, access to the lines north of the Thames and access to the 75,000,000 passengers passed over the metropolitan systems of railway.

And he concluded his address by returning to that theme.79 But he never once mentioned the ELR. A shareholder from the floor picked up on this saying:

The chairman has not made any reference in his speech to the communication by means of the ELR; but I suppose … he has some idea of making use of that for [the SER] instead of leaving it entirely as a question of the [LBSCR].

This was Mr Jennings, who was evidently quite enthusiastic about this idea. But Mr Adams was not, saying:

I do not think it is at all a proper proceeding to take, for South Eastern Directors to be on the [ELR] Board, and consequently, as we have seen already, fighting with the [LBSCR].80

The fact that Rawson said “Our Chairman has today stated nothing to which I can object”81 seems to suggest that he was not antipathetic to the objective of better SER links to the north- of-Thames systems and that he was happy to engage in discussions as to the pros and cons of tangible proposals designed to further that objective.

The main criticism of Watkin at this meeting came from Rokeby Price, a stockbroker, and Charles Burt, a lawyer – each holding £500 of stock, recently transferred into their names. They appear to have been brought in as “spokesmen” for those wishing to see Watkin toppled from the chair of the SER. Rokeby Price had spoken against Watkin at GER meetings when Watkin was trying to take control of that company. Burt, according to Watkin, was an

78 TNA RAIL 1110/425, p. 996. 79 Herapath’s, 27 July 1878, p. 996. 80 ibid, p. 850. 81 ibid, p. 851. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 33

associate of some parties he had clashed with during the Erie reconstruction.82 But Mewburn and Maclure appear to have come to the meeting prepared for such interventions by “ring-ins” possessing rhetorical and legal skills. Upon Rokeby Price completing his contribution, the next speaker was Henry Hartley Fowler. Fowler (1830–1911) does not appear to have spoken at any previous SER general meetings, although he had been a shareholder in the company (on a modest scale) for a number of years. Like Mewburn he was a leading layman in the Wesleyan Methodist Connexion. The two knew one another well. Fowler was the senior partner of Mewburn’s son-in-law R.W. Perks in the London legal practice Fowler and Perks. Fowler was highly respected as a public speaker. Mayor of Wolverhampton in 1862 (the youngest mayor in England), chairman of the Wolverhampton school board 1870 to 1873, he entered parliament in 1880 and later became a cabinet minister in Liberal governments. His Oxford Dictionary of National Biography entry credits his greatest speech as having achieved that very rare feat of “altering the outcome of a parliamentary vote”.83 Fowler was not at this stage on the board of any Railway company, but he was a director of the Railway Rolling Stock Company.84

Fowler’s speech to the SER’s 25 July 1878 general meeting is worth quoting from. Its key themes would have been carefully prepared and would almost certainly have received prior approval from Mewburn and Maclure, who themselves spoke only very briefly at the meeting.

The question really for the South Eastern’s proprietors at the present crisis is not the variety of infinitesimal details as to the internal management of the Board, but the main question is: Has the chairman the confidence of the proprietors as a whole? You may criticise individual points …. Every miserable slander that every miserable calumniator can bring against him has been brought … the

82 The climax to Watkin’s tilt for control of the GER came at that company’s extraordinary general meeting of 5 October 1876. Rokeby Price, speaking against the motion that … “the present board of directors should resign office”, referred to Alfred Watkin having become a director of the Metropolitan railway and asked “Are we to have such nepotism as that …?” His broadside against Watkin also included references to the SER. See Railway Times, 7 October 1876, p. 894. Charles Burt was one of the scrutineers for the GER directors in the poll held on that motion (Railway Times, 14 October 1876, p. 931). At the declaration of the poll result, Rokeby Price said he had “hoped, Sir Edward Watkin not being present, they might have received his resignation [as a director] by telegraph” (ibid, p. 932). Regarding Burt and the Erie construction see RAIL 1110/425, p. 994. 83 Timothy Larsen, ‘Fowler, Henry Hartley, first Viscount Wolverhampton’, Oxford Dictionary of National Biography, vol. 20, pp. 580-582. Fowler’s name appears in the list of those allotted SER shares in the company’s 1876 issue of ordinary consolidated stock (RAIL 635/507 page 92). As that was a “rights” issue offered only to the company’s existing shareholders (see RAIL 634/45 p. 2, minute 2) this indicates Fowler was already a registered SER shareholder by September 1876. 84 Bradshaw’s Railway Manual, Shareholders’ Guide and Directory, 1878, page 587. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 34

Proprietors have declared … that it is their desire and wish that Sir Edward Watkin shall retain the chair of this company, and be practically its prime minister … from such a verdict as that there is no appeal … it must be accepted, at all events for the present, not only by the Proprietors but I venture to say with all respects, by the Board and all sections of the Board.85

The SER’s official transcript of the meeting records Fowler’s speech being received with “cheers”, but these were presumably from not everyone in the room. Burt’s view was the Mewburn’s amendment had “nothing to do” with the objects of the meeting as set out in the notice of the meeting and was therefore “quite outside the powers of the meeting”. Under that interpretation it was open to any board member to choose not to accept it as a verdict from which no appeal was possible. Burt concluded:

It is only intended if possible to forestall the decision of the Shareholders when they are properly called together for the purpose of electing directors … it can have no legal effect, and its only moral effect will be to show that Sir Edward Watkin who is exceedingly clever, has taken an advantage of this colleagues and stolen a march on them.86

Among those who had cheered Fowler’s speech, there must have been many who would actually have agreed with these concluding words of Burt’s. Mewburn’s resolution, Fowler’s rhetoric and the volume of proxies that Watkin had been able to secure from his threat to retire as chairman were warning shots to the eight members of the SER board that Watkin by this stage viewed as unreliable. They could heed the warning and desist from putting barriers in the way of initiatives viewed by Watkin as being in the best interests of the company’s shareholders. Or they could expect a battle to retain their seats on the board. Here there was a subtlety in the threat. It was open to Mewburn and Maclure to mount a “requisition” for an extraordinary general meeting before the company’s next half-yearly general meeting, and require a “spill” of all the seats on the board – turning up the heat on all eight. Alternatively, Watkin’s supporters could hold their fire until the next half-yearly general meeting when the battle to retain their seats would be focussed on the three of the eight up for re-election. For five of the eight therefore there may have been self-interest reasons for wishing to postpone an immediate resumption of full-scale hostilities. And Watkin himself may also have seen

85 RAIL 1110/425, p. 992. 86 ibid, p. 993. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 35

potential benefits in a period of “phoney war”. At the GER the tactic of a requisition for a full spill of the board had not worked out as well as he had planned. Here on the SER, a win in all the seats coming up for re-election would be sufficient to give him a board majority, and would take out “the leader of the opposition”, as Rawson now clearly was. And thirdly there was the fact of Watkin’s dual position as chairman and CEO. Deft use of this position had the potential to starve the directors Watkin regarded as unreliable of information about his initiatives and actions, and to make it difficult for them to formulate and pass board resolutions that Watkin could not later criticise as based on their ignorance, or reflecting their jealousy of him.

The SER’s general meeting of 25 July 1878 made it fairly clear to outside observers of the company that the cessation of hostilities among its board members that had been announced the previous December had largely unravelled. But the fact that Watkin had agreed to the paragraph in the Directors report saying his circular had not been intended to reflect upon his colleagues, combined with Rawson’s telling the meeting that there was nothing in Watkin’s address to the meeting that he objected to, allowed both sections of the board to maintain the public façade that fundamentally all was in sound working order. The Economist was more frank:

The South Eastern meeting yesterday was a painful affair, for it shows clearly that in spite of official paragraphs to the contrary, the members of the board are not upon friendly terms. It would seem as though some change or changes will have to be made at no distant date.87

From the end of July until the end of November 1878 however, little new information regarding the “progress” of relations on the SER board was fed out by either side into the public domain. Knatchbull-Hugessen’s diary entries give some idea of the tenor of relations during this period:

[7 August] dined with Withers and Sir E. Watkin – we two trying to persuade Sir E. to be moderate at the Bd tomorrow and not provoke strife … [5 Sept] SER Board – Most unpleasant – Sir E. Watkin and Mellor at loggerheads …

87 The Economist, 27 July 1878, p.891. For evidence that the press had been informed of the cessation of hostilities the previous December see the lead editorial (headed “South Eastern”) in Railway Times, 29 December 1877, p. 1146. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 36

[19 Sept] 9.30 to London Bridge where a stormy Board lasted till near 2 – no particular result …88

But perhaps the entry for the 31 October board meeting is the most telling: “quiet, peaceful and business-like meeting”. By this stage that appears to have become sufficiently rare to warrant noting.

The SER board minutes for this period suggest that much of the “unpleasantness” arose from the process of anti-Watkin directors seeking access to the company’s records to obtain various information, from Watkin putting barriers in their way and from those directors then seeking to assert their rights to such information. The types of information sought range from what seems clearly to be additional ammunition regarding battles already in progress (for use in defence as well as in offence) to other less-clearly specified types which might have been “fishing expeditions” or which might have been totally legitimate attempts to become better- informed regarding the company’s functioning and the nature of its existing and potential traffic. At the 22 August board meeting, formal approval was given that the manager/secretary should supply Mellor with eight specified documents. By 5 September Mellor was signalling he wanted a board resolution requiring the company’s officers to disclose any (and all) information when requested to do so by any director. But two weeks later this had evolved further to:

The Board now records its opinion that the chairman has no authority to restrict or prevent any director from examining or searching into or making any extracts from any Books, papers, or other documents relating to the business of the company.89

The resolution eventually passed by the board on this matter (on 17 October) was somewhat less confronting towards the company’s chairman, but nevertheless sought to paint Watkin out of a blocking ability via his capacities as CEO. Proposed by Buckley, it read

That any member of the Board has the right to inspect all or any Books and papers of the Company on applying through the Secretary or other officer who is responsible for the safe custody of the Books and papers.90

88 Knatchbull-Hugessen Papers, U951 F25/30 (entries for dates cited). 89 TNA, RAIL 635/46, p. 329, minute 532. 90 ibid, p. 371, minute 653. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 37

Watkin’s riposte to contain the effects of the passage of this resolution was to give notice of motion for a resolution regarding the “irregular publication of matter of a privileged character” (i.e., of the type which a board member might obtain by this process). The key sentence in Watkin’s foreshadowed motion was

That the divulgence of any private or privileged information by any Director or Officer of the Company would render it the duty of the Board to dismiss any such officer and to request any such Director to tender his resignation.

This is followed by a sentence establishing a board committee to investigate the leaking to the press of the board censure of Watkin of 6 September 1877 – with Knatchbull-Hugessen, Withers, Rawson and Byng as its membership.91 Watkin later “postponed” moving this motion and does not appear to have pressed it further. There were other disputes in progress during this July to November period but the evolution of this one strongly suggests that by this stage both sides in the SER board room were obtaining expert legal advice on the governance issues pertinent to the struggle. The Buckley wording is much sounder legally than the earlier wording proposed by Mellor. And it seems probable that Watkin was advised that he would be on very shaky ground legally if he opposed Buckley’s resolution or failed to implement it, but that it was legitimate for him to raise the issue of misuse of privileged information.

It was during the week beginning Monday 16 December 1878 that press reports appeared to the effect that full scale hostilities had resumed on the SER board. It was the Daily News which broke this story first. And the lead editorial in the following Saturday’s issue of the anti-Watkin Railway Times asserted that the story had been planted there via Watkin’s legal adviser. It referred to the Daily News as:

… by the influence of a legal firm of great reputation in the city of London, may be presumed to possess exclusive means of authentic information on matters in which [Sir Edward Watkin] is concerned.

This editorial later states “Sir Edward’s legal friend … seems to combine together the character of client and adviser”. But – as one would expect – the Railway Times refrains from

91 ibid, p. 370-371, minute 652. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 38

naming that legal adviser.92 The question of whether it was R.W. Perks will be discussed in a later section of this paper. For the present, it is interesting to look at what triggered this decision by Watkin to “go public”. It was probably in part because his legal adviser had told him that his opponents on the SER board had taken actions which it was within his legal rights to challenge head-on.

It was at the SER board meeting of 12 December 1878 that the anti-Watkin directors acted to escalate hostilities substantially. The fuse for this had been lit by Rawson at the meeting of 28 November. The parliamentary timetable was ticking down on what action the SER should take regarding Bills to be promoted by other railway companies in the 1879 session of Parliament. Rawson argued that any director of the SER who was also a director of the Metropolitan Railway or the ELR should not be a party to the decision-making within the SER regarding whether the company should support or oppose Bills promoted by the Metropolitan or by the ELR.93 A resolution proposed by Beattie was passed calling for steps to be taken to protect the interests of the SER “in every case [of a Bill promoted by another company for the 1879 session] which may appear to be prejudicial to the Company”. A resolution moved by Mellor and seconded by Rawson was then passed to call a special board meeting “to consider the expediency of appointing a committee for the purpose of carrying out the object of Mr Beattie’s motion passed by the board today”.94 At the Board meeting of 12 December 1878, a resolution was passed following through on this:

… considering the serious nature of the proposed extension of the Metropolitan line … as affecting the interests of the [SER], the Board deems it expedient to appoint a committee of those Directors of the company and not Directors of any other companies other than those of the SER system with full powers to do all things which they consider necessary and to adopt all such measures as they deem advisable in the interests of the company.95

This wording went further than excluding Watkin, Knatchbull-Hugessen and Whatman from this powerful new committee. It also excluded Withers, whose board seat on the MS&LR could hardly be regarded as constituting a conflict of interest regarding SER decision making

92 The Railway Times, 21 December 1878, p. 1070. This editorial does not name the Daily News either, but from the quotes it uses it is clearly the Daily News that is being referred to (see Herapath’s 21 December 1878, p. 1393). 93 Knatchbull-Hugessen Papers, U951 F25/30, entry for 28 November 1878. 94 TNA, RAIL 635/46, p. 433, minute 768. 95 ibid, p. 438, minute 777. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 39

on Bills promoted by the Metropolitan Railway or the ELR. Clearly his exclusion was based on the expectation that he would constitute a channel of information to Watkin on the committee’s activities. When this committee comprised of the eight anti-Watkin directors met, it did so without the company’s secretary and manager, Shaw, being present and appointed Beattie to be minute taker. The apparent intention of this was to keep these minutes away from perusal by any of the excluded SER directors. It was on 19 December that Watkin discovered that this was how the committee had chosen to operate.96 Watkin probably did not need to consult his legal adviser to see that it would be in direct contravention of the board resolution of 17 October moved by Buckley, if Beattie were to deny access to the committee’s minutes to the four excluded SER directors. But Watkin may have needed legal advice on the question of whether Shaw being denied custody of those minutes was itself an impropriety.

Clearly the actions of the anti-Watkin group on the SER board in establishing this board committee on this basis represented a major escalation in the conflict. There are two possible interpretations of why they chose to do that at this particular time. One is that the timing was driven primarily by the parliamentary timetable. The Metropolitan Railway and the MDR had lodged their notice for a joint Bill to be promoted in the 1879 session on 13 November, and the ELR lodged its notice on 14 November. Each notice gave a summary of the “purposes” of the proposed Bill and each stated that printed copies of the actual Bill would be deposited at the Private Bill Office of the House of Commons on or before the deadline of 21 December.97 There would then be a limited time for the SER to determine whether the company should lodge a petition against the Bills, and (if so) to arrange for its grounds for objection to be drawn up with due legal formality.

The second interpretation is that the timing was driven primarily by the company’s own timetable regarding its next half-yearly general meeting. The SER’s established practice was that this general meeting should be long enough after 1 January to allow the half-year’s accounts to be finalised and an appropriate level of dividend to be recommended, but not so long after 1 January that the shareholders became impatient about the payment date for the dividend. This had meant that holding the general meeting in the final week of January or the first ten days or so of February had come to be the norm. But the setting of the date for this

96 ibid, p. 456, minute 821. 97 See The London Gazette, 22 November 1878, pp. 6427-6430 and 26 November, pp. 6623-6624. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 40

particular SER general meeting involved a further consideration. The day on which the decision was made regarding the date of the general meeting could reasonably be expected to become day one of the election campaign for the four board seats. If the anti-Watkin group of directors wanted to make “conflicts of interest” regarding the ELR and the Metropolitan an important plank in their election platform they would need to have their case ready for use before the SER board agreed to fix the general meeting date. That in turn meant they had to move rapidly once information on the contents of the ELR and Metropolitan Bills for the 1879 session became available to them. It would be a presentational advantage for the anti- Watkin group if the SER board had passed a resolution identifying problems for the company in the ELR and Metropolitan Bills before the date of the general meeting was announced and the election campaign had begun, rather than after.

At the SER board meeting which established the “Committee on Parliamentary projects and schemes affecting the S.E. Company”, Watkin tried to fix the date for the half-yearly meeting but was voted down. By the time the full board met again, on 27 December, the Committee had produced its report:

The Committee deems it to be incompatible with the interests of the S.E. Company that the chairman and some members of its Board should also be directors of companies which may be antagonistic to the S.E. This incompatibility is greatly increased where the chairman of the Board of this company is also the chairman of the ELR. Under these circumstances it has been felt to be a grave difficulty to have freely to discuss questions relating to Parliamentary proceedings with gentlemen who have a duty to perform to other companies whose interests may not be coincident with those of the SER.

Beattie, seconded by Byng moved the adoption of this report. An attempt by Withers to delay matters was defeated 7-4 (Fielden was not present) and the report was adopted. When Watkin moved to fix the date of the general meeting (for 30 January 1879), Buckley seconded by Byng succeeded with their amendment to delay doing so – again by 7-4. A third vote of 7-4 passed the resolution:

That the chairman having made repeated attacks upon some of his colleagues during the past half-year and at various times when differing from the majority threatened to appeal to the Shareholders … this Board emphatically condemns such a course of proceeding and appoint the following gentlemen a committee to Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 41

address the Shareholders on behalf of this Board and in its name to take all other such proceedings as they may deem necessary to maintain the independent authority of the Board.

This resolution of censure was Rawson’s. Curiously the seven-man membership defined for this new committee excluded Mellor (it included Fielden) although Mellor voted in favour.98 As Mellor had already launched a libel action against Watkin, that may be the explanation for this.

Of those three votes lost 7-4 by Watkin at the 27 December 1878 board meeting, the first two suggest the anti-Watkin directors succeeding at using their numbers to prepare ammunition for the imminent board election campaign whilst continuing to delay the firing of the starting pistol for that campaign. But Watkin had in fact moved pre-emptively against his opponents on the preceding day (26 December) on that second matter, and Rawson’s censure resolution was prompted by that. Watkin met with his legal adviser R.W. Perks on 26 December. They drew up a document (couched in the third person) in which the SER chairman states that the proceedings of the Parliamentary bills committee are “secret and exclusive and that the minutes … are proposed to be taken and kept in an unusual and illegal manner”. Two other improprieties are described. The document continues:

Protesting against the unwise, uncalled for and illegal proceedings described, the Chairman proposes to convene meetings of proprietors at Manchester and Liverpool and afterwards at other places, to which he invites the attendance of the gentlemen who oppose the policy he recommends.99

This document had gone to the board members on 26 December. Watkin sends three messages in it. First, he will not passively submit to his opponents delaying the start of campaigning for the board election until a day of their own choosing – even if that delay does mean he cannot start distributing printed proxy forms on his own day one.100 Second, he will

98 TNA, RAIL 635/46, p. 453-458, minutes 820 and 821. 99 loc. cit. Perks and his wife had Christmas dinner at Mewburn’s house in Banbury. He then met Watkin in London at 6pm and the two spent the following morning working together. See R.W. Perks, op. cit., pp. 63-64. 100 It appears that to be legally valid a proxy for the board election needed to specify the date of the general meeting at which it was intended to be used. In a circular to SER shareholders dated 1 January 1879, Watkin stated: “Mr Byng and other of the directors have twice over vetoed the early fixing of the half-yearly meeting, thereby preventing … independent candidates from obtaining proxies”. (Railway News, 4 January 1879, p. 5.) Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 42

not submit to their claim to the moral high ground on the matter of ethical standards. And third, they will need to explain to the SER’s shareholders why what they proposed to do regarding the future development of the company’s traffic is superior to his proposed use of the ELR–Metropolitan link. Watkin’s “private and confidential” memo of 22 July 1878 had sounded a prior warning on this third matter. Rawson’s preference might be to argue the ELR point purely on “conflict of interest” grounds. But Watkin’s response would be to question how a board committee comprised of men largely ignorant of the nuts and bolts of railway management, and arguably motivated by personal animosity towards him, could be relied upon to come up with (and implement) a traffic development policy for the SER superior to the one he was advocating.

The two other improprieties Watkin raised in his 26 December document were: (a) removing a quantity of the company’s envelopes, “the property of the company … for the purposes of a section of the Board”; and (b) Rawson instructing a company employee, without informing Shaw, to make a list of shareholders with holdings above £5,000 and deliver this list to the private residence of Byng. According to Watkin this latter action occurred on 21 December and was “for the purpose of a private canvass with the double object of aiding the re-election of Messrs Bibby, Buckley and Rawson and preventing [Watkin’s] re-election as chairman.”101 If Watkin was correct about that date, it does lend support to the interpretation that the timing of the establishment of the board committee on Parliamentary projects etc. had more to do with the SER’s board election timetable than with the Parliamentary Bills timetable.

The position on the SER board as December 1878 drew to a close was thus that the “ceasefire” brokered by Rawson twelve months earlier had now broken down completely. Watkin had been explicitly censured by a resolution passed by a majority of the board. Upon careful inspection the grounds of the December 1878 censure, as stated in the resolution itself, are essentially the same as those of the September 1877 censure: dissatisfaction with Watkin’s behaviour towards his board colleagues when a majority of the board dissent from, or are opposed to, the course of action favoured by Watkin on an issue. All who were dissatisfied enough to vote to censure Watkin in September 1877 were still of the same view in December 1878, and the weight of their opposition had strengthened by Rawson moving solidly and pro-actively into the anti-Watkin camp, and through the board vacancy of late 1877 being filled by Surtees, the nominee of the anti-Watkin grouping. In short, eight of

101 loc. cit., and RAIL 635/46, pp. 457-8. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 43

Watkin’s colleagues on the SER board were dissatisfied with his conduct in the role of chairman/CEO, while three were satisfied.

By the end of December 1878 both the dissatisfied eight and the pro-Watkin group were at an advanced state in their preparations for the elections for the four SER board seats coming due for re-election at the company’s half-yearly general meeting. The eight wanted to retain their majority position. Watkin wanted to replace all three of the eight who were up for re-election, and thus relieve himself from the discomforts of being routinely out-voted. What the January 1879 campaigning for SER shareholder’s votes by the two sides tell us about the nature of the board struggle will be discussed in Section IV of this paper. But since the board situation at the end of 1878 looks so similar to the situation of fifteen months earlier, it would seem worthwhile to look back to the situation during 1876 and 1877 to see if that casts light on why matters were not brought to a head at the time of four SER board seats coming due for re- election at the company’s February 1878 general meeting. What might Watkin have seen to be the gains from his asking Rawson to mediate, and then going along with Rawson’s “peace plan”?

III The SER board during 1876 and 1877 Rawson was the public spokesman for the grouping on the SER board dissatisfied with Watkin during the final stages of the struggle, in 1878 and 1879. But during the latter months of 1877 it had been Joshua Fielden who had been at the forefront of that grouping, as has already been noted in Section I of this paper. Both Fielden and Rawson were relative newcomers to the SER board, both elected in January 1874. The others in the anti-Watkin grouping – with the exception of Surtees – had all been on the company’s board since before Watkin became SER chairman, in March 1866.102 The SER board minutes record both Fielden and Rawson having indicated in November 1871 a desire to join the board and having both agreed to “suspend” their candidatures pending the emergence of vacancies.103 At the company’s half-yearly general meeting in January 1873, Watkin raised the possibility of temporarily increasing the size of the board from 12 to 14 to make room for the two, and said:

102 Bibby had joined the board in February 1866, as part of the process that brought Watkin to the chair (see Hodgkins op. cit., p. 282). Byng, Beattie, Mellor and Buckley were unambiguously “pre- Watkin”. 103 TNA RAIL 635/41, p. 183, minute 332. Rawson had lodged a notice of candidature in two preceding years (RAIL 635/39 minute 933 and RAIL 635/40 minute 797) and wrote “I am still a candidate”. For Fielden, November 1871 appears to be his first formal approach. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 44

I am bound to remember the family of Mr Fielden who collectively hold such a large amount of the stock that they ought to be represented on the Board. I think when it comes to half or three quarters of a million of money that such an exceptional holding deserves a representation.104

The figure for the Fieldens` stake in the SER used by Watkin here does not match the one he cited twelve months later at the time Fielden was elected to the board:

Mr Fielden has £73,200 in his own name: the Fielden family hold altogether about a quarter of a million.105

The discrepancy may be because the larger figure includes loan monies as well as shareholdings, or possibly because it includes an SER estimate of stock owned by the Fieldens but registered in the names of “nominees”. Joshua Fielden’s older brother Samuel owned a greater amount of SER stock than he did, and was described by Watkin in July 1876 as one of the five largest shareholders in the company.106

The bottom line here is that although Mewburn was consistently presented by Watkin during the 1876 to 1879 period as the largest shareholder in the SER, the Fielden family in aggregate may well have had greater holdings – and greater voting power. They were a very wealthy family. The father of Joshua and Samuel was John Fielden (1784–1849), described by Stanley Chapman as a “genius as an entrepreneur” and “the master spirit” of the Lancashire cotton firm, Fielden Brothers of Todmorden. He died when Joshua was 22 and Samuel 33, leaving £203,000.107 The family enterprise passed into the control of John’s youngest brother Thomas who continued the diversification commenced under John into shipping, merchant banking, and investments in railways and land. Thomas died childless in 1869 leaving £1.3 million. Apart from a £30,000 trust and his house which went to this widow, this was divided equally between Samuel, Joshua and their brother John (1822–1893). Samuel continued to live in Todmorden and was a major shareholder and director in the Lancashire and Yorkshire Railway company. Joshua bought Nutfield Priory, a 328 acre estate in Kent, in 1866 and

104 TNA RAIL 1110/425, pp. 730-731. 105 TNA RAIL 635/11, p. 34 of Report of proceedings of 29 January 1874 meeting. 106 ibid, p. 51 of Report of proceedings of 20 July 1876 meeting. 107 Stanley Chapman, “The Fielden fortune. The finances of Lancashire’s most successful ante- bellum manufacturing family”, Financial History Review, volume 3, 1996, pp. 7-28. The quotes are from p. 9, the estate figure from p. 26. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 45

“spent the 1870s in expensively rebuilding it as a big, charmless, Gothic house”.108 In 1873 he also owned a 4,341 acre estate in Norfolk. By the mid-1870s, although the Fieldens still owned the cotton manufacturing business in Todmorden, it would probably be a mistake to think of them as “Lancashire industrialists”. Stanley Chapman’s conclusion was that: “the Fielden fortune, apparently the largest accumulated by a Lancashire family of cotton manufacturers before the American Civil War, was in reality largely earned in Anglo- American trade and finance”.109

In January 1876 there was an extraordinary altercation between Samuel Fielden and Watkin at the MS&LR’s half-yearly general meeting. Watkin’s son Alfred had been elected to the board of the MS&LR at the 12 November 1875 board meeting of that company. Joshua Fielden was not present at the SER board meeting of 18 November which discussed Alfred’s letter informing them of that and offering somewhat half-heartedly to resign from his post with the SER:

… probably there is no valid reason why I should not [continue at the SER] … still I respectfully beg to give you the opportunity of now deciding otherwise.110

The SER board resolved that Shaw should reply to Alfred thanking him:

… for his valuable services and request him to retain the office … the Board at large not considering that the new duties which he has requested to undertake of necessity conflict with his services to the SER.111

Samuel Fielden apparently had strong feelings to the contrary. He was probably also aware that Alfred had written to indicate his candidacy for a board seat at the SER upon a “suitable vacancy” occurring, and that Watkin had sought the opinion of the SER directors about his addressing the company’s shareholders “on the subject”.112 It was the question of what exactly Alfred’s position at the SER was and whether that was compatible with his MS&LR board position that S. Fielden pressed Watkin about at the MS&LR general meeting in

108 F.M.L. Thompson, “Business and landed elites in the nineteenth century”, in F.M.L. Thompson (ed.), Landowners, capitalists and entrepreneurs, Clarendon Press, Oxford, 1994, p. 149. 109 Stanley Chapman, op. cit., p. 26. 110 TNA RAIL 635/44, pp. 174-176, minute 289. 111 loc. cit. 112 ibid, p. 236, minute 372, 13 January 1876 meeting. The board’s opinion was that “it would be more fair both to Mr [Alfred] Watkin and to any other future candidates not to anticipate the intended proposition by any announcement”. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 46

Manchester on 26 January 1876. Watkin made little attempt to provide any explanation, but fired back:

… there are men in [Lancashire] miserable enough to start this question. They are a plutocracy. I respect the aristocracy but these men with their money-bags I do not …. They have all the selfishness and meanness of their ancestors, and none of their talent, industry, and ability. They cannot help these criticisms; it is part of their low and envious nature; it is as much an emanation from the state of their moral condition as perspiration would be from any exercise or work on the part of other people; they cannot help it. I forgive Mr Fielden on that ground.

During the interchange, according to the Railway Times, S. Fielden “expressed a determination to have Sir Edward Watkin ousted from his office”.113

The day following the MS&LR general meeting in Manchester was the day of the SER’s half- yearly general meeting in London, with an SER board meeting immediately preceding this. At that board meeting a letter from S. Fielden regarding “Mr [Alfred] Watkin’s connection with the MS&L Line” was tabled. Neither its date nor its contents are disclosed in the board minutes, but it probably reached the SER prior to 24 January as that is the date of a letter from Alfred which is minuted immediately after that reference:

I wish it to be quite understood that my resignation is in the hands of the Board who can accept it at any moment … I have given the company 8½ years of my time and have received an average of about £288 p.a. a fact of which I think the Board cannot be aware …114

The date 24 January is significant because on that day Watkin wrote to Joshua Fielden essentially threatening to launch an attack on the business practices of the Fieldens in their relations with the SER, at the SER general meeting on 27 January. The intention of the letter may have been to warn that that attack would go ahead if S. Fielden attended the meeting and tried to make trouble regarding Alfred’s position. On 12 January Joshua Fielden had written to the company saying that he and his brothers accepted the SER’s offer for their interest in the London Bridge Land Company, and the LBSCR had also indicated their agreement to the

113 Railway Times, 29 January 1876, pp. 101-103; and The Manchester Guardian, 27 January 1876, p. 8. Watkin had Fielden’s criticisms and his own reply printed and mailed-out to MS&LR shareholders. 114 TNA RAIL 635/44, pp. 275-277, minutes 422 and 423. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 47

SER’s proposal. It appears that Watkin had not been directly involved in the negotiations leading to the offer which the Fieldens accepted. That had been left to Mellor and Beattie. Watkin claimed in this letter of 24 January to J. Fielden that he had become concerned about the transaction when looking into it so as to be able to explain it to the SER’s shareholders;

… and I find the history of the transaction so extraordinary that I must ask you to tell me if I am under a wrong impression.

After listing the features he took exception to, Watkin said that “in the absence of new light”, that was what he would be telling the shareholders on 27 January.115 Joshua Fielden had his solicitors draw up a response to Watkin’s letter. Dated 26 January, this was tabled at the SER board meeting of 27 January. Fielden himself did not attend that meeting. The letter pointed out some factual inaccuracies in Watkin’s letter and argued that the Fieldens had done nothing that it was not within their legal rights to do, given the terms and conditions of the original loan made by the Fieldens to the London Bridge Land Company.116

As far as Watkin was concerned, his letter raising this London Bridge Land Company matter probably nevertheless achieved its desired result. S. Fielden did not attend the SER general meeting and Alfred’s position was not raised at the meeting. Nor did Watkin raise the Fielden transaction at the meeting. Indeed there is no record in the SER board minutes of Watkin seeking to press his concerns on the matter further. It may however be that Watkin’s letter to Joshua Fielden of 24 January together with his words on the Fieldens at the MS&LR general meeting played a part in the breakdown of relations between Watkin and his brother-in-law Jonathan Mellor. The father of Joshua and Samuel, as well as having been a successful businessman, he was active politically in a number of radical causes, including factory reform. Mellor as a young man had worked in Fielden’s factory reform movement and became a friend of the family. In the early 1860s he was managing the Fieldens` cotton mills in Bury and Heywood, and Mellor’s own cotton manufacturing business was supported by Fielden loans.117 Mellor might reasonably be expected to have objected to Watkin’s references to the “selfishness and meanness” of S. Fielden’s forbears. It would be surprising if he did not regard Watkin’s letter of 24 January as criticising his own role in the London Bridge Land Company negotiation. And he may have worried about the consequences of

115 ibid, pp. 270-275, minute 421. 116 loc. cit. 117 See Hodgkins, op. cit., p. 207 and p. 263. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 48

Watkin provoking any sort of “family feud” with a family so financially powerful as the Fieldens.

The vehemence of Watkin’s outburst against S. Fielden at the MS&LR general meeting seems to suggest a lack of friendly relations between the two dating from before Alfred’s elevation to the MS&LR board. But it is not clear what this was about. Joshua Fielden had moved to block an early attempt by Mellor to obtain an SER board seat for Watkin, in February 1862.118 But that does not appear to have stood in the way of Watkin supporting Joshua becoming a director of the SER in January 1874. The Fieldens objected to Watkin’s proposals for the SER to become involved with providing financial support to the project. At the 11 March 1875 meeting of the SER board Fielden moved, and Mellor seconded: “It is not expedient to proceed further with the Channel Tunnel question”. Watkin left the boardroom for this item, and Byng took the chair. Rawson proposed a compromise: that £20,000 be contributed towards experimental work, subject to a number of conditions (one being that the LCDR made a contribution of equal size, and be a partner in the project). Rawson’s compromise was passed by 7 votes to 2.119 Watkin would have preferred a different outcome, but it is hard to see how the Fieldens’ arguing for a “conservative” stance on a matter as financially big as the Channel Tunnel project, could in itself have annoyed Watkin so much as to be a major factor in priming him for his January 1876 outburst.120

S. Fielden resumed battle with Watkin in July 1876, and came close to imposing a humiliating defeat on him in a poll of SER shareholders held in early August. Watkin appears to have been wrong-footed by his opponents in these processes at the SER, possibly because he was preoccupied by his push to become chairman of the GER, which got underway in the same July and which also saw S. Fielden active in the anti-Watkin cause. The combination of the events of July-August 1876 at the SER and the somewhat more protracted events at the GER may have been a chastening experience for Watkin.

The SER board scheduled the company’s half-yearly general meeting of 1876 for 20 July. The GER’s half-yearly general meeting was held on 29 July. S. Fielden attended both

118 ibid, pp. 207-208. 119 TNA RAIL 635/43, pp. 357-358, minute 635. 120 The LCDR board voted against making a contribution equal to the SER’s, wanting instead a ratio reflecting the shares of the two companies in their continental traffic pooling agreement. (Hodgkins, op. cit., p. 450.) This meant Rawson’s compromise was probably less helpful to Watkin than Rawson had anticipated. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 49

meetings and spoke against Watkin at each. And at both meetings he was accompanied by an apparently newly-acquired ally, Sir Charles Whetham. Whetham had been the SER’s auditor for some 20 years up until January 1876 when the company’s audit committee had recommended to the shareholders that he be replaced by George Smith. Whetham resisted this and on a show of hands at the January general meeting received the same number of votes as Smith. A poll was called at which Watkin used proxies to dump Whetham. That was not surprising. Whetham had spoken at the preceding general meeting criticising a change in the SER’s accounting system (proposed by Watkin) to create a “General Reserve Fund”. Watkin had responded by saying:

I am bound to say I am taken somewhat by surprise by the movement he has seen fit, for some reason, to adopt today …. When the auditor of a Company thinks fit, without a single word to the Board to say that which, without examination, would be damaging to the property, he is putting himself in an anomalous position and I am quite sure he places the Board in a painful and anomalous position too.121

On 7 July 1876, Whetham sent a circular to SER shareholders, asking for proxies for him to use at the 20 July half-yearly general meeting in pursuing further both this accounting issue itself and Watkin’s handling of it. On the latter he specified two matters in particular:

… the chairman of a public company having placed the statement of accounts offered by the Board of directors in the hands of the proprietors’ auditor has no right, nor should he be permitted, to withdraw or change them …

… the chairman of a company cannot with propriety or safety be allowed to influence a committee of audit, or to take part in the choice of an auditor.122

The Railway Times reproduced this circular in full and provided editorial comment: “we understand that he has received the support of a numerous and influential body of proprietors, about one thousand of whom have signed proxies for use under his direction. Doubtless the number will be greatly augmented before the day of the meeting”.123

To have secured almost a thousand shareholder proxies within eight days of his letter requesting them was clearly a considerable achievement on Whetham’s part. It suggests

121 TNA RAIL 635/11, p. 56 of report of proceedings of 78th half-yearly meeting, 29 July 1875. 122 Railway Times, 15 July 1876, p. 638. 123 ibid, p. 633. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 50

shareholders had been contacted beforehand and canvassed. To assess the manpower requirements of that and the costs is difficult, but it is hard to believe they would have been small. Whetham had experience of election processes. Born in Bridport Dorset in 1812, he became a flax and hemp manufacturer in London and in 1843 was elected to the Common Council of the City of London. He became an alderman in 1871 and Sheriff of London and Middlesex in 1873–74 (during which term he was knighted). In 1875 he stood unsuccessfully for Parliament as Conservative candidate for Bridport. He was chairman of the Blackwall Railway Company (from 1870) and a director of the London Tilbury and Southend Railway (LT&SR). Both these companies ran into Fenchurch Street station and both had good relationships with their neighbour to the north, the GER. The Blackwall was leased to the GER from 1866. The chairman of the GER, Charles Parkes, plus two other GER directors sat on the board of the LT&SR.124 It seems likely that Parkes, with his role at the GER under threat from Watkin, would have been happy to provide support to Whetham in his campaign against Watkin at the SER. And it is clear that S. Fielden was enthusiastic to play his part.

Watkin seems to have been slow to spot how serious a threat Whetham could be. This may have been because he saw the accounting issue Whetham was running with as being too arcane to arouse much passion among shareholders, and as something he would lose little by conceding on if it did. Whetham’s point was that the “general reserve”, by mingling figures from the capital account with figures from the income and outlay accounts, provided a veil which could potentially hide the payment of dividends out of capital. His argument was that it should be split into a capital reserve and a current reserve. When the SER board considered Whetham’s circular to the shareholders at its 13 July 1876 meeting, the result was that it “did not consider it necessary to send out any reply”.125 A week later the board meeting on the morning of the general meeting agreed to put it to Whetham that a committee of the five largest shareholders willing to act be established to investigate the points raised in his circular, take evidence and expert legal advice etc., and report to shareholders. This was then communicated to Whetham that same morning.126

Whetham and his supporters were not attracted by this proposal. By giving them so little notice of it, Watkin did gain an advantage, however. When the general meeting got

124 H.P. White, op. cit., pp. 193-195; Bradshaw’s Railway Manual, Shareholders’ Guide and Directory. 125 TNA RAIL 635/44, p. 524, minute 776. 126 TNA RAIL 635/11, Report of proceedings of general meeting held 20 July 1876, p. 19. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 51

underway, Watkin outlined that the board intended to support a resolution to establish a shareholders’ committee along the lines put to Whetham and said that this resolution would be the next item on the agenda after the motion for the acceptance of the half-yearly accounts and directors’ report had been dealt with. After Watkin’s motion for the adoption of the Report had been seconded, to quote Herapath’s, “… a very protracted and irregular discussion ensued, in the course of which a great many personalities were indulged in”.127

S. Fielden was the first speaker and Whetham the second. Fielden began by questioning the legality of a circular which had been sent to SER shareholders asking them to revoke proxies they had sent to Whetham. From the board minutes we know that no such circular was authorised by the SER board, but it is not clear who had signed this circular or when it had gone out. Watkin appears to have had the SER’s solicitor primed to respond, however. He (W.R. Stevens) was immediately able to cite a legal authority stating:

… it was the undoubted right of any shareholder to withdraw or revoke his proxy up to the very moment that the proxy was about to be used.128

Fielden suggested a willingness to contest that interpretation, but then proceeded into quoting the personal attack Watkin had made on him at the MS&LR meeting twelve months earlier, and going into the questions he had raised at that meeting about Watkin’s son’s position which he argued still needed to be answered, particularly as Alfred had now also been elected to a seat on the board of the Metropolitan Railway. Watkin intervened and ruled this out of order, not being on the question before the meeting, but he did say that Alfred’s resignation from his post with the SER “had been in the hands of the Board for some time … but not yet accepted”.129

Whetham spoke more briefly than Fielden and then attempted to move an amendment to the half-yearly accounts (seconded by Fielden), to split the General Reserve figure into two parts. Watkin invited the SER’s solicitor to comment and he said that the meeting could not amend the company’s half-yearly accounts. The accounts as presented could be accepted or rejected but not amended. And if rejected, the meeting could not then resolve to pay a dividend. Watkin then put the resolution for the adoption of the Report and Accounts, which was passed

127 Herapath’s, 22 July 1876, p. 784 (“personalities” was the euphemism of this period for personal attacks). 128 TNA RAIL 635/11, 20 July 1876 meeting, pp. 21-22. 129 Herapath’s, loc. cit. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 52

with two votes against: Whetham and Fielden. Whetham demanded a poll and Watkin stated that that would require an adjournment for a fortnight to allow Fielden’s legal challenge to the proxy revocations to be gone into, thus delaying the taking of a resolution on the dividend. At this point it must have started to become clear to those in the room that Whetham and Fielden had not done their homework as thoroughly as they might have done. After some further toing and froing Whetham withdrew his motion for a poll and the resolution to pay the dividend was passed unanimously. 130 Round one to Watkin.

Whetham then proposed a resolution that it was “the opinion of the meeting” that the General Reserve figure in the company’s accounts should be presented in two parts, to quarantine the capital account figures in the way he viewed to be appropriate. Watkin chose not to resist on this and it was carried on a show of hands “with one dissentient” (not named).131 The remainder of the meeting was taken up by elections for the membership of the company’s Audit committee, on most of which Whetham demanded polls, and Watkin’s motion to establish a committee of large shareholders to investigate the matters raised in Whetham’s circular and report back. Curiously Whetham voted against this. He was the only person to do so, and he then called for a poll on the motion.132 It was this curious move which had interesting consequences three weeks later. But at the time this meeting closed, Watkin and his supporters probably marked it down as having been a rout for Whetham and Fielden.

Watkin moved to capitalise on this. A printed “verbatim report” of the proceedings at the 20 July meeting was prepared and copies posted to SER shareholders on 24 July, together with a covering letter pointing out that Whetham had himself demanded a poll on the proposition to establish a shareholders’ committee

… and has used proxies entrusted to him to prevent the appointment of such committee, notwithstanding that the meeting adopted the proposal with only one dissentient (Sir Charles Whetham). Thus it appears that Sir Charles Whetham shirks all enquiry, and desires to control the audit of the company through the medium of proxies obtained by surprise and by unfounded statements.

130 TNA RAIL 635/11, 20 July 1876 meeting, pp. 28-42. 131 ibid, p. 44. 132 ibid, pp. 52-53. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 53

This letter went on to solicit proxies to be used at a special meeting immediately following the adjourned half-yearly meeting scheduled for 3 August “to put an end to these discords”.133

The GER half-yearly general meeting held on 29 July provided Whetham and S. Fielden with an opportunity to return fire publicly. In this they were assisted by Hall Rokeby Price (1821– 1903), a member of the London Stock Exchange and a skilled public speaker. Watkin was not present at this meeting and was nominated for a seat on the board in absentia by Bass. The GER chairman, Parkes, ruled that it was therefore in order for Rokeby Price and Fielden to address the meeting regarding Watkin’s credentials for the post. Rokeby Price spoke first and immediately focussed on the SER:

Sir Edward Watkin is a king who brooks no rivals near his throne. Look at what has been going on in the South Eastern. Alderman Whetham has been auditor for a great many years and following out of what he considered to be his duty, he took exception to some mode of keeping the accounts. What did Sir Edward Watkin do thereupon? The first time Sir Charles Whetham came forward for re- election he used all his directorial influence to turn him out of the office of auditor … if you elect Sir Edward Watkin today it must be in the capacity of sole dictator.134

Fielden questioned the motives of those pressing for Watkin to become chairman of the GER, saying:

I look upon [it] as purely and simply a stock-jobbing affair. Such things are often done, and if there is a man in the world who helps stock-jobbing it is Sir Edward Watkin.135

Fielden also questioned whether Watkin was “qualified” to be nominated as a director – i.e., whether his shareholding in the GER was sufficient. Parkes’s reply suggests that Fielden may have been primed to ask this.

[He] bought £2,000 of stock about a fortnight ago. He is not qualified to vote, but he is qualified to be a director …. The opinion of counsel has been taken, and that opinion is that we should assume his qualification.136

133 TNA RAIL 1110/425, p. 893. 134 Railway Times, 5 August 1876, p. 690. 135 ibid, p. 691. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 54

If no one had asked Parkes the right question, it would have been difficult to get this interesting scrap of information into the public domain. On the show of hands, Parkes declared Watkin not elected. Bass called for a poll and the meeting was adjourned for a week.

In the meantime the SER general meeting reconvened. In the counting of votes on the motion to establish a committee of five of the company’s largest shareholders to investigate the points raised in Whetham’s circular, Watkin’s scrutineers had done something which they (and Watkin) no doubt thought was very clever. Whetham had obtained a total of 969 proxies, of which Watkin’s scrutineers had identified 264 which they believed they could argue had been “revoked”. But they chose not to press the point. This meant that Whetham “won” by 18,210 votes to 14,230, and Watkin’s motion to establish the committee was defeated. S. Fielden was one of the SER’s five biggest shareholders and would therefore have been entitled to sit on the committee, had it gone ahead. The committee would thus have had some potential to create embarrassment for Watkin. Whetham’s “win” could therefore be seen as a shot into Fielden’s foot. But this was not the only item on the agenda for this reconvened meeting. The taking of the other items gave Whetham and Fielden the opportunity to speak further. When they did speak, they raised the issue of Alfred’s position in the SER, with Fielden seconding Whetham’s motion

… that the Directors be requested to accept the resignation of Mr Alfred Watkin in the position which he holds in the South Eastern.

Both Fielden and Whetham made it fairly clear that it was Watkin senior who was the real target of their mud-slinging rather than the unfortunate Alfred, Fielden saying:

You are paying a paid officer who is a Director of two other railway companies. I want that to go out to the world. I think the Shareholders will begin to think a little different and not be quite content to accept Sir Edward Watkin’s dictatorial style.137

Mewburn interrupted Whetham and described his comments on Alfred as “an insult to the feelings of the Shareholders”, to which Whetham responded by suggesting Mewburn “walk out of the room”. When Whetham resumed, Mewburn again interrupted:

136 loc. cit. 137 TNA RAIL 1110/425, pp. 897-898. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 55

… if the speaker had the heart of a gentleman, much less that of a father, he would not make use of such expressions. He is neither an Englishman nor a gentleman who would do so.

Prior to putting the motion to the vote, Watkin sought to defend his son’s record of service with the SER and said that in his opinion Whetham:

… has not been actuated by a desire for the interests of the Proprietors, but he has been actuated by personal motives of spite and pique, and by all those things that disfigure a little mind.

When the motion was put, three hands only went up in its favour. Whetham demanded a poll, which required a further adjournment of this meeting to 10 August. Before adjourning Mewburn moved a motion of “cordial thanks” to the Chairman and directors “for the zeal, energy and ability with which they have maintained the affairs of the undertaking …”. Mewburn’s seconder described this as a vote of confidence in the chairman and directors.138 But during the passions of this disorderly meeting, Watkin appears to have overlooked the fact that he could not use the proxies obtained in response to his circular of 24 July in a poll on a motion put at this meeting. Those proxies could only be used in voting on matters covered in the short “special meeting” which immediately followed this one. Not surprisingly Whetham did not call for a poll on any matter at that special meeting, despite Watkin inviting him to. Watkin himself therefore called for a poll on a motion which Whetham’s vote had been the sole vote against in the show of hands – the vote of thanks to the members of the company’s audit committee for their services during the past year.139 This at least meant that the special meeting would have to convene again on 10 August, as well as the general meeting, possibly giving Watkin another opportunity to use those proxies.

When the SER’s half-yearly general meeting reconvened on 10 August 1876, its only business was the report of the result of the poll on the motion that Alfred’s resignation be accepted. As one would expect the number of proxies Watkin had used to vote against this motion was exactly the same as the number had had used in the vote on the establishing of a shareholders committee of investigation. A very small number of the votes these represented were reported as disqualified on the basis of revocations. The total of the pro-Watkin votes

138 ibid, p. 899. 139 ibid, p. 900. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 56

was 13,825 this time compared with 14,230 on the earlier question. Whetham’s total number of votes, in contrast, had shrunk from 18,210 on the earlier question to 13,489 on this one. The same scrutineers, looking at the same pile of 969 pro-Whetham proxy forms had this time disqualified 268 of them whereas all of them had been allowed on that earlier question, on which it had been convenient for Watkin to “lose”. Alfred’s resignation letter could stay in the in-tray, but this must not have looked good. Whetham sent out a circular to SER shareholders, dated 11 August, and paid for it to appear among the advertisements on the front page of the following day’s Railway Times.

… I wish to express my thanks to the 1,100 proprietors holding about a million and a half of stock who spontaneously intrusted me with their proxies …. My resolution affirming this fundamental principle of finance was carried unanimously at the meeting on the 20th [July]. By manipulation of my proxies, 18,210 votes being polled on one question and 13,513 on another, at the same meeting and on the same proxies (on which point I am taking legal advice …) the chairman was enabled to shelve the personal questions involved.140

The reconvened “special meeting” that followed the reconvened general meeting allowed it to be put on the record that Watkin had secured 2,128 proxies through his circular of 24 July and that these represented 53,559 votes. Whetham said “All these proxies are got out by false representations” and dissented from a motion “That this meeting … feel it due to Mr [Alfred] Watkin to place on record their obligation to him for his valuable services to the company …”.141 But Whetham and Fielden do not appear to have pursued these matters at the SER further during 1876. The issue of Alfred’s position in the company and his two “outside” directorships was thus allowed to go into abeyance until the following year.

Meanwhile, at the GER, things had not gone as well for Watkin as they might. When the half-yearly general meeting reconvened on 5 August, the report on the poll for the election of three board members declared Watkin elected. But when Watkin sought to move a motion for a conference between the board and the group of large GER shareholders headed by Michael

140 Railway Times, 12 August 1876, p. 709. It is not clear why there is the small discrepancy between the figure of 13, 513 here and that of 13,489 in the company’s official record of the meeting (RAIL 1110/425, p. 901). 141 TNA RAIL 1110/425, p. 900. Maclure was the seconder of the kind words to Alfred and said “I have the pleasure of knowing Mr Watkin personally”. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 57

Bass, who had supported his election, Parkes declared this out of order, closed the meeting and vacated the room. According to the Railway Times, Watkin’s response was:

… he jumped into the chair the moment the chairman had retired from it and protesting that the meeting was packed because it would not listen to him, put his resolution declaring it to be carried although not half-a-dozen hands were held up for it, and without venturing to ask for the negative vote.142

During this process, S. Fielden was prominent among those who jeered Watkin, shouting: “Why, he has taken the chair already!”.143 Bass mounted a requisition for an extraordinary general meeting which was held on 5 October. In the lead-up to that meeting a Railway Times editorial asserted:

There is no doubt a ring of jobbers and brokers has been formed for [Watkin’s] support and that many of its members have ‘plunged’ or are ‘plunging’ heavily for the purpose of the present agitation … in many cases the stock was actually pawned at different banks, directions being given as to how the votes were to be used.144

At the meeting Bass proposed and Roger Eykyn seconded “that … the present board of directors should resign office”. On the show of hands this was voted down. A poll was called and the meeting adjourned to 13 October. The lead editorial of the Railway Times on 7 October was on the GER contest, and read;

With Sir Edward Watkin at the board as its head and dictator it would doubtless be an agreeably soft and profitable nest for him and his fledglings – whether sons, sons-in-law, or clients who as he says do his work for him in the expectation of benefits to come.145

Watkin lost the poll 46,497 votes to 42,036. He was not present at the reconvened meeting at which the result was declared, but one of his scrutineers (who had refused to sign the scrutineers’ report) argued that various of those votes should have been ruled out, and that the

142 Railway Times, 12 August 1876, p. 721. 143 ibid, p. 725. 144 ibid, 2 September 1876, p. 793. 145 ibid, 7 October 1876, p. 901. The report of the meeting is at pp. 890-896. Both Rokeby Price and Whetham spoke against Watkin, the former saying inter alia “… in the Metropolitan … he appointed his own son for his colleague. Are we to have such nepotism as that?” Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 58

result should have been a small majority (358) in favour of Bass’s resolution.146 Watkin does not appear to have sought to pursue that matter further.

The outcome of this battle for shareholder proxies at the GER must have come as a severe disappointment to Watkin. In the poll for seats on the GER board held during the opening three days of August, Watkin had obtained 38,611 votes and Parkes had obtained 33,945. Some nine weeks later the campaigning of Watkin’s supporters had succeeded in increasing his vote by less than 3½ thousand, while the campaigning of those supporting Parkes had lifted that side of the votes by over 12½ thousand. Looking at the numbers of proxies rather than the votes represented by them, it is clear that the Parkes supporters had been much more effective during that last two months in mobilising smaller shareholders. Parkes himself said of the difference between the two campaigns:

We are now some 1,600 proxies in excess of that occasion while Mr Bass is a little under or about the same as he was then.147

Watkin had actually received a majority of votes cast by holders of ordinary shares in the GER. But votes cast by preference stockholders – probably more conservative and smaller- scale investors – had gone by more than two to one against him. While Watkin may have been reluctant to say so, it must have been obvious to him that there had been something lacking in the pro-Watkin GER proxy campaign compared with the campaigning of his opponents. Add to that the negative publicity generated by the way Watkin’s scrutineers had treated Whetham’s proxies in the SER polling and one can start to see why Watkin may have wanted to feel very sure he and his team had learned the lessons of 1876 before launching into another major contest for shareholder proxies.

This section’s review of events during 1876 points to that as the likely reason behind Watkin’s agreeing to go along with Rawson’s “peace plan” of December 1877 and postponing a final showdown with his opponents on the SER board by twelve months. It may have been a matter of a squad of well-drilled canvassers not having been got ready for action by December 1877. Or it may have been concern that Watkin needed something better than was readily available to him at that time to be presented to SER shareholders as the “key issue” between him and his opponents. One lesson from this July to September 1876 period

146 ibid, 14 October 1876, p. 931 147 ibid, 7 October 1876, p. 890. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 59

should have been that if Watkin’s opponents could succeed in presenting as the major issues Watkin’s autocratic and dictatorial behaviour, his inclination towards nepotism, and his supposed hand-in-glove relationships with stock market manipulators, his campaign for proxies would be likely to be an uphill struggle. That did not prevent Watkin taking the steps in mid 1877 that put the spotlight back on Alfred. But by December 1877 his advisers might have succeeded in persuading him that putting his ambitions for his son on the back-burner for a while might be in his own (and Alfred’s) best longer term interests.

Before returning to the situation on the SER board at the beginning of 1879 it is worth drawing attention to a further interesting connecting thread between the events of 1876 and that later situation. Whetham’s pitch to the SER shareholders in July 1876 was clearly to present himself as a stickler for sound accountancy and for the principle of a company’s auditor being responsible to that company’s shareholders and not being subject to direction by either its CEO or its board. Watkin’s position was that Whetham had no particular interest in accounting principles and that Whetham’s motivation for making the statements he did at the SER’s half-yearly general meeting of July 1875 had nothing to do with any matters of principle. Watkin wrote to the SER’s audit committee on 5 January 1876:

I am afraid I gave him [Whetham] offence by not being able to accede to his wish to elect him a Director without submitting his name to the ordeal of an election by the Proprietors which was open to him. At the same time I wish to say that I have no personal feeling whatever in the matter, and that if you recommend him for re- election I should not have a word to say …

He then went on to say that at the Metropolitan Railway he had “tried the plan of having Public Accountants as auditors, and I have found it to work with great satisfaction”.148 Watkin had a number of shortcomings but his record both up to this time and afterwards seems to make it clear that a fondness for dodgy accounting was not one of them.

Whetham’s desire to create public embarrassment for Watkin may have had roots in something quite different from thwarted ambition to an SER board seat, however. Whetham’s circular to the SER’s shareholders went out on 7 July 1876. A company of which Whetham was a director had a Bill before a House of Lords committee between 29 June and 13 July. Watkin was the principal opponent of that Bill. The company was the Metropolitan

148 TNA RAIL 635/44, pp. 239-41, minute 377. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 60

Inner Circle Completion Company, incorporated by Act of Parliament in August 1874 to construct an underground rail link between the Metropolitan District Railway’s then terminus at Mansion House station and a point on the Metropolitan Railway to the north of Aldgate station. The route was not the route that the “circle” was eventually completed via. It was to the north of that route and the scheme involved the construction of a new wide road above the line. Whetham was one of this scheme’s promoters named in its 1874 Bill. The purpose of the ICC Company’s 1876 Bill was to give it further time to find finance and construct the line. If this 1876 Bill were defeated that would effectively kill-off the company. Forbes and the MDR had supported the 1874 Bill and were supporting the extension of time Bill. Watkin and the Metropolitan Railway had opposed the scheme in 1874 and were keen to see it killed off in 1876. The Bill had successfully got through the House of Commons committee process, in the face of this opposition, in March. So July 1876 would see whether the ICC Company was killed-off, and the money spent on its promotion tipped down the drain, or whether it was given more time. Parkes from the GER gave evidence to the House of Lords committee, supporting the extension of time.149 The Railway Times described the House of Lords committee hearings on the ICC Company’s 1876 Bill as “one of the severest forensic contests of the present parliamentary campaign”. Watkin did not succeed in blocking the Bill. For the shareholders of the Metropolitan Railway the Railway Times editorial continued, this had caused “a heavy and altogether unnecessary bill of law and parliamentary costs”.150 Clearly the costs imposed on the ICC Company by the contest would also have been heavy. It is not clear how big a financial stake Whetham had in the ICC Company. The fact that the company had not been able to raise the finance necessary to proceed with the scheme, and therefore needed to apply to Parliament for more time, may have been influenced by the continued opposition of Watkin and the Metropolitan Railway.

If these events concerning the ICC Company provide a plausible alternative explanation of the grounds for Whetham’s animosity towards Watkin, they also raise the question: why does Watkin appear to have made no effort to draw the attention of SER shareholders to this? The answer seems plain. To many of the SER’s shareholders, the construction of the ICC Company’s proposed line would have been viewed as something to be welcomed. The ICC Company’s first station east of Mansion House was to be “At Cannon street … opposite to

149 The ICC company is often referred to as the Newman scheme, after George Gunnall Newman (1827-1885), the company’s solicitor. The minutes of the Parliamentary committees are at TNA RAIL 1066/2143 (for the 1874 Bill) and RAIL 1066/2144 (for the 1876 Bill). 150 Railway Times, 15 July 1876, p. 631. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 61

and connected with the South Eastern Railway”.151 This would provide passengers arriving on SER trains at Cannon Street with a convenient interchange onto underground services connecting to the terminals of the railway companies serving the northern parts of London and beyond: the GER at Liverpool Street, the North London Railway at Broad Street, the GNR at Kings Cross, the Midland at St Pancras, and the LNWR at Euston. It would also mean that passengers arriving on SER trains into Charing Cross could reach those terminals more conveniently than by taking the “long way” round via Kensington and Paddington. Shareholders in the Metropolitan Railway might have been concerned about the ICC Company being effectively a satellite of Forbes’s MDR. But for the many SER shareholders who were not financially interested in the Metropolitan Railway, that was hardly a problem. A successful completion of the ICC Company’s scheme could be expected to boost traffic into and out of the SER’s Cannon Street terminal significantly. A killing-off of the ICC Company would leave Cannon Street with the properties of a cul-de-sac, other things being equal. Clearly there is an element of inconsistency between Watkin’s ardent enthusiasm in 1878–79 to connect the SER to the rail systems of the north via the ELR, and his ardent opposition from 1874 to 1877 to the ICC Company’s scheme. The situation of the ICC Company in 1879 is returned to in Section V below.

IV The SER Board in January 1879 The new year began pretty much as the old year had ended as far as relations around the SER board table were concerned. Knatchbull-Hugessen’s diary entry for the special board meeting of 2 January 1879 reads

All there but Fielden and a frightful wrangle and mutual abuse all the morning.152

The principal tangible outcome of the meeting was a resolution moved by Buckley, seconded by Mellor and carried 6-4:

The chairman having … in connection with some of his colleagues and other parties taken active steps hostile to the Board and prejudicial to the company … the Board committee appointed at the last meeting [be] empowered to prepare an

151 These words are from the ICC company’s prospectus, dated 31 October 1877 and published in The Times, 8 November 1877, p. 13. (The location of the stations had been determined in the company’s 1874 Act.) This prospectus also describes the route of the line and the location of the proposed new road to be built as part of the scheme. 152 Knatchbull-Hugessen Papers U951 F25/31. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 62

address to the shareholders explaining the existing differences at the Board and that the Secretary be instructed to issue the same, signed by him on behalf of the Board.153

Whilst no doubt putting Shaw in a position he would prefer not to have been put in, this meant that the document would appear in shareholder’s mailboxes as an official company document whilst at the same time relieving the anti-Watkin directors from having to find the money for printing and postage costs. The “active steps” the resolution took objection to were the issuance of a circular to SER shareholders signed by Mewburn, and the publication of a document dated 1 January that was on SER Boardroom letterhead but written in the third person and unsigned:

The chairman Sir Edward Watkin regrets to have to state that … a list of proprietors holding £5,000 and upwards … was sent to the private residence of Mr Byng … [and] is now being used for the purpose of a private canvass … with the double purpose of aiding the re-election of Messrs Bibby, Buckley and Rawson and preventing his, Sir Edward Watkin’s re-election as chairman. In the meantime Mr Byng and other of the directors have twice over vetoed the early fixing of the half-yearly meeting, thereby preventing Mr Mewburn, Sir H.J. Tufton and Mr Young MP, or any other independent candidates from obtaining proxies … a course of procedure which is nothing less than an attack upon the independence of the proprietary body in the choice of directors. Described as a “curious document” by the Railway News,154 the final sentence invites the recipient to sign and return “the enclosed protest”, suggesting it was mailed out to SER shareholders. One possibility is that Watkin initially held the view that it was within his powers as chairman/CEO to instruct Shaw to sign and mail-out such a document, but reconsidered (or was talked out of) that view.

Mewburn’s circular commenced with a segment lauding Watkin’s capacities and stressing the need for SER shareholders to give their chairman “such support as is absolutely necessary to insure a continuance of his services”. Mewburn followed this with:

153 TNA RAIL 635/46, p. 471, minute 850. Surtees appears to have been absent from the room at the time the vote was taken. 154 Railway News, 4 January 1879, p. 5 (where the document is reproduced). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 63

Four Directors retire by rotation at the next half-yearly meeting, viz., Messrs John Bibby, Nathaniel Buckley, Henry Rawson, and James Whatman. To the re- election of Mr Whatman no one could, I think, have any possible objection. He has served on the Board for many years, and has concurred with and consistently supported the Chairman. I have, however, the honour of offering myself as a candidate, in conjunction with Sir Henry James Tufton, Bart., of Ashford, and Mr A.W. Young MP for the seats rendered vacant by the retirement of Messrs Bibby, Buckley and Rawson.

The circular concluded with Mewburn providing a few words on the credentials of Tufton, Young and himself for board seats at the SER.155

This Mewburn circular clearly took the anti-Watkin grouping on the SER board by surprise. Their numbers allowed them to dictate the timetable for the half-yearly meeting. And at the 2 January board meeting they for a third time blocked Watkin’s attempt to fix the date of that half-yearly general meeting for 30 January. It may have been that the eight had still not reached agreement among themselves as to what should be presented to SER shareholders as the principal reasons for supporting them and not Watkin. The wording of the circular sent out by Bibby, Buckley and Rawson dated 2 January seems to suggest discomfort:

We have as Directors of your company to inform you that our term of office expires [at the next general meeting] and that we intend to offer ourselves for re- election …. It is not our intention now to criticise the policy of Sir Edward Watkin, or explain the differences which exist between him and the large majority of the Directors. It is sufficient for us to say that no public statement has been made and therefore Mr Mewburn has had no opportunity of fairly considering or of giving an impartial opinion upon the subject. In due course a report will be made to the Proprietors by the Board until which time we request all who desire to form an impartial opinion to suspend their judgement …156

Bibby, Buckley and Rawson may also have been annoyed about having to sign their circular personally, rather than communicating with the company’s shareholders via more official- looking missives.

155 Herapath’s, 4 January 1879, pp. 19-20. 156 ibid, p. 20. This circular also contains a complaint of Mewburn’s circular “improperly intimating that seats are vacant by the retirement of Messrs Bibby, Buckley and Rawson”, This seems to be splitting hairs (and additional evidence of “discomfort”?). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 64

If Watkin had chosen to contest the round of SER board elections of twelve months earlier, his three candidates to displace anti-Watkin directors seeking re-election would have been Mewburn, A.W. Young, and Francis Pavy. Each had submitted formal notices of candidature and each, during mid-January 1878, had written to withdraw their candidature. Mewburn’s letter of withdrawal suggests he was much more reluctant than Young or Pavy about doing so:

… I defer my claim to a seat at the Board in the interests of peace; nevertheless I must say that no candidate can be brought forward who can present such a claim to a seat at the Board as I can: and which if put before the shareholders could not be ignored ... I shall have some trouble to keep my friends silent about this, but I hope to do it.157

The SER board meeting of 27 December 1878 was told by Shaw that he had received notices from all four retiring directors of their intention to stand for re-election, and that notices of candidature had been lodged by Mewburn, Young, Pavy and Tufton. A letter from Pavy withdrawing his candidacy was read at the next board meeting (2 January 1879). That letter was presumably lodged prior to the Mewburn circular being finalised. Pavy supported the pro-Watkin team during the campaign, and is reported in Knatchbull-Hugessen’s diary as having attended some of the meetings of the “election committee” which supervised and co- ordinated that campaign.158 It is not clear why it was Pavy who withdrew his candidature rather than Tufton or Young. Tufton gave Watkin an aristocrat for his team (he was the grandson of an earl), but he had no previous experience in business administration – which provided an avenue for criticism by Watkin’s opponents. Young, in contrast, appears to have been at this time a director of thirteen public companies which left him exposed to criticisms of a different nature. Pavy had good railway credentials and would probably have represented a safer, “smaller target” candidate than Young whose main plus seems to have been his long period of association with Watkin.159

157 TNA RAIL 635/45, p. 535, minute 890 (letter from Mewburn addressed to Watkin, dated 14 January 1878). 158 TNA RAIL 635/46; p. 460, minute 825 and p. 469, minute 848. Knatchbull-Hugessen Papers U951, F25/31, entry for 27 January 1879. 159 For the list of Young’s 13 companies see Railway News, 25 January 1879, p. 119. Four have an Australian focus (South Australian Company, South Australian Mining Company, Land Mortgage Bank of Victoria and Scottish Australian Investment Company) reflecting the fact that he had lived in Australia for many years, having been High Sheriff of New South Wales and a member of the Legislative Council. Apart from Beyrout Waterworks Company, City of St Petersburg New Waterworks and Anglo Argentine Tramways Company, the remainder are companies with businesses Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 65

Strictly speaking the election manifestos of the two sides did not appear until 16 January. The board majority blocked on 9 January Watkin’s fourth attempt to fix the date of the SER’s half-yearly general meeting. Knatchbull-Hugessen’s diary entry reads:

Sir Edward having been advised he could call a meeting … without the Board (emphasis in original), I came to a contrary conclusion and prevented his doing so. All the Board but Fielden were present, we were outvoted as usual …160

At the 16 January board meeting, the anti-Watkin group called-off the delaying tactics and resolved to fix the date of the general meeting for Saturday 1 February, one day later than the date Watkin had been pressing for. They had already had their proxy forms printed with that date on them. And they also had what was in effect their “manifesto” to accompany the proxy form printed and ready to go. At this meeting a resolution was voted through 7-4 authorising that it go out, as printed: “By Order of the Board, John Shaw”. This provided for a very short battle-for-proxies period. The “Board proxy” form indicated that it should be returned to Byng by Saturday 25 January, a mere nine days from the day of mail-out.161 It is not clear what the true final deadline for the lodgement of proxy forms was, but it seems clear that this was a deliberate tactic by Watkin’s opponents to put the Watkin team in a squeeze. Its main effect, however, seems to have been to put both teams in virtually the same squeeze. Watkin appears to have had his proxy forms and his accompanying “manifestos” at an advanced stage of typesetting, and with printing arrangements set up to go forward at the press of the trigger. His mailed-out material is dated the same day: 16 January. It is likely, therefore, that both sides’ election manifestos reached most SER shareholders at the same time – at their breakfast tables on 17 January.

The anti-Watkin manifesto has a long preamble building up to: “The reasons for the differences now existing between the Board and Sir E. Watkin may be briefly recapitulated”. Six reasons are then listed, in the following order:

located in the British Isles; two tramways enterprises, two gas companies, one waterworks and one brewery. Young and Watkin had stood together as Liberals for the two-seat constituency of Great Yarmouth in the 1859 general election. (Hodgkins, op. cit., p. 150 and pp. 158-60.) 160 Knatchbull-Hugessen Papers U951, F25/31, entry for 9 January 1879. 161 TNA RAIL 635/46; p. 482, minutes 879 and 880. A copy of the 3-page circular and accompanying “Board proxy” is posted in between pages 481 and 482 of this minute book. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 66

… the Chairman has endeavoured to exercise, in his own words, a “supreme authority” which is inconsistent with the independent action of any board of directors. … having agreed to settle the past differences … on the distinct understanding that he would loyally carry out [Board] decisions, he has deliberately re-opened all the questions in dispute. … he is the chairman of so many companies that it is impossible for any man properly to fulfil the onerous duties which he has assumed. … he has associated with himself in other railway companies several of the Directors of this Company without the consent of the Board. … it is impossible for him … fairly to represent conflicting interests, [and the SER] should be represented by those who act solely on its behalf. … especially the Board disapprove of [Watkin’s taking the chair of the ELR] and of the bills promoted by him … to abrogate agreements existing between [the ELR and the LBSCR] in which your company have a parliamentary right to participate.

After a few sentences responding to a point in an earlier Watkin-signed circular, there appears in bold type:

The main question which is now before proprietors is this: Shall Sir Edward Watkin assume to himself the entire control of your great property? Shall he as he had put it in his own words have “supreme authority”?

The document then ends with an appeal to shareholders not to reject “their old Directors who have served them for many years” and replace them by “men of no experience who are willing to accept the position indicated by the words of Sir Edward Watkin”.162

The statement in bold type on “the main question” suggests that of the six reasons for the board differences cited, it is the first which is being presented as the most important despite the fact that the sixth is introduced with the word “especially”. Although the ELR issue has been presented by Watkin’s biographer as the key issue in this board struggle at the SER, that

162 This document was reproduced in full in a number of newspapers: The Manchester Guardian, 18 January 1879, p. 8; Herapath’s, 18 January 1879, pp. 64-65, etc. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 67

is not what the anti-Watkin directors are telling the company’s shareholders is the principal issue in this document appealing to them for their proxies. This document seeks to present Watkin himself as the principal issue, or to be more precise, that Watkin’s behaviour as chairman/CEO of the company has been incompatible with principles of sound company governance. The first five of the six “reasons” cited in the document can all be read as citing points of principle regarding company governance which it is being alleged that Watkin has contravened.

Watkin’s own “manifesto” mailed out on 16 January appealing to shareholders for their proxies was of equivalent overall length to his opponents’ document, but got to the point much faster. He opened by quoting the vote of confidence in him passed at the SER’s July 1878 half-yearly general meeting. This was immediately followed by his request:

… to entrust me with your proxies for three distinct objects, viz:- (1) To resist an attempt to reverse your resolution of confidence of last July, by turning me out of the chair of the company. (2) To support the policy of extending your traffic … without further outlay of capital. (3) For the appointment of a Committee of the most influential of your body, to whom that policy shall be specially referred, and who shall report to you thereon at an adjourned meeting. I shall also as a means to this end, cordially support the candidature of Mr Whatman, Mr Mewburn, Sir H. Tufton and Mr Young MP …

Watkin did not attempt to give further detail on his policy for extending the SER’s traffic, referring his readers to his circular of the preceding week for that. He referred to his opponents’ appeal for proxies as making “a cruel and unjust attack … upon me with a view to influence your votes”, but sidestepped attempting to answer the main points raised in that attacked except by pointing out:

In many other railway companies there are directors who are also directors of other companies. Such a position only implies that these are persons whose capacity and experience are widely recognised.163

163 This document was also reproduced in full in many newspapers: The Manchester Guardian, 18 January 1879, p. 8; Herapath’s, 18 January 1879, p. 65, etc. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 68

An interesting feature of Watkin’s manifesto is that a shareholder reading it who lost concentration after the first handful of paragraphs, would nevertheless have seen what Watkin was presenting as the key reason to vote for him: to support his policy for building-up the company’s traffic so as to protect and enhance shareholder returns. A shareholder reading Watkin’s opponents’ manifesto who lost concentration before the half-way mark would, on the other hand, not have reached the six points they presented as being the core of their case – although the sentence in bold type might have partially remediated this. And a shareholder who did read all the way through to the end of that document may have been left concerned that with the first five of those six points no explanation had been given about how giving support to Byng et al. to sort those matters out should be expected to impact on shareholder returns.

A second interesting feature of Watkin’s manifesto is his third “object” – the establishment of a shareholders committee. This is the first mention made of such a committee. It suggests that the pro-Watkin election campaign was subject to a process of evolution. Although strictly speaking neither side’s election manifesto was published until 16 January, Watkin had made public a form of proto-manifesto in his speech to the 6 January Manchester meeting of SER shareholders which he had convened to the great displeasure of the majority eight on the SER board. In his circular calling the meeting Watkin stated that he:

Wished to have the opportunity of explaining to the shareholders, face to face the policy he had been trying to work out in their best interests and for the expansion of their income and protection of their property.164

By the time the meeting was held the shareholders would have received the Mewburn circular, making it clear that there was more to this than simply an information session. It was Watkin’s attempt to set the agenda for the campaign for the board elections. He wanted to portray the key issue in the contest as being the company’s policy for traffic development. He wanted to make it clear that he had such a policy. He wanted to challenge his opponents to explain what was wrong with that policy, or what they believed to be a superior policy. At this stage, in short, Watkin appears to have wanted to portray the board elections as being essentially a shareholder referendum on the SER’s traffic development policy for the period ahead. And the Watkin-preferred policy was to establish physical links between the SER’s system and the rail systems north of the Thames, and to the north of London, via the ELR and

164 The Railway Times, 11 January 1879, p. 22. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 69

a new link between that railway and the Metropolitan – which would be constructed at the expense of shareholders in the Metropolitan and the MDR.

After Watkin had explained his policy to that Manchester meeting, Rawson was the next to speak. He described this meeting as being held “to discuss a policy which ought to be discussed only in the board room”. Some of the information necessary for making an informed judgement, he argued, needed to be kept out of the public domain as did SER deliberations on which companies to actively compete against and which to cooperate with. That plus the inherent complexities involved meant “it was impossible for that meeting fairly to discuss these questions. They must leave them to the board”. But Rawson did not stick with complete rigidity to the approach of avoiding engagement with Watkin on “policy” and seeking to present the core issues as lying elsewhere. He told the meeting that the board majority had resolved to oppose the ELR’s Bill for the 1879 session of Parliament. And he explained the reason for that decision. One of the purposes of that ELR Bill was to repeal parliamentary approval of the 1869 agreement under which the LBSCR operated services over the ELR’s lines. Watkin had told the ELR’s shareholders and debenture-holders that the terms of that agreement were responsible for traffic over their line being held below what it should be, and were therefore not only crippling the company but against the public interest (see p. 28 in Section II of this paper). But that 1869 agreement had provided that the SER and the LCDR: “might participate on giving six months’ notice, but so as not to interfere with the control of the [LBSCR]”.165 Rawson told this Manchester meeting of SER shareholders that that 1869 agreement placed them:

… in a most advantageous position. If the East London were profitable, they could join in working it; until it was profitable they could decline to so join. He could not imagine a better position for them to be in than that …. He believed they ought to oppose the repeal of the agreement.166

Rawson did not tell the meeting that the anti-Watkin group on the SER board had also resolved to oppose the joint Metropolitan Railway/MDR Bill to complete the Inner Circle and connect it to the ELR.167 But even what he did say amounted to a rejection of the SER traffic

165 Charles E. Lee, The East London Line and the Thames Tunnel, London Transport, London, 1976, p. 18. 166 The Railway Times, 11 January 1879, p. 24. 167 This was revealed in the “Special Report from the Board of Directors to the Proprietors” dated 9 January 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 70

development policy favoured by Watkin. And under those circumstances many SER shareholders no doubt felt they ought to be told by Rawson and his colleagues what the alternative was, and why it should be regarded as superior.

Watkin’s opponents were happy for the ELR issue to be part of their battle for shareholder proxies campaign, but they wanted it to be discussed as a governance issue: the problem of Watkin wearing two hats (or “serving two masters”) in considering any matters in which both ELR interests and SER interests were involved; and the problem of Watkin and two other SER directors having joined the ELR board without prior consultation with their SER board colleagues. But they wanted to resist a discussion of these issues expanding to become a discussion of the bigger picture issue of how best to develop the SER’s traffic. The pro- Watkin group, in contrast were more than happy to talk about the key role to be played by the ELR in the development of the SER’s traffic, but no doubt not so happy to engage on the governance aspects. And by mid-January they may have found that many undecided shareholders lacked the time, energy or confidence to be enthusiastic about seriously treating the board elections as a binding referendum on the company’s future traffic development policy.

In this light Watkin’s shift to proposing the establishment of a shareholder’s committee to investigate the traffic policy issue looks like a shrewd move. It allowed his own team to continue taunting the opposition that they had nothing to offer as an alternative to Watkin’s by now well-publicised proposals. A the same time it defused the counter-arguments about confidentiality of information, complexity and conflict of interest by proposing that a jury of shareholders with the time and expertise necessary should report back to the broader body of shareholders on the issue. By 20 January Watkin had fleshed-out his proposal and lodged notice that he would move at the half-yearly general meeting the motion:

A Select Committee consisting of 21 of the leading shareholders be appointed to consider the question of the policy of the company with regard to Metropolitan connections and communications with the Northern lines – 7 to be a quorum, and that such committee report after taking evidence to an adjournment of this meeting.168

168 TNA RAIL 635/46; p. 485-6, minute 889. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 71

Four days later on Thursday 23 January Watkin sent SER shareholders a follow-up circular and “duplicate” proxy form, for use by those who had mislaid the 16 January one, or who had sent it to the wrong side, presumably. This again pressed the line that the policy of the company was the key issue at stake, but at the same time stressed that it was Watkin’s intention to use proxies entrusted to him to appoint a shareholders committee to investigate this issue. And he went a step further than he had previously by stating that the committee would be “impartially chosen”.

My opponents’ … object is now avowedly to turn me out of the chair and, in furtherance of that object, they have raked up many old personal accusations against me … I altogether decline to enter upon those personal matters … when the gravest questions of policy are at stake (emphasis in the original), I respectfully ask you to consider carefully the policy which I have explained in my published circulars and addresses, and to remember that my opponents have ventured to produce no policy as an alternative … your proxy, if entrusted to me, will be used for the purpose of appointing a committee, to be impartially chosen, to whom the differences of opinion … as to the policy of our Company shall be referred.169

Watkin’s opponents appear to have been concerned that this proposal for a committee on the policy issue had the capacity to win over waverers. On the evening of the same day, in their final appeal for proxies (with enclosed duplicate proxy form “in consequence of some of our proxies having miscarried”), they re-affirmed their position that matters other than traffic development policy were the key issues in the contest. But they added a P.S. stating they would not oppose Watkin’s proposed committee on company policy:

The questions at issue between ourselves and the Chairman of the Company involve general principles of joint-stock management which are of the utmost importance …

The Chairman … appeals from the decision of the great majority of his colleagues to the shareholders on questions of policy which, it is universally acknowledged, it is impossible for those with the information they now possess or that could be laid before them to understand …

169 Herapath’s, 25 January 1879, p. 88. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 72

A circular has been issued by Sir E. Watkin in which he intimates his intention of proposing a committee. If it is fairly composed, should you entrust us with your proxy it will not be polled against any such resolution.170

In the event, that promise by Watkin’s opponents on the SER board was not put to the test, as Watkin himself did not put “any such resolution”, which may have been a source of disappointment to some of the shareholders who had sent Watkin their proxies. But before moving on to the events at the half-yearly meeting, it is important to note that the weekend of 25/26 January effectively marked the end of both sides’ campaigns for shareholder proxies. The SER operated a “five day rule” for proxies, meaning proxies could not be used at a general meeting if they had not been lodged at the offices of the company five days before that general meeting, so that company officers could check on their validity and calculate how many votes each valid proxy carried. The system was not one vote per share. It was according to a sliding scale, which had been rendered more complex when SER shareholders had been allowed to “split” their ordinary shares into preferreds and deferreds and trade those preferreds and deferreds separately.171 It is not clear whether the five-day rule meant Tuesday 28 or Monday 27 was the final deadline, but it was definitely one of those two days. After that, a “valid” proxy could be “revoked” by the relevant shareholder, but unless the shareholder doing so appeared in person at the general meeting to vote, that meant converting to an abstention, rather than swapping sides. For each side in the contest, the circulars sent out on 23 January were the last written appeal to shareholders. And the editorials in the 25 January issues of the three principal weekly railway newspapers were their last opportunity to provide their advice for proxy-voting SER shareholders. The editorials in the 1 February issues could only seek to influence those voting in person, as could the various speeches made at the half-yearly meeting itself. Unless the vote counts on the two sides’ proxies were reasonably evenly matched, the events at the half-yearly meeting were likely to have been determined by Monday 27 January.

The conclusion of the campaigning for proxies appears to have led to an improvement in the atmosphere in the SER Boardroom. Knatchbull-Hugessen’s entry for the board meeting held

170 The Manchester Guardian, 24 January 1879, p. 5. 171 At the SER’s half-yearly general meeting held 18 July 1879 Samuel Fielden complained that the late mailing out of the accounts and directors report (dated 10 July) combined with the ‘5 day rule’ had made it virtually impossible for shareholders living outside London to get proxies in, in time. Watkin said he agreed that the company’s 5 day rule should be changed, and promised that Reports would not be mailed out late in future. (See RAIL 1110/425 pp. 1046-47.) Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 73

at noon on Thursday 30 January reads: “not much unpleasantness but some sparring. No one knows what the result will be but … I expect c 60-65 thousand as against 52-58 thousand”. This is markedly different from his entry for the preceding board meeting (20 January): “A frightful abusive wrangle which was not over at 1.30”.172 That wrangle had been triggered by an attempt on the part of the anti-Watkin directors to convert the Directors’ report to the shareholders, to be sent out accompanying the half-yearly accounts, into another company- funded vehicle for “informing” shareholders about the grounds for the Board majority’s differences vis a vis Watkin. Rawson proposed that three paragraphs should be added to the draft report as prepared by Shaw, that Watkin should sign the thus-expanded document with a note saying he dissented from those three paragraphs, and that it should then be mailed out to the shareholders. The first of the three additional paragraphs began

The Board is strongly of opinion that the proposed Bill of [the ELR] for the abrogation of its agreement with [the LBSCR] … should be opposed; and when that Bill is before Parliament, if proposals should be made of such character as you can accept with advantage to [the SER], your Directors will be ready to adopt them.

To this paragraph was appended the full report of the board committee on Parliamentary projects affecting the SER, which had been adopted by the board on 27 December 1878 – i.e., the report of the committee from which Watkin and his supporters had been specifically excluded. The second of the additional paragraphs was a “correction” by Rawson, to a letter that Watkin had had published in The Times (and elsewhere) on 18 January. The final paragraph quoted part of that same letter alongside some previous statements by Watkin, and concluded that during that earlier period (1878): “he must have been alike misleading his Board and his Proprietors”.173 The additional three paragraphs extended the overall length of the document by about 70 per cent.

Watkin, hardly surprisingly, was unwilling to sign. The board meeting appears to have broken up with Watkin neither signing the document nor specifically refusing to do so. Of the three additional paragraphs he had drafted, Rawson was most impatient to see the middle one reach SER shareholders. On the following day he took steps to have that paragraph

172 Knatchbull-Hugessen Papers U951, F25/31, entries for 30 January and 20 January 1879. 173 Herapath’s, 25 January 1879, pp. 76-77. Watkin’s letter to The Times was dated 17 January and also appeared in The Manchester Guardian, 18 January 1879, p. 8. It was his response to the Board majority’s circular mailed out on 16 January. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 74

published in the press. He wrote to the newspapers that had carried the Watkin letter he wanted to see “corrected”, stating:

Yesterday a complete answer was inserted in the half-yearly report which was passed by the Directors on the full understanding that Sir Edward Watkin would sign it signifying his own dissent from the paragraph and that it would be in the hands of the proprietors tomorrow. This however will not be done and I therefore give the paragraph for the information of the public.174

What happened next raises some intricate questions about company governance and legal proprieties. On the morning Rawson’s letter appeared in the press (Wednesday, 22 January), Watkin informed his fellow SER directors in writing, through Shaw, that he regretted to see that letter, that he had crossed out the “irregular” matter in the Directors Report, had signed the rest (“all that ought to be signed”), and wished to see that sent out to the shareholders. He stated that he had taken legal advice “this morning” prior to doing this. Five of the anti- Watkin directors who were in the building that day convened themselves as a “special meeting of the Board”, but did not issue a notice to all their fellow SER directors calling this meeting prior to convening thus. Beattie took the chair and a resolution was passed instructing Byng to sign the “full” version of the Directors Report, and for this then to be issued with the accounts “at once”. This was done that same afternoon/evening.175

At the “normal” board meeting the following day, Watkin protested against these actions. In particular he protested against the minutes of the meeting of the five directors the preceding day being recorded in the “Board minutes”, as that meeting had not been a properly constituted board meeting. In May, June and July 1879, when his opponents were no longer in a majority on the board Watkin returned to this issue and appears to have been contemplating legal action against Byng for signing-off on the longer version of the Directors Report on the strength of a “board resolution” which he should have known was not a “real” board resolution. 176 Byng was a barrister, Middle Temple, 1852. After 10 July, however, the SER Board minutes are silent on this matter. Watkin may have worried that if it were pressed further legally, questions would be raised about his own behaviour in not signing-off on the same longer version of the Directors Report on the strength of an arguably valid board

174 The Manchester Guardian, 22 January 1879 p. 5. 175 TNA RAIL 635/46, pp. 490-491, minute 892. 176 TNA RAIL 635/47, pp. 2-3, minute 8; p. 75, minute 105; p. 103, minute 168; p. 115, minute 201. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 75

resolution passed on 20 January. Alternatively he may have taken the view that once he was into the second half of 1879, he would focus his energies on higher priorities.

Knatchbull-Hugessen’s diaries give us an interesting insight into how the pro-Watkin group’s campaign for shareholder proxies functioned. The campaign was coordinated by what Knatchbull-Hugessen referred to as the “election committee”. He records the first meeting of this committee as having been held in the offices of the ELR on 2 January. And that appears to be where most of its subsequent meetings were held. John Bell (1841–1911), the secretary of the Metropolitan Railway, was a member of the committee, and the offices of the Metropolitan Railway were where the main work of processing the incoming signed proxy forms was conducted, during the period following the mail-out of the forms on 16 January. Some representative entries from Knatchbull-Hugessen’s diary on this are:

(20 January) … to the Metropolitan offices c. 2.30 and stayed there till past 7 working – near 1,100 proxies and I suppose about 23,000 votes – not enough if we are to reach 1,700 proxies tomorrow.

(21 January) at Metropolitan offices before 9.30 … between 300 and 400 new proxies … All in better spirits about the election.

(22 January) over to the Metropolitan offices soon after 9. [Watkin] came up with 300 proxies … I left just before 6, the proxies being about 1,850 and the voting power 37,000.

(23 January) went to Metropolitan offices about 9 and remained there till 6pm … About 2,100 proxies in but some mistakes yesterday about the votes as they seem at just 41,000 … I hope tomorrow night to have reached 46,000 votes.177

It seems likely that in the processing of this large volume of paperwork in the offices of the Metropolitan Railway, Bell was not the only salaried officer of that company to “lend a helping hand”. The anti-Watkin Railway News clearly believed so. Its editorial of 8 February stated that the total pro-Watkin vote should be regarded as having been low, in light of

… the well drilled organisation for the contest, which had been planned weeks before it was practically commenced; the extensive employment of paid

177 Knatchbull-Hugessen Papers U951, F25/31, entries for dates cited. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 76

canvassers in town and country, … the services rendered by the officials of the East London and Metropolitan and other lines …178

More telling than this Railway News assertion, though, is Knatchbull-Hugessen’s diary entry for 2 April 1879. He records that that evening Watkin chaired a small dinner party (14 being the total present) at the Whitehall club: “… the successful candidates in the SER contest presented a testimonial to Bell for the work he had done”. Fenton, the Metropolitan Railway’s general manager, and Tomlinson, its resident engineer were among those present.179 Samuel Simon, the secretary of the ELR, was a member of the Watkin group’s “election committee”. But office facilities were probably the ELR’s main contribution to the campaign, rather than manpower of which it employed very little.

Other than Bell and Simon, the membership of the “election committee” appears to have consisted of Watkin and Knatchbull-Hugessen, the four pro-Watkin candidates themselves, plus Roger Eykyn and R.W. Perks. Roger Eykyn had played a core role in Watkin’s proxy battle at the GER in 1876 (see Section III above). He was a Liberal party politician as well as a stockbroker, having been elected to Parliament for Windsor at a by-election in 1866, and retaining the seat in the 1868 general election but losing it in 1874. Writing on Eykyn at a later time in his career, David Kynaston stated: “Eykyn was clearly one of those stockbrokers who made it his business to be on nodding terms with everybody who was anybody”.180 It is easy to see why Watkin had invited Eykyn onto the SER election committee. Watkin knew him well, and knew directly of his skills, connections and experience. Eykyn was 48 at the time of the SER proxies campaign. It is less easy to see why Watkin invited Perks onto the committee. He was 29 and had gained his qualification as a solicitor only in April 1875. If Watkin had reserved a seat on the committee for a legal adviser, one might have expected him to prefer a person who was older and more experienced. But Watkin was notoriously distrustful of railway lawyers. In 1872 he had told a meeting of Metropolitan Railway shareholders:

At the opera, if we look at the lady occupants of the best boxes, who are glittering with the best diamonds, and ask who they are, we are told that they are the wife

178 Railway News, 8 February 1879, p. 180. 179 Knatchbull-Hugessen Papers U951, F25/31, entry for 2 April 1879. The name of one of the attendees is indecipherable. The others were: Tufton, “self”, Lord A. Churchill, Lucas, Perks, Sir Mordaunt Wells, Burchell, Mewburn, Young. 180 David Kynaston, The City of London, volume II, Random House, London, 1995, p. 123. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 77

and daughter of Clodd, the great railway contractor. On the park whose carriages, horses and equipages are the most fashionable? Why those belong to Plausible, the great railway engineer. And if we hear of some poor nobleman’s estate being in the market who buys it? Why Vampire the great railway lawyer.181

The sequence of his rhetoric here seems to suggest that Watkin viewed the lawyers as the worst of these three sets of predators upon railway shareholders. This 1872 passage was no isolated outburst. Watkin told the SER half-yearly general meeting of January 1885:

A friend wrote to me this morning in the expectation I suppose that I should say something of a jocose character about lawyers, and he told me a story of a lawyer in the Black Country who had swallowed a half-sovereign. They used the stomach pump to him and emetics, and all that kind of thing, but all they could get out of him was to pump up three shillings and four pence (much laughter).182

If Watkin did feel he needed a legal adviser on the election committee to vet outgoing circulars and letters for legal problems, on a fast turnaround basis, and similarly monitor the opposing side’s output for legal points that could be used against them, it may be that on very strong commendations from Mewburn that Perks was a different type of lawyer (and of appropriate high talent), Watkin was willing to take a gamble. Mewburn may also have been able to assure Watkin that legal advice from Perks was actually legal advice from “Fowler and Perks” and point to the experience and standing of Perks’s senior partner, and also to the valuable support Fowler had already given Watkin and Mewburn at the SER’s July 1878 half- yearly general meeting (see Section II, above).

The role of Mewburn in Watkin’s struggle at the SER board over this period 1876–79 was substantial. Symbolic of this is Knatchbull-Hugessen’s diary entry for the evening preceding the public climax of the struggle, the SER half-yearly general meeting of 1 February 1879:

[At 8.00 p.m.] Sir E Watkin and Lady Watkin and I, Bell, Withers, Perks and Fowler dined with Mewburn, − Tufton came in after 11. Settled tomorrow’s programme and to bed about 12.183

181 Quoted in Hodgkins op. cit., pp. 352-3, with his source cited as Herapath’s, 19 October 1872. 182 TNA RAIL 1110/425, p. 1262. 183 Knatchbull-Hugessen Papers U951, F25/31, entry for 31 January 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 78

Robert William Perks as a young man

Mewburn, with Maclure, had organised the pro-Watkin shareholders’ “Requisition” of September 1877. A year prior to that, in August 1876, Mewburn had spoken in defence of Watkin and his son Alfred in the face of the attacks by Whetham and Samuel Fielden. In July 1878 it was Mewburn who proposed the pro-Watkin motion at the SER half-yearly general meeting expressing shareholder confidence in Watkin and a desire for him to continue as company chairman. In January 1878 Mewburn had been the most reluctant of the three pro- Watkin “outside” candidates for the SER board to withdraw his candidature under the cessation of hostilities brokered by Rawson. In January 1879 it was Mewburn who took on the role of being the highest-profile of the four pro-Watkin candidates in the campaign to Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 79

secure a pro-Watkin majority on the SER board. And Mewburn was subjected during that campaign to more strenuous attempts to smear his character than the anti-Watkin forces deployed against any of his three running-mates.

This smear campaign against Mewburn commenced at the meeting of SER shareholders called by Watkin and held in Manchester on 6 January 1879. Mewburn attended that gathering. He was not referred to in Rawson’s address to the meeting. But when Rawson concluded, the next speaker was Buckley’s brother-in-law Hugh Mason. Having declared he was there “to advocate the independence of the board of directors against the autocracy and the dictation of any single individual upon that board”, Mason went on to describe Bibby, Buckley and Rawson as substantial shareholders in the company:

… men of great railway experience, men we have known the whole of our lifetime, and men of considerable wealth and social position, and great business habits and experience.

He then singled out Mewburn, making no mention of the other pro-Watkin candidates, saying:

Mr Mewburn, of the Manchester Stock Exchange, had at one time £300,000 in the company, and at another time his holding was down to one-tenth of that amount. Mr Mewburn was constantly in and out, for some purpose of his own and his holding was continually varying. It was not such men as this that he wanted on the board as directors.184

Four speakers later the Rev. T. Green rose to press this point further. Green was a friend and neighbour of Buckley and Mason and was described by Watkin as the minister “who had the care of the souls of Mr Mason and Mr Buckley”. Green said:

… it seemed to him an extraordinary thing that when a gentleman found himself in a minority on a board he should appeal to a constituency which could not be well informed upon matters of this kind.

Following a few more words on governance issues, he continued:

184 The Railway Times, 11 January 1879, p. 24. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 80

His confidence in the company was not increased by finding that a very distinguished speculator was largely interested in it. He would rather see in it men who were engaged in commercial pursuits of a less hazardous kind.185

Mewburn rose and denied he was a speculator. He said that “like his friend Mr Rawson” he was a member of Manchester Stock Exchange and: “had conducted his business with success and prudence, and retired from it twelve years ago. He had not been on the Manchester Stock Exchange for twelve years”. Mewburn went on to say that he had built up his holding in the SER gradually over a period of about 15 years and that he had not sold any SER shares during that period except in July 1878 when

… being fearful of the consequences of the existing complications in the East, and like a prudent man, he sold £100,000 worth of his stock … and since had brought back more than half of it …. He did not say that all the stock he had was in his own name, but he did say and he was prepared to prove it, that he was interested in the stock of the company to the extent upwards of £300,000.

Green refused to withdraw what he had said, asking “if it was a crime and a libel to say of a member of the Stock Exchange that he was a distinguished speculator?”. Mewburn refused to answer Mason’s call for him to disclose his own “individual personal holding” in SER shares.

Watkin was not pleased that the discussion had got so far away from the traffic development policy of the SER, but his opponents argued that since Mewburn’s circular had paired that policy issue with turning out Bibby, Buckley and Rawson and replacing them with new pro- Watkin directors, it was reasonable for them to press that a resolution be put to the meeting:

That this meeting protests against the action of the chairman of the South-Eastern in endeavouring by unusual and exceptional means to influence the shareholders to turn out of office three directors whose services to the company have been for many years faithfully and honestly rendered.

Trying to avoid putting this resolution, on the grounds that it “arose out of the diversion of the meeting from its original purpose”, Watkin said “he had nothing to do with anything that Mr Mewburn had said in his circular”. It is hard to imagine how Watkin could have defended

185 loc. cit. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 81

that statement. Rawson protested against it saying that “Sir Edward had been acting with Mr Mewburn for a long time”. Watkin backed down and put the resolution to the meeting. It was rejected.186 But this tactic of questioning Mewburn’s character and the size and nature of his stake in the company clearly had the potential to win over to the anti-Watkin side some of those SER shareholders inclined to believe “there is no smoke without fire” when hearing of interchanges such as the above.

In the circular sent to SER shareholders on 9 January 1879 by the majority eight of the board, a table was given showing the total “registered holdings” (excluding debenture stock) in the company of each director and of each of the “outside” candidates for board seats. Bibby, Buckley and Rawson were reported with £93,400; £55,750 and £17,600 respectively (£166,750 for the three together) while Mewburn, Tufton and Young were reported with £71,450; £2,000; and £4,000 respectively. The circular argued that it was in the interests of small shareholders in the SER for there to be on the board persons such as Bibby, Buckley and Rawson with large personal long-term investments in the company whose self-interest could be expected to be in alignment with that of the more modest scale investors.

They hold a very large stake in your company, which is of material importance to them. They give their time and attention to its affairs because of their great interest in its prosperity and they are directors of no other railway company. They have had the best opportunity of judging as to the causes of the increased value of [the SER] and can assure you that its prosperity has not arisen from any one man’s exertions.187

This was followed up by a circular to SER shareholders dated 20 January, signed by Mellor only. In this he said of Bibby, Buckley and Rawson:

186 ibid, p. 24-25. The resolution was proposed by William Agnew and seconded by Hugh Mason. Herapath’s reported that the resolution was rejected by “a large majority” (Herapath’s, 11 January 1879, p. 29). The Railway Times and the Manchester Guardian were both silent on the size of the voting. 187 Manchester Guardian, 11 January 1879, p. 9. The circular sent out by Bibby, Buckley and Rawson on 2 January had ended with the sentence: “We are the Proprietors of £174,000 of [SER] Ordinary stocks and have, therefore the strongest possible interest in its prosperity” (Herapath’s 4 January 1879, p. 20). It is strange that adding their holdings of preference shares should lead to a lower figure for their combined holdings on 9 January. Perhaps this was a casualty of the definition of “registered holdings” used to get the figure for Mewburn so low. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 82

… they stand pledged to you for the faithful discharge of their duty by a collective investment in the unprotected stock of your Company of £170,000 to which no taint of speculation or jobbing can cling. I will now place before you such facts as are also within my official knowledge respecting Mr Mewburn and his colleagues … Mr Mewburn [says] he is the largest shareholder in the [SER] and interested in the undertaking to the extent of upwards of £300,000 … According to the latest official statement the whole of Mr Mewburn’s holding … is £71,450 … At the Manchester meeting Mr Mewburn objected to being called ‘a distinguished speculator’, and I shall not apply any such term to him, but content myself with stating the following from official records which under the circumstances, I consider it right that every shareholder should know. From January 1877 to January 1879 the books of the Company record upwards of 80 bought and sold transactions on his account in the ordinary and deferred stocks of the Company and representing no less an amount than £260,000. With the knowledge of this fact I must leave the bona fide investors to say whether Mr Mewburn is the most suitable person to be entrusted with the power of controlling for weal or for woe, millions sterling of your property.188

By the time the SER’s half-yearly general meeting was held on 1 February 1879, Mellor was happy to concede that Mewburn was in fact the largest shareholder in the company. But he continued to assert that Mewburn was a large “operator” in SER shares also. He told the meeting:

With regard to Mr Mewburn he was confirmed in his opinion that he was the largest shareholder and a large operator in the stocks of the company. Mr Mewburn would not deny the truth of this.

To which Mewburn immediately interjected “Oh! Yes I will”. There then followed an interchange in which Mellor focussed on the £100,000 reduction in his holdings that Mewburn had himself said took place in mid 1878 and which had shortly afterwards been

188 Manchester Guardian, 22 January 1879, p. 5. This circular was reproduced in full in a number of newspapers, including Railway News, 25 January 1879, p. 117-8. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 83

largely reversed. Mellor said he viewed that as a “large operation”,189 a view many of the SER’s small shareholders would no doubt have concurred with. Mewburn added nothing to what he had said in Manchester on 6 January: that particular change in his SER holding did not represent speculation, but merely the behaviour of a prudent man in the face of the diplomatic crisis that could have resulted in a general European war, until defused by the compromise settled upon at the Congress of Berlin.

What Mellor said at the 1 February general meeting came several days after the end of the battle for shareholder’s proxies, however. It could only affect the behaviour of the small minority of shareholders attending the meeting and able to vote in person. While the battle for proxies had been in progress, the message from the anti-Watkin camp about Mewburn had been a much broader one, seeking to raise two sets of doubts about him: the veracity of his claim to be the SER’s largest shareholder; and whether his interest in the company's shares was really that of a “speculator” rather than that of a true long-term investor. And while that proxy battle had been in progress, the pro-Watkin camp’s response to these attacks on Mewburn’s character had been curiously muted. Its focus was on the overall size of Mewburn’s holding there and then. The issue of how much “churn” it had been subject to, and might continue to be subject to, was not specifically addressed, except by asserting Mewburn to be an honourable man highly respected by all with knowledge of him.

At the SER’s board meeting of 9 January 1879, a letter was read out from Mewburn’s son-in- law R.W. Perks, dated that same day:

I am instructed by Mr Mewburn to say that he is ready at any time upon receiving two days notice to produce his books for inspection by the professional auditor of the company, Mr Waterhouse … the auditor simply confines himself to a statement whether Mr Mewburn’s assertions [about total size of holding] are correct or not and that he does not communicate to anyone private matters he may see in the books.190

189 Manchester Guardian, 3 February 1879, p. 6. 190 TNA RAIL 635/46, p. 474, minute 856. This is the first time the name of R.W. Perks appears in the SER Board minutes. His name had not been recorded there when he had accompanied a deputation of the promoters of the Cranbrook and Paddock Wood Railway to a meeting with the SER board on 18 July 1878. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 84

Early the following week a circular was sent out to SER shareholders signed by Whatman, Tufton, Mewburn and Young. After setting out a list of the five objects of their candidature – the first of which is “To vindicate the right of the proprietors to elect independent candidates in place of outgoing Directors” – this circular goes on to address the issue of Mewburn’s shareholding in the company:

With questionable taste, the majority of your Board have published the amount of stock standing in the name of each individual Director and candidate. Mr Mewburn who has stated that individually he is interested in the undertaking to the extent of upwards of £300,000, offered to submit this statement to be verified by the auditor of the Company, Mr Edwin Waterhouse, but this the ‘majority’ declined. As a matter of fact collectively, we are interested in your stock to nearly double the amount held by our three opponents.

This circular then concluded with a P.S. which responded to criticisms from the anti-Watkin camp about “plurality of office-holding” on the pro-Watkin side by setting out details of the non-SER business interests by Byng, Buckley and Rawson. The Rawson list is the longest: chairman of four public companies, a director of the Bridgewater Navigation Company (with Buckley its deputy-chairman), a trustee of the Erie Railway Company, and three other interests cited.191

The Perks/Mewburn proposal for an Edwin Waterhouse audit seems to have been designed to provide objective confirmation of the total size of SER shareholdings owned by Mewburn while at the same time holding back from the majority directors information about the identity of the nominee holders in whose names over three quarters of that total was registered. In The National Archives at Kew, there is what appears to be a copy of the SER share-register at late August/early September 1876 which was used for the computation of shareholders’ entitlements to a one-for-ten offer of new stock made on 14 September. This register has a number of annotations in purple ink which seem to indicate the name of the beneficial owner of nominee holdings. If that interpretation is correct, Mewburn’s total beneficial holding, at this date was a little below £300,000, of which £79,500 was registered in his own name and

191 Herapath’s, 18 January 1879, p. 64. Among the five objects of their candidature, the traffic- development policy comes third: “widening-out the area for traffic all over London, and connecting our system with all the Northern lines without further outlays of the capital of South Eastern Proprietors”. The second was “… giving to the Chairman a fair working majority …”. The last two were improvements-to-SER-services matters. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 85

the rest in the names of four banks: the Belfast Banking Company (£54,000); National Bank of Scotland (£6,000); Ulster Banking Company (£89,100); and the York City and County Banking Company (£45,700).192

Why might a man in Mewburn’s position choose to have so large a proportion of his total shareholding in a company registered in the names of banks? Three main possibilities are available as answers to that question. Firstly that Mewburn had bought the shares with borrowed money – what is now called “buying on margin” – and both now and in that period a lender would normally want the shares registered in the name of the lender to facilitate foreclosure in the event of default on the terms of the loan on the part of the borrower.

The second possibility is somewhat more complex. When Mewburn told the 6 January 1879 Manchester meeting of SER shareholders that he had retired from conducting his business twelve years earlier and that “he had not been on the Manchester Stock Exchange for twelve years”, merely remaining a member of that Exchange, that was not quite the entire truth. Until 30 June 1878 he remained one of three partners in the stock broking firm “Mewburn and Barker”, with his son William Mewburn junior and his son-in-law John Lees Barker. A notice dated 26 August 1878 was published in the London Gazette stating that on 30 June the partnership of three had been dissolved and from that date Mewburn junior and J.L. Barker were the only partners.193 On the London Stock Exchange there was a tradition of maintaining a distinction between members who acted as agents carrying out on the floor of the exchange buying and selling orders placed with them by clients, and members who quoted prices they were willing to buy and sell at as principals in the transactions. For the latter (jobbers) the reward for their services was the gap between their buying price and their selling price (the “buy-sell spread”). For the former (brokers), it was commission charged to the client. A jobber would need to accept ownership of shares sold to him by a client who wanted “to deliver”, and would need to be able to provide shares to a buyer who wanted delivery. In fact the system of fortnightly settlement periods meant that many buyers and sellers did not press for delivery, either reversing their transactions within the set fortnight, or rolling them over into the next fortnight (on a payment for doing-so basis). What this meant was that a jobber who stood on the floor offering to buy or to sell shares in company X needed either to

192 TNA RAIL 635/507 “Allotment of Ordinary Consolidated Stock: 1876 Issue”; pages 178, 19, 189, 254, 281. 193 London Gazette, 30 August 1878, p. 4955. Prior to 30 June 1876, there had been a fourth partner, Thomas Barker, father of J.L. Barker (see London Gazette, 1 September 1876, p. 4840). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 86

own reasonably large quantities of those shares in order to meet requirements to deliver, or needed pre-arranged access to tap into some large shareholder(s)’ holdings if that need emerged. Not to do either was a recipe for a short career as a jobber. On Britain’s provincial stock exchanges, the distinction between broker and jobber was not a subject of any particular emphasis. A prominent Manchester stock exchange firm such as Mewburn and Barker would have been expected to engage in both roles, some of the time executing buying and selling orders on behalf of clients and at other times buying and/or selling as principals.

If the stock exchange partnership Mewburn and Barker had selected the SER as a company whose shares it would act as a jobber in, willing to quote to an inquiring counter-party a buying price and selling price and then accepting either as a buyer or as a seller whatever volume transaction that party had pre-designated, the partners would have needed to hold an inventory of SER shares and that inventory would have tended to fluctuate in volume. And in such circumstances it might have made sense for such inventory to be held in the name of the partnership’s bankers – partly to facilitate paperwork and partly to give those bankers some security against loan finance they might from time to time be providing to the partnership. Hence Mewburn may have held some SER shares as fundamentally a personal investment in the company, akin to the holding of other non-stock exchange member personal investors, and held some other shares as the senior partner in Mewburn and Barker with those shares being in the nature of “inventory holdings”, to support the business activities of that firm. And the distinction between the two categories would probably have been blurred. In a partnership of this type, it would have been rare to distribute all of each year’s profit among the partners. Much of that would be recorded as added to the partners’ capital in the firm, the “property” of a particular partner, but held in the form of the assets owned by the firm – and usually not identifiably “separate” from the general pool of such assets. Once Mewburn ceased to be a partner in the firm “Mewburn and Barker” complications of this nature ought to have been ironed-out. But some of that “ironing-out” may have looked on the SER share register like Mewburn altering the size of his overall holdings in the company when it actually wasn’t. And other parts of the ironing-out may have been agreed between Mewburn and his son and son-in-law to be phased in over time, so as to reduce the impact of the costs of altering the “formal” ownership details of assets.

The third main possibility for Mewburn choosing to have a large proportion of his SER shareholding registered in the names of banks is that this was associated with a need (or Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 87

potential need) to provide those banks with security for a purpose that was not the purchase by Mewburn of those same shares, and not to support the business activities of the Mewburn and Barker stock broking firm, but was something else. It is not proposed to go into any detail on this third possibility, but simply to note that it is there. Mewburn may have needed to borrow for some other purpose, or may have wanted standby borrowing facilities in place. He may have acted as guarantor to the borrowings of some person (or persons) in whom he had great confidence, or to the borrowings of charitable organisations he supported. Watkin’s opponents may have been hoping that in the absence of Mewburn revealing more information to SER shareholders about the arrangements surrounding his very large holding of the company’s shares, many would be inclined to believe the worst of a man who a minister of religion had publicly described as “a distinguished speculator” and who Mellor had suggested bona fide investors should be wary of.

Mewburn chose to maintain his privacy during January 1879, and a century and a half later that privacy remains difficult to penetrate. Even after the results of the SER board elections were declared at the reconvened general meeting on 6 February, Mellor continued to question and Mewburn continued to stonewall:

Mellor: if it be as he says … there is £230,000 which Mr Mewburn holds, subject to the loans he obtained upon that amount of stock … Mewburn: that does not follow. Mellor: Mr Mewburn has a perfect right to deal in any way he thinks fit with what belongs to himself … But when a gentleman offers himself as a director, then I think transactions such as are evidenced in the books of the company should cease … now that he is a director of the company his operations in the stocks of the company should not be speculative, but should be for the purpose of investment. Mewburn: I repel the impertinent remark of Mr Mellor. I am not to be told by him that I am not to do this and not to do the other. Who is Mr Mellor that he is to tell me that?194

Mewburn had come top of the poll in the board elections (see Table 2) suggesting either that the bulk of the SER’s shareholders were willing to trust him when he said he was not a

194 TNA RAIL 1110/425, p. 1031. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 88

speculator or that they were willing to accept the risk that he was, but did not weigh that risk very heavily in the context of the other matters at stake.

Table 2: Result of the Poll, February 1879

Number Stock Votes Average stock Average votes of voters represented (£) per voter (£) per voter Mewburn 90 in person 304,220 3,077 3,380 34.2 2,739 by proxy 4,584,673 59,321 1,674 21.7 Tufton 95 in person 304,690 3,102 3,207 32.7 2,737 by proxy 4,584,433 59,293 1,675 21.7 Whatman 89 in person 301,800 3,054 3,391 34.3 2,739 by proxy 4,584,893 59,328 1,674 21.7 Young 85 in person 298,360 2,980 3,510 35.1 2,739 by proxy 4,593,583 59,295 1,677 21.6 Rawson 61 in person 413,150 3,370 6,773 55.2 1,609 by proxy 3,546,029 39,514 2,204 24.6 Buckley 59 in person 423,700 3,420 7,181 58.0 1,609 by proxy 3,531,129 39,403 2,195 24.5 Bibby 58 in person 419,660 3,378 7,236 58.2 1,610 in proxy 3,532,179 39,429 2,194 24.5 Cazalet 52 in person 399,610 3,166 7,685 60.9 1,611 by proxy 3,549,779 39,578 2,203 24.6 Source: Herapath’s, 8 February 1879, p. 148, with the final two columns being author’s calculations from the figures published there.

It is possible that some of the circulars sent to SER shareholders by the two sides during the campaign did not find their way into the railway press or the principal daily newspapers. But in all the circulars that were thus published, no mention is to be found of the fact that Mewburn was at this stage deputy chairman of the Star Life Assurance Society. He had been a director of that company continuously since 1866, and had been elected deputy chairman in 1871.195 The Star was a large, successful, conservatively managed Life Insurer which had been established in 1843 principally to provide life insurance policies to Wesleyan Methodists. Its articles of association required that at least half of its directors should be Wesleyan Methodists. Those who were not were typically wealthy high profile lay members of other non-conformist religious bodies. That such a board would elect as its deputy chairman a man suspected in business circles to be a distinguished speculator would seem fundamentally unlikely. This no doubt explains why Watkin’s opponents, although keen to inform SER shareholders of the companies Young and Whatman were directors of, and of the fact that Tufton had no previous experience as a company director, chose to remain silent on Mewburn’s c.v. in this respect. One imagines that the Watkin camp’s canvassers would have

195 London Metropolitan Archives (LMA), CLC/B/005/ST1/5/1/20. Star Life Assurance Society Board Minutes, meeting of 13 October 1897, minute 5861 (Mewburn’s letter of resignation from the Board). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 89

been happy to point this out to shareholders who appeared to need to learn more about Mewburn.

One final comment regarding Mewburn’s reticence in the face of Mellor’s accusations is worth making. The Railway News editorial on the poll result included the following:

An absurd arrangement with respect to the voting … gives great encouragement for splitting votes. In the case of ordinary stock, every holder up to £600 has [one vote per £30] while only one vote is given in respect of each additional £150; and in the preference stock there is one vote for each £60 up to £1,200 and afterwards one additional vote for each additional £300. Thus ten holders of £600 each would have 200 votes, while a holder of £6,000 of stock would have only 56 votes. The extent to which this splitting of votes has been carried is not easy to estimate, but it is a fact not without some interest that while the average proxy was £1,675 on the one side, it was as high as £2,200 on the other.196

The figures in the final two columns of Table 2 illustrate the point the Railway News raises here. Either the Watkin camp were more successful than their opponents in attracting support from genuine small shareholders in the SER, or they were more successful than their opponents in “creating” additional small shareholder supporters by suitably subdividing the holdings of large shareholder supporters. In the poll of SER shareholders in August 1876 that Watkin had almost lost to Whetham, on the issue of Alfred’s resignation from the company, the boot had been on the other foot. Each pro-Watkin proxy averaged £7,846 of stock and 62.3 votes, while each pro-Whetham proxy averaged £1,393 of stock and 18.6 votes.197 If the discrepancy between the size of Mewburn’s SER shareholding registered in his own name and the overall number of SER shares owned by him was the result of efforts during 1878 to improve the voting power of the Mewburn-owned shares, that would also have involved a high volume of activity against Mewburn’s name on the SER share-register, of the type Mellor drew attention to. And under this scenario Mewburn could genuinely deny any speculative intent and deny buying with borrowed funds, yet would have found it advisable to say as little as possible further.

196 Railway News, 8 February 1879, p. 180. 197 Author’s calculations from figures published in RAIL 1110/425, p. 901. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 90

How powerful a tool might shareholding-splitting have been in these board elections? One way to get some feel for the answer to that question is to perform the following counterfactual: take the total value of stock represented by Mewburn’s proxies and imagine that instead of the profile of holdings that it did consist of, it had been comprised of a profile of holdings equivalent to that of the proxies voting for Rawson, i.e., average stock per voter of £2,204 and average votes per voter of 24.6. That would have reduced Mewburn’s votes from proxies to 51,172. Performing the equivalent exercise of imagining the total value of stock represented by Rawson’s proxies to have consisted of a profile of holdings equivalent to that displayed by Mewburn’s proxies gives an increase in Rawson’s votes from proxies to 45,967. This suggests that the difference in the proportions of small shareholders recorded as having given proxies to the two sides was a significant factor in the size of the pro-Watkin team’s majorities, but probably not a decisive factor.

There is, however, an additional reason for believing that the figures recorded in Table 2 may give an exaggerated picture of the strength of underlying shareholder support for Watkin vis a vis his opponents. Knatchbull-Hugessen recorded in his diary for 3 February that the pro- Watkin camp had lodged 2,970 proxies while “Byng’s side had put in 2,070 proxies”.198 Comparing these figures with those in column one of Table 2 suggests that a much larger proportion of Byng’s proxies (over 22 percent) had been “set aside” during the vote counting process than of pro-Watkin proxies (under 8 per cent). The pro-Watkin camp were receiving feedback from their scrutineers that this was going on, and they became suspicious and concerned as to why their opponents’ scrutineers were not being more vigorous in defending their own side’s proxies and challenging pro-Watkin proxies. On the evening of 5 February, Knatchbull-Hugessen dined with Withers and Watkin. His diary records:

… the latter was in a very excited state, the majority being for our men, but he said that Rawson had been holding his scrutineers back, that they said they would not be ready tomorrow, would try to delay matters for weeks or months … [after Watkin left] Withers expressed his strong fear that Watkin was so weak that he would compromise and allow Rawson over at the last moment.199

If the result of the poll had not been declared on 6 February, and the SER half-yearly general meeting had had to be adjourned again, what would that have meant for the SER board?

198 Knatchbull-Hugessen Papers U951, F25/31, entry for 3 February 1879. 199 ibid, entry for 5 February 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 91

Clearly the four directors who had “retired by rotation” on 1 February would not have been entitled to vote at any board meetings held while the outcome of the poll remained pending. But the remaining eight “normal” directors were split 5 to 3 against Watkin. Joshua Fielden had chosen to spend the British winter at Cannes where he kept his yacht. Whether this was entirely on doctors’ orders, as he claimed, or a matter of lifestyle preference is not completely clear. But as long as he stayed away, it meant the numbers were 4 to 3 against Watkin. It is therefore understandable why Watkin should be in an “excited state” about the prospect of any substantial delays in finalising the elections for the four vacant board seats. He could be out-voted on the SER board during such a period. That in turn could lead to the SER proceeding with formal opposition to the parliamentary Bills being promoted by the ELR and by the Metropolitan Railway to give effect to the Watkin policy for linking the SER to the northern rail systems via the ELR. The committee stages of those Bills were likely to commence in March. Successful delaying tactics by Rawson thus had the potential to disrupt the progress of those Bills.

Between the evening of 5 February and 10.00 a.m. on 6 February there had been an interesting development however. The thirteenth member of the SER board, Monsieur Adam, who did not normally attend board meetings, chose to attend the meeting of that morning, and indicated that he would support the chairman on contentious votes. That meant that on such matters the voting would be 4-4, and as Knatchbull-Hugessen put it “we had the casting vote if anything occurred”. It appears that Rawson visited the boardroom and was informed of the situation, and that he then went off to have further discussions with his scrutineers. Those discussions appear to have led Rawson to the view that the “delaying tactics” approach should be called off. Knatchbull-Hugessen’s diary records the board meeting breaking up a little after 11.30:

… all committee and Board business was over without any row and we, the majority went upstairs to settle what to do if Rawson’s scrutineers would not agree to be ready – but at 12 they did and we all went into the Alexandra Hall where Waterhouse declared the numbers.200

If Rawson had not “held back” his scrutineers during that week, the numbers which Waterhouse declared would probably have shown smaller majorities for the pro-Watkin team than those reported in Table 2. And likewise if there had been a delay to allow those

200 ibid, entry for 6 February 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 92

scrutineers to make up for lost time. But the fact that Rawson pulled the plug on the delaying tactics suggests he did not believe those majorities could be whittled away completely and that the likely costs of pursuing legal challenges to draw-out the process were not likely to be justified in terms of the expected gains. Rawson may well have reached a different decision if Joshua Fielden had been in England and occupying his seat at the SER board, or if Monsieur Adam had been as unwilling as Fielden to forsake France for London in that February.

From what was said immediately following the declaration of the poll results on 6 February 1879, it is not clear whether Watkin’s opponents had reached any shared view on what course of action they should now pursue regarding the situation on the SER board. Rokeby Price told the meeting that the results meant that the shareholders had decided the question: “They have decided, sir, that you shall be more of an autocrat than you ever were”. Samuel Fielden chose to look on the bright side: “I hope that within twelve months we shall see the decision of this day reversed”.201 Rawson confined himself to saying:

… that the large poll which he and his colleagues had succeeded in gaining was a full justification, if justification were required for not departing from the Board without an appeal to the shareholders.202

But Rawson also expressed continuing strong animosity towards the victors. Mewburn had ended his statement of “personal explanation” to the meeting (regarding the accusations of his being a speculator in the company’s shares) with the words;

I regret exceedingly, however, that some statements in a joint circular that bears my name have given Mr Rawson pain. I am very sorry for it … I regret exceedingly to have been the cause of pain to him.

Rawson did not respond to this immediately, but when he did address the meeting he rejected it angrily saying:

… when Mr Mewburn entirely retracts every word he has said to my detriment … that is the apology that a gentleman ought to make, and the only one with which I can be satisfied.203

201 TNA RAIL 1110/425, p. 1031-2. 202 The Manchester Guardian, 7 February 1879, p. 7. 203 TNA RAIL 1110/425, p. 1032. The circular Rawson seems to be referring to here is the one which had listed his business interests outside the SER. Rawson’s complaint seems to have been Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 93

The editorial in the Railway News on 8 February picked up on Rawson’s comment regarding the poll result, and paired this with an expression of hope akin to Samuel Fielden’s:

The issue of the contest … has been such as fully to justify the course taken [by Rawson, Bibby and Buckley] … The appeal to the shareholders now made shows the salutary effect of time and reflection, and must encourage that section of the proprietors who dare think for themselves, and have the courage to act upon their convictions to persevere in a course which must ultimately bring the management of the South Eastern into accord with the dictates of common sense and the principles which should guide the administration of the affairs of this as of other important undertakings.204

Two days later Samuel Fielden sent out a circular to the SER’s shareholders which ended:

My advice to you shareholders is this: Reverse the decision of the meeting of last Thursday and by turning off your board every member of the [ELR] board, rescue your property from the claws of that bankrupt concern.205

V The SER Board after the declaration of the February 1879 Poll

If the erstwhile majority eight on the SER board were to continue their struggle against Watkin, a suitable place to dig-in and prepare to fight back from was at hand: the process of a shareholders’ committee on the SER’s traffic development policy which Watkin had promised during the campaign for shareholder proxies. It will be recalled that what the shareholders had been led to expect was:

 Watkin to propose a motion at the half-yearly general meeting to establish such a committee;

 its membership to be “impartially chosen”;

“they told the shareholders he was a director of a newspaper. Why was the word ‘director’ put in? Because it meant work and occupation. The fact was that he was a proprietor, and not a director of one of the first newspapers in the north, which he sold out of five years ago” (from Rawson’s address to SER general meeting of 1 February 1879, as reported in The Manchester Guardian, 3 February 1879, p. 6.) 204 Railway News, 8 February 1879, p. 180. 205 Railway News, 15 February 1879, pp. 214-215 (where the circular, dated 10 February 1879, is reproduced in full). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 94

 the committee to report back to an adjourned/reconvened meeting of that same half- yearly general meeting of the company.

By the time of the declaration of the poll on 6 February, Watkin’s thinking regarding the arrangements for this committee had shifted. This may have been influenced by the fears Watkin had developed over the potential consequences of Rawson’s pursuing a campaign of delaying tactics regarding finalising the poll results, and Watkin spotting that there might be similar potential consequences from a delaying tactics campaign over the shareholders’ committee and its work. Indeed Watkin may well have interpreted Rawson’s abandonment of further delaying tactics regarding the declaration of the poll as a decision to shift to a new battleground “in good order”. The SER’s half-yearly general meeting that had been adjourned on 1 February to allow the poll for the board elections, and reconvened on 6 February to receive the poll results, drew towards its close without Watkin proposing a resolution to establish a shareholders’ committee on the company’s policy. Watkin put a plausible-sounding spin to this. He said that the committee “would be of no use unless it fairly represented both the views … unless they had men of high standing and experience who had voted ‘for and against’ on the present question it would be a farce”. Implying that it had not been possible to start a process of identifying such a balanced representation of such men until the poll had been finalised, Watkin said he had now written to Rawson to commence that process and “he intended to agree with Mr Rawson if possible on the names to be selected”.206 And Rawson would have been able to take further comfort from the fact that Watkin specifically stated that

… he did not regard this poll as settling the policy of the company. The new directors … were unpledged entirely … after a reasonable interval the Board would solemnly decide, after consultation with the Committee whether his (Sir E. Watkin’s) policy was right or wrong, and if wrong he would at once submit …207

The editorial in Herapath’s two days later focussed on these announcements regarding the shareholders’ committee:

206 The Manchester Guardian, 7 February 1879, p. 7. 207 loc. cit. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 95

It is clear from this that Sir Edward does not desire to be “autocratic”, but is willing to submit his views to a competent jury of Proprietors. Nothing could be fairer.208

But with the wisdom of hindsight, one can today say that Rawson probably made a tactical error in allowing the general meeting to terminate without the passage of a formal resolution specifying some ground-rules for the committee process.

On 10 February Joshua Fielden took a step which is very difficult to interpret. He sent a letter from the Hotel Bellevue, Cannes to Shaw thanking the latter for writing to him on 6 February to inform him of the results of the shareholders’ poll, and continued:

In consequence of the decision at which they have arrived, I beg to give you formal notice that I resign my seat at the South Eastern Board. Knatchbull-Hugessen’s diaries indicate that he received “news of Fielden’s resignation” on 12 February, but he does not comment on it. The following day the SER board met, with all four remaining members of the previous majority eight present. Fielden’s resignation was accepted. Knatchbull-Hugessen commented that proceedings at the meeting had been “… amicable … all passed off quickly”. Fielden’s letter of resignation was published in Herapath’s of the following Saturday.209 The immediate impact of Fielden’s resignation on the situation at the SER board was minimal. Instead of the twelve normal seats being divided 7 pro-Watkin, 4 formerly anti-Watkin and one absent, it became 7-4 and one vacant. But the 7 were clearly in a position to outvote the 4 in a decision on filling the vacancy. The simplest interpretation of Fielden’s 10 February letter is that he had chosen to desert the sinking ship (of the anti-Watkin cause) and did so heedless of the consequences of that for those of his former team mates whose inclination was to continue the struggle. An alternative explanation would be that Fielden believed Watkin would view the Fielden family’s stake in the SER as being so large that a Fielden family nominee should fill the vacancy. Or he may have believed Watkin would allow the seat to go to the person who had come fifth in the shareholders’ poll and who could therefore claim to be the person next-most-preferred by the company’s shareholders as a whole to sit on the board. But as long as Watkin simply did nothing and allowed the seat to remain vacant, it represented an additional bargaining chip which Fielden had gifted into his hands.

208 Herapath’s, 8 February 1879, p. 148. 209 Knatchbull-Hugessen Papers U951, F25/31, entries for 12 February and 13 February 1879; Herapath’s, 15 February 1879, p. 190. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 96

At the SER’s board meeting of 6 March 1879, a resolution was passed to invite thirteen of the company’s shareholders (named in the resolution) to act as a committee:

To consider in conference with the Board, and finally to decide, the policy of the Company in regard to the extension of the operations of the Company over the proposed Metropolitan Circle, the South London railway of [the LBSCR], and the railway systems north of the Thames, together with such other questions as may arise in connection therewith, and to report.210

The thirteen were comprised of six who had voted for the pro-Watkin candidates in the February poll, six who had voted against, plus one who had voted for neither side. Rawson had had no input into the determination of this list.

At the SER’s half-yearly general meeting of 18 July 1879, Rawson gave his account of the events leading up to the board’s appointment of the committee on 6 March. He said that Watkin’s letter inviting him to participate in determining the proposed membership of the committee had reached him on 10 February and had been marked “confidential and privileged”. He had replied:

I will confer with those large proprietors who have acted with me in the late contest when (emphasis in the original) you give me permission to submit any document or proposal to them. It would, however, be obviously improper for me to nominate the members of a committee or take upon myself any duty which has not been delegated to me.211

Watkin wrote back giving the requested permission. The document comprised a list of 28 SER shareholders selected by Watkin, indicating the size of shareholding of each, and inviting Rawson to nominate six of them. On 3 March Rawson sent Watkin his response:

I have consulted a number of large shareholders who supported the majority of the Board in the late contest. I am requested to inform you that they have no objection to the appointment of a committee. They do not however consider that all the members of the committee should be selected from the list you have

210 TNA RAIL 635/46, p. 523. 211 TNA RAIL 1110/425, p. 1045. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 97

submitted, but that one half of its number should be freely appointed by those who differ from your policy.

Rawson told the July general meeting that he had received no further communication from Watkin regarding the composition of the committee except to inform him of the board’s decision made three days after he had sent that letter.212

Byng, Surtees and Mellor voted against the 6 March resolution to establish the shareholders’ committee on policy. For Byng and Surtees the board minutes record their grounds: that they believed such a committee “unnecessary after the vote of shareholders”. That seems to suggest that on this matter at least there was some distance between their position and that of Rawson and those large SER shareholders he had been in communication with. Mellor’s grounds for opposing the board resolution are not recorded. The board resolution did not specify a quorum for the committee on policy. Of the thirteen shareholders invited to serve on the committee: five did not consent to serve; one consented “conditionally” (James Jenkinson Bibby, younger brother of John Bibby, former member of the majority eight on the board) but attended no meetings; and one consented without specifying conditions but did not attend any meetings. This latter was John Fielden, older brother of Joshua and younger brother of Samuel. Among the five who did not consent to serve must have been the “neutral” selected by Watkin. Although he did not select replacements for the other four, he did select a replacement “neutral” member. Thus when the committee held its first meeting on 19 March, there were seven members in attendance, the six who had voted pro-Watkin in February plus one who had voted neither way. This neutral appears to have been Henry Doughty Browne (1837–1907), member of the London Stock Exchange and a director of the London, Tilbury and Southend Railway from 1875. The committee elected as its chairman Lord Justice Bramwell, who had given his proxy for the February poll to Watkin.213 R.W. Perks was appointed to be secretary to the committee. This meant that Perks would have the task of drafting the report of the committee.

212 loc. cit. For Watkin’s letter to Rawson listing the 28 names, see TNA RAIL 635/46, p. 510. 213 Bramwell’s name had been in the list of “some of the proxies already received” appended to Watkin’s circular to SER shareholders dated 23 January (see Herapath’s, 25 January 1879, p. 88). That list contains the names of two others who served on the committee: A. Gathorne-Hardy, MP and J.W. Mellor QC. The latter was a cousin of Jonathan Mellor the SER board member. Another possibly interesting family connection concerns Perks’s first cousin Murray Griffith (1853-1937). Griffith had been clerk to H. Doughty Browne for five years before himself becoming a member of the London Stock Exchange in March 1877. Within a year he was in partnership with Doughty Browne. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 98

It would be easy to look at the arrangements in place for the SER’s shareholders’ committee on policy by the end of its initial meeting on 19 March and criticise Watkin for having shifted so far from what had been his proposal during the battle for proxies in January. By this stage it would appear that Watkin viewed the time-frame for the committee to complete its work as of higher priority than perceptions by objective observers of whether fair play had been employed in determining the makeup of the committee doing that work. Rawson’s letter of 3 March had been written only after an SER “reminder” letter had been sent to him on 26 February.214 Further delays regarding setting up the committee would not have been in Watkin’s interests, but may have been in the interests of at least some of Watkin’s opponents.

Watkin’s plan for the Metropolitan Railway to be physically linked to the ELR involved Parliament terminating the powers granted to the Inner Circle Completion (ICC) Company in 1874 and extended for a further three years in 1876. The ICC Company had lodged a Bill for the 1879 session of Parliament to obtain a further extension of its powers. It had also petitioned against the joint MDR/Metropolitan Railway Bill providing for the link to the ELR. In February 1879 the chairman of the ICC Company was Sir Charles Whetham, who was also at this stage Lord Mayor of London.215 The preferred outcome of the ICC interests does not seem to have involved preventing the link to the ELR being constructed. Rather, it was for the route of the link between the Metropolitan and the MDR to be their preferred route (along which, Watkin believed, they stood to make substantial gains on property interests)216 and for a renewal of the ICC Company’s powers to allow those powers to be “sold” to the Metropolitan and MDR for a suitable return. The chairman of the MDR, Forbes, appears to have been prepared to be flexible on the first point (that of route), and was happy to see the joint Metropolitan/MDR Bill amended to provide for a payment to the ICC Company in compensation for the termination (or a takeover) of that company’s powers. Forbes and two other MDR directors held board seats on the ICC Company, which might help explain their inclination to be more sympathetic to the ICC interests. Watkin, however was in favour of sticking to a very hard line.

214 TNA RAIL 635/46, p. 522. The letter was signed by Shaw’s assistant Sheath. 215 TNA RAIL 1140/32; Bradshaw’s Railway Manual, Shareholders’ Guide and Directory, 1879; (preface dated 15 February 1879). 216 Hodgkins (op. cit., p. 423) reports that Watkin had obtained information that Newman, the key player in the ICC scheme, “was to obtain £550,000 for surplus land bought as backland and to be sold as frontland on a first class new street, thus making a profit of £400,000”. With Watkin’s preferred route for the completion of the inner circle, that particular new street was not part of the proposal. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 99

The parliamentary process regarding the Inner Circle Bills had proceeded through the various preliminary stages and commenced its more serious stages on Monday 17 March 1879. The Railway News described this as the start of “the great fight of the session”.217 On 25 March Forbes was called to give evidence before the House of Commons Committee examining the Bills. During the course of his evidence he raised the suggestion that the full scheme proposed in the joint Metropolitan Railway/MDR Bill might not in fact go ahead after the passage of that Bill: the Metropolitan Railway might choose not to put money into constructing the link to the MDR, but make the connection to the ELR via Whitechapel only.218 This may well have represented Watkin’s first preference outcome: a termination to the threat of the ICC Company and the MDR constructing the missing link to the Inner Circle, but without obligation on the Metropolitan to put funds into doing something which might be of more benefit to the MDR than to itself; whilst at the same time obtaining authorisation for the Metropolitan/ELR link. If so, Forbes’s raising of this “suggestion” was a very cunning move indeed. At the Metropolitan Railway’s board meeting of 26 March, a resolution was passed that “The Board consider the scheme to be one scheme, one part dependent on the other and the whole necessary for the public requirements”. The Metropolitan board also agreed to instruct their counsel to “reject any foundation” to Forbes’s suggestion. On 3 April the House of Commons committee passed the preamble to Metropolitan/MDR joint Bill subject to the proviso that “the inner circle be completed before any works on the [extension to link with the ELR] are commenced”.219 The Commons committee met further during April to consider compensation arrangements for the ICC Company. The ICC interests informed Watkin on 8 April that if they were not satisfied with these arrangements they would continue to fight the Bill during its House of Lords committee stage.220 It is hardly surprising therefore that by the end of the first week of March, Watkin had decided to be happy to treat Rawson’s letter regarding the SER’s committee on policy as an invitation to opt for a lower profile, lower risk, and lower time duration process than his comments at the 6 February declaration of poll meeting had suggested.

217 Railway News, 22 March 1879, p. 416. 218 This “suggestion” made by Forbes in his evidence to the Committee was reported to the Metropolitan Railway’s board meeting of the following day (L.M.A., Acc 1297/MET1/9, p. 294). See also Railway News, 29 March 1879, pp. 456-458. 219 LMA, Acc 1297/MET1/9, p. 294 and p. 307. 220 ibid, pp. 311-312. Watkin had written to Forbes on 3 April “… It is positively immoral to give away the shareholders’ money to men who have deceived Parliament and injured the public”. (ibid, p. 310). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 100

Knatchbull-Hugessen’s diaries indicate that the committee on the SER’s policy held its second meeting on Friday 21 March, at which he was called in and was “examined about the ‘East London policy’”. Knatchbull-Hugessen also records that the committee met on 26 March at which meeting it examined Hawkshaw, the engineer commissioned by the Metropolitan Railway and the MDR to report on the alternative routes for the link between those two companies’ lines and to draw up the plans for the overall scheme including the link to the ELR. At this meeting Beattie “turned up” (to quote Knatchbull-Hugessen) and talked with the committee.221 The committee then appears to have adjourned pending the receipt of written submissions from invited parties. Watkin lodged his written submission on 3 April, after clearing it with the SER board at its meeting of that day. Mellor objected that the board members had not been given enough time to consider Watkin’s paper properly, but is not recorded as having received any support from other board members in his doing so.222 In its report, the Committee said of its process for receiving evidence:

[The committee] have been favoured with the evidence and opinions of several gentlemen, and been furnished with other means of coming to a conclusion on the matters referred to them. … they regret to say that they have not had the assistance, though earnestly requested, of any Directors opposed to what has been called the policy of the chairman. … Mr Rawson who originally stated that he would communicate his views in writing, has not done so, although the Committee adjourned for a month with a view to his doing so. Mr Beattie, however, attended one meeting and expressed his views.223

It appears that once that month had elapsed and nothing had been submitted by Rawson, the committee moved to finalise its deliberations, taking as the views of those opposed to the policy of the chairman: “the half-yearly report, the special report of the Board dated January 9, 1879, and the account of the proceedings of the annual meeting”.224 The seven signatories of the committee’s report signed-off on the document on 29 April and it was tabled at the SER board meeting of 1 May.

221 Knatchbull-Hugessen Papers, U951, F25/31, entries for 21 March and 26 March 1879. 222 TNA RAIL 635/46, p. 555-557. 223 Herapath’s, 24 May 1879, p. 578. 224 loc. cit. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 101

It is curious that Rawson initially stated that he would provide a written submission but then did not do so. He said at the SER’s half-yearly meeting in July 1879 that he had refused to give his views to the committee because of the way the committee had been appointed “and from whom I did not expect that full investigation of the affairs of the company … which we were entitled to”.225 But Rawson would have been aware of how the membership of the committee had been determined at the time the committee made its invitation to him to inform it of his views. Why did he not refuse and make his protest at that time? One possibility is deliberate delaying tactics. Another is that at that point the seven anti-Watkin voters appointed to the committee had not yet reached a final position on whether they should all boycott its proceedings. A third is that what Rawson initially hoped to present in writing to the committee was a document that had been endorsed as the consensus view of those large SER shareholders who had voted for him in the recent poll, but then found it impossible to produce a document receiving such consensus support within the timeframe available.

Towards the end of his address to the 1 February 1879 SER half-yearly meeting, Rawson had said:

It would be beneficial to our company that the Inner Circle should be made. It would not be injurious to our company that the Inner Circle should be carried to Whitechapel to join the [ELR] line; but we contend that the agreement which we have with the [ELR] – an agreement which is in perpetuity and which would enable us to go to the Whitechapel junction over that line whenever we choose to do so – should remain in full force, and if a Bill is brought before Parliament for the purpose of abrogating that agreement, that we [the SER] should petition against it. … The only division is this – I say emphatically that your interest in negotiating with these lines should be represented by men who have only South Eastern interests at heart.226

In an earlier segment of his address, Rawson had talked of the risks to SER revenues of passengers who would otherwise have travelled on SER trains to Charing Cross or Cannon Street switching, if the ELR’s functioning were to be improved, to services run by companies other than the SER over the ELR’s line. But in the segment quoted here, he seems to be down-playing that risk. It is possible that among the SER shareholders who voted for

225 TNA RAIL 1110/425, p. 1045. 226 TNA RAIL 635/11, Report of proceedings of 1 February 1879 general meeting, p. 37 and p. 41. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 102

Rawson, Bibby, Buckley and Cazalet, there were some who strongly believed that risk to be much greater, or who for different reasons wanted to see the SER oppose Watkin’s scheme for linking the Metropolitan Railway to the ELR: persons with shareholdings in the GER for example, or who were supporters of Whetham and the ICC Company. Whetham himself, of course, remained an SER shareholder and was no doubt seeking to influence the company’s position on the matter. Another factor standing in the way of Rawson being able to produce a consensus-style document on the SER’s traffic development policy was the fact that for many who had voted anti-Watkin this was viewed as a side-issue and a distraction. When Buckley’s brother-in-law Hugh Mason addressed the 1 February meeting sometime after Rawson had spoken, he said:

The question that day was not alone a question of the East London Railway: It was a question far exceeding that in importance. … He accused the Chairman of abusing his power and his position …. He accused the Chairman of abusing his position when he sent for his own son to be locomotive superintendent of the South Eastern and when he ordered him to contest the borough of Grimsby and when he sent for the secretary of the Company to turn election agent for his son.227

In their final appeal for shareholder proxies, their circular issued on 24 January, the majority eight of the SER board had raised the “Alfred issue” again. And the editorial of the Railway News of the following morning gave prominence to this, asserting that Watkin had arbitrarily dismissed Cudworth as the company’s locomotive superintendent to make way for his son:

Mr Cudworth, one of the oldest and most experienced of locomotive superintendents, was dismissed with an amount of rudeness and insult which could only have been displayed by one who removed the then auditor of twenty years’ standing, the present Lord Mayor, because he would not be his subservient tool in the creation of that ridiculous ‘reserve account’.228

O S Nock, in his 1961 history of the SER, stated that Watkin: “sacked J.I. Cudworth … without any knowledge, let alone agreement of the Board”. But it is not clear if Nock had

227 The Manchester Guardian, 3 February 1879, p. 6. 228 Railway News, 25 January 1879, p. 116. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 103

found anything to corroborate this Railway News assertion of that having happened.229 Be that as it may, for those SER shareholders whose primary motivation for being “anti-Watkin” was matters such as the nepotism charge and/or the treatment of Whetham, it probably seemed more attractive to boycott Watkin’s committee on SER policy entirely, rather than to do anything that might be construed by others as giving it any “legitimacy”.

As noted earlier, after a month had elapsed and no written submission from Rawson had been forthcoming, the committee on SER policy moved rapidly to finalise its report. The report set out a brief summary of the views on the company’s policy which Watkin had provided in his submission and concluded that “that policy is for the good of the company and should be pursued”, with the signatories declaring:

This is their own judgement, based on the materials they have had laid before them for forming an opinion, and it is confirmed by the authority of those best qualified to speak …. No one has appeared before them to controvert or oppose those statements …

The remainder of the report summarises the grounds on which the signatories’ “own independent opinion” is based. This essentially consists of the acceptance that the opening up of direct services from the SER’s system via that of the ELR to the systems north of the Thames will divert away from the SER some passenger traffic, but pairing this with the assessment that this effect will be small relative to the volume of new traffic attracted onto the SER system by the coming into existence of so many new travel-options for passengers.230

At the SER’s board meeting of 1 May 1879, Watkin “suggested that a copy of the Report and documents he sent to each Director as confidential papers to read and return to the Secretary”. Mellor refused to be restricted to return the documents and it is not clear whether that meant he had to be satisfied with reading the copies sent to his colleagues or a copy not allowed out of the building.231 A six-member committee was appointed to discuss matters arising out of the report and draft a statement to go out to SER shareholders. The board meeting of 15 May agreed to send to each shareholder a copy of the report, but excluding the appendices, together

229 O.S. Nock, The South Eastern and Chatham Railway, Ian Allan, London, 1961, p. 86. See also footnote 13 to the present paper. 230 Herapath’s, 24 May 1879, p. 578. 231 TNA RAIL 635/47, p. 15, minute 14 and p. 33 minute 43. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 104

with a covering circular prepared by the committee. Mellor voted against this, but his grounds are not recorded.232

If it had been the case that disagreements over the SER’s traffic development policy had constituted the principal bone of contention and “key issue” when the struggle on the SER board was at its most intense (December 1878/January 1879), one might have expected this board meeting of 15 May 1879 to mark a substantial tailing-off of hostilities around the SER board table. Of the four remaining directors from what had been the majority eight, only Mellor had dissented from sending out to the shareholders the policy committee’s report with a circular giving it board endorsement. Byng, Beattie and Surtees appear to have effectively acquiesced in that decision. All four had publicly and prominently associated their names with the principle that a majority board decision should be viewed as a decision of the company. All four would therefore face embarrassment in saying anything in public critical of the policy of pursuing the traffic development policy endorsed by the 15 May 1879 SER board meeting. But, instead of this meeting marking a tailing-off in hostilities on the SER board, it saw an escalation in them. At that same board meeting Watkin launched what amounted to a “turning up of the heat” on Byng, Beattie and Surtees by moving to dump all three from acting as SER nominees on the board of the Charing Cross Hotel Company.

The Charing Cross Hotel Company (CX Hotel) had been registered in October 1862 with Byng, Beattie and Surtees among its initial seven subscribers.233 Byng was the company’s first chairman and by May 1879 had held that office continuously for over sixteen years. As at March 1879 the company’s paid-up share capital was £200,000, of which the SER held £93,120 and private investors the remainder.234 The company had erected its hotel on land owned by the SER immediately adjacent to Charing Cross station. Many users of the station would have viewed the hotel and its refreshment rooms as forming part of the overall facilities of the station. The CX Hotel held the land on which it stood on a long term lease, one of the conditions of which was that the SER had the power to appoint a majority of the directors of the Hotel Company by a process separate from normal elections by shareholders. The segment of the lease providing the SER with this power had itself been drawn up to

232 ibid, p. 34. The six member committee had consisted of Watkin, Knatchbull-Hugessen, Withers, Tufton, Young and Mewburn. 233 TNA, BT31/677/2882. 234 loc. cit. The £200,000 was comprised of £160,000 in fully paid ordinaries and £40,000 in partly paid 4½ per cent preference shares. The SER held over 70 per cent of the prefs, while private shareholders held over 59 per cent of the ords. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 105

conform with clauses in the SER’s 1863 Act of Parliament. This gave that segment the force of law to over-ride normal arrangements for shareholder election of directors, and also meant it could not be varied except with Parliamentary authorisation.

The various legal intricacies associated with the relationship between the CX Hotel Company and the SER had been the subject of a painstaking investigation carried out by Perks for Watkin. It is not clear when Watkin commissioned Perks to do this work, but it seems likely that Perks’s principal findings had been available to Watkin for some time prior to April 1879 when he took the first tangible step towards using such information against Byng, Beattie and Surtees. At the SER board meeting of 3 April, Watkin had a four-man committee appointed (himself, Knatchbull-Hugessen, Young and Whatman) “to confer with the Board of the [CX Hotel Company] as to the threatened competition of the new Grand Hotel and generally”.235 That committee’s report was tabled at the SER board meeting of 1 May. One of its recommendations was:

… the Directors’ fees [of the CX Hotel Company] which are now £1,000 p.a. should be reduced to £600 p.a., the representatives of the [SER] on the Board returning to the Treasurer of the South Eastern £400 out of their proportion.236

Discussion of this report was deferred to the 15 May SER board meeting, at which Watkin gave notice that at the next meeting he would move:

That the recommendations in the report of the committee … be adopted and carried and that further Sir Edward Watkin [plus Knatchbull-Hugessen, Young and Whatman] be nominated and appointed under Seal as this company’s representatives on the [CX Hotel] Board.237

The message here was fairly blunt. In the SER board’s discussions on the report of the committee on the Hotel Company, Byng, Beattie and Surtees could choose to accept Watkin’s view that change at the Hotel was necessary and in the SER’s interests, or they would be replaced on the CX Hotel Company’s board by men who did accept that view. The committee report had painted a picture of the hotel itself as having failed to keep up with the times, with the company’s profits being propped up by a monopoly which the SER had given

235 TNA RAIL 635/46, p. 555, minute 1070. 236 TNA RAIL 635/47, pp. 11-14, minute 13. 237 ibid, p. 34, minute 50. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 106

it (before Watkin became chairman) over bar and restaurant business across Charing Cross station as a whole. The profit stream flowing to the hotel company from this monopoly, the report argued: “was made over to an independent proprietary and taken away from [the SER]”. The report stated that the directors of the CX Hotel Company:

had no recommendations to make in reference to the threatened competition of the new Grand Hotel, or the improvement of the reputation and working profit of the Hotel; that they object to experiments and wish to ‘wait until they can see their way a little further’ while as respects the unfinished ‘annex’ they merely suggest that the building remain as it is for the present.

The committee had not been attracted by that business-as-usual approach and had recommended a thorough repair and upgrade of the hotel and its furniture, a more competitive tariff structure, and a range of cost-cutting measures – including the directors’ fees, as already noted.238

Discussion of the committee’s report was commenced on 15 May but then adjourned to a special SER board to be held on 22 May. Knatchbull-Hugessen noted in his diary for that latter day: “Special Board Meeting was again adjourned after a long altercation”.239 This was the first time since the pro-Watkin group had become the majority on the board that Knatchbull-Hugessen described a board meeting in such terms in his diary.

At the SER board meeting of 29 May, the situation regarding the CX Hotel Company was brought to a head. Three documents were tabled; a document signed by Byng, Beattie and Surtees (but not by the other two directors of the Hotel Company) responding to the SER board committee report; a report (unsigned but stated to be “from the solicitor”) on the legal position regarding the seats held by Byng, Beattie and Surtees on the Hotel Company board; and a follow-up report from the SER board’s committee established on 3 April to look into the Hotel Company. The essence of the second of the three documents was twofold: Byng, Beattie and Surtees had no legal title to be directors of the CX Hotel Company by virtue of nomination by the SER (Surtees’s title on that basis, having expired on 4 April 1879, Beattie’s on 1 March 1878 and Byng’s much earlier); Byng and Beattie could not both claim

238 ibid, pp. 11-14, minute 13. The committee also objected to the present directors’ plan to slow down the paying-off of the CX Hotel company’s mortgage debt in order to maintain high dividend rates on its ordinary shares. 239 Knatchbull-Hugessen Papers, U951, F25/31, entry for 22 May 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 107

to be validly directors by virtue of shareholder election because that would mean a total of four directors had been elected on that basis, breaching the lease and hence the SER’s 1863 Act.240 It appears that Watkin had advised Byng et al. orally at the heated meeting of 22 May that the legal advice he had received was to this effect, and that they had requested to see the SER’s solicitors view on the matter. Note the “coincidence” in timing between Surtees’s appointment expiring and Watkin’s move to establish the SER board committee to look into the CX Hotel Company.

The follow-up report from that SER board committee stated:

… the delay twice given by the Board at the request of Messrs Byng, Beattie, and Surtees has been availed of for the purchase of shares, registered since the last Board meeting, in the name of Mr Mellor. … In the meantime it has become certain that the Chairman and Deputy Chairman of the Charing Cross Hotel Board … have permitted the three (assumed) representatives of the [SER] … to act as Directors of the Hotel without the legal right to sit as nominee Directors. … [Byng and Beattie] either now sit in a double capacity which is irregular and illegal, or are the unauthorised ‘nominees’ of the [SER] and have not even a colourable (sic) right to sit at all. In either case the main condition of the lease of the ground is broken. As these irregularities are grave, the committee suggest that the Board should continue the powers of the committee and should enable them to seek legal assistance in protecting the special interests of the [SER], evidently now in peril.

The SER board resolved to accept the recommendations contained in this follow-up report as well as the recommendations of the committee’s earlier report. Watkin, Knatchbull- Hugessen, Young and Whatman were elected to be the SER’s representatives on the Hotel Company’s board “and that all previous nominations, if any legally made be cancelled and the holder of the same be removed from office if legally holding any …”241

At the end of this 29 May SER board meeting Byng appears to have commenced a personal boycott of SER board meetings. Of the nine meetings held between 12 June and 2 October

240 TNA RAIL 635/47, pp. 60-64, minute 86. 241 ibid, pp. 64-66, minute 86. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 108

1879 inclusive, he attended only one, that being the meeting held on the day preceding the company’s half-yearly general meeting (17 July). Watkin took advantage of Byng’s presence that day to have a resolution passed directing Shaw “to again apply to the Directors and ex- Directors [for the return of company papers in their possession] … and especially to apply to Messrs Byng and Beattie for the return of the evidence given before the recent committee of shareholders on policy”.242 This was followed-up by Watkin giving notice of motion to remove Byng from being the company’s representative on the Dover Harbour Board and replace him with Knatchbull-Hugessen.243

In summary, the period from mid-May through to the end of July 1879 saw a marked upsurge in hostilities between the pro-Watkin grouping on the SER board on the one hand, and the remaining members of the former board majority plus their outside supporters on the other. On 3 June the board of the CX Hotel Company was convened to meet for the first time under the altered situation created by the SER’s board resolution of 29 May. Knatchbull-Hugessen recorded that “Byng and Surtees saw Sir Edward outside but did not come in”. Beattie, they told Watkin, was unwilling to resign as a shareholder-elected director and was intending to challenge the legality of proceedings on the CX Hotel Company board based on an implementation of the SER’s board resolution of 29 May.244 The Hotel Company’s board meeting nevertheless went ahead, and it appears that Perks was appointed solicitor to the company. This meeting also resolved that the hotel’s annexe should be completed as soon as possible. This latter decision was reported in a printed document tabled at the SER board meeting of 12 June, headed “Charing Cross Hotel” and marked “PRIVILEGED – For South Eastern Board only”. That SER board meeting approved Watkin’s proposal “that an independent Counsel’s opinion should be obtained in order that the Directors may act upon his advice”.245

A confrontation occurred in the boardroom of the CX Hotel Company on Monday 16 June. Knatchbull-Hugessen’s diary records that Perks was present, accompanying the four SER- nominated directors (himself, Watkin, Young and Whatman) plus the company secretary for a

242 ibid, p. 118, minute 212. 243 ibid, p. 120, minute 218. This was duly approved by the SER board on 7 August (p. 125, minute 236). 244 Knatchbull-Hugessen Papers, U951, F25/31, entry for 3 June 1879. 245 TNA RAIL 635/47, pp. 74-75, minute 104. The four page printed document (dated 7 June) is pasted into the board minute book at this point. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 109

meeting of the Hotel Company’s board.246 Watkin’s subsequent report on the events to the SER board stated:

Mr Byng and Mr Beattie attended and Mr Byng who seated himself in the chair objected to the presence of Mr Hugessen, Mr Whatman and Mr Young … on the grounds that they did not hold in their own right the qualification of 50 of the company’s shares. Sir Edward Watkin reported further that further legal advice … had confirmed the opinion of the solicitor of the [SER] that the [SER] Board was entitled to appoint Directors notwithstanding the fact that such directors were not shareholders in the Hotel Company. In order, however, to set aside any questions which may be raised … Messrs Hugessen, Whatman and Young had each acquired 50 shares … and were duly registered in the Hotel Company’s register.

Watkin’s report goes on to stress that there hadn’t been any need to do this but the three share purchases had been made to protect the shareholders in the SER and the CX Hotel Company “from needless litigation”.247 Knatchbull-Hugessen’s diary records that “after a wrangle” Byng and Beattie both left, and the board meeting then proceeded normally.

Beattie and Byng must have decided at some stage subsequent to this 16 June fiasco that it was not in their interests to proceed with a formal challenge on the quality of Watkin’s legal advice regarding these matters. On 7 July the CX Hotel Company’s board received their letters of resignation as directors. They attended that company’s annual general meeting on 14 July, however – which they were entitled to do as shareholders. Knatchbull-Hugessen’s diary entry for the meeting reads;

Byng complained of having been unfairly and unjustly treated, and Rawson who had bought five shares in the company to come and make a row, backed him up, as of course did Mellor and Beattie. We had it our own way and then had lunch afterwards, and I was elected chairman and Alfred Watkin deputy chairman.248

246 Knatchbull-Hugessen Papers, U951, F25/31, entry for 16 June 1879. 247 TNA RAIL 635/47, pp. 91-92, minute 133. 248 Knatchbull-Hugessen Papers, U951, F25/31, entries for 7 July and 14 July 1879. Alfred Watkin had already been a member of the CX Hotel Company’s five-member board in November 1878 (Stock Exchange Yearbook, 1879, p. 220), at which time he had been a shareholder-elected director, not an Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 110

Four days later was the day of the SER’s half-yearly general meeting. Rawson, as has already been noted, was highly critical at this meeting of the way in which the SER’s committee on policy had been established. His theme was that rather than be called a shareholders’ committee it could better be described as a “Directors’ committee”. But he said he had no objections to “the broad statements of which the committee’s report was comprised”, and focussed his criticisms on the conflict-of-interest issues which the committee had omitted from its considerations:

… agreements with adjoining companies should be negotiated by persons whose only interest is furthering the SER interest …. The Chairman of the South Eastern ought to be chairman of no other company interfering with your interests [nor] … work in any other interests whatsoever.249

Samuel Fielden broadened out this attack on Watkin’s having taken on “jobs” outside the SER by asking Watkin whether he was still taking £2,500 p.a. for his services to the SER, and in effect challenging him to justify that to the shareholders, if so. When Fielden moved a resolution for copies of the “evidence” appendix to the policy committee’s report to be sent out to shareholders, however, this was defeated. Watkin opposed doing so partly on the grounds of costs, but also arguing that it would be detrimental to the company’s interest if commercial information on its traffic were made public.250 Thus although various of the interchanges during the meeting appear to have been quite heated, the meeting closed without Watkin’s position having taken any significant dents. Knatchbull-Hugessen’s diary note for this meeting was “Rawson made himself obnoxious but got much the worst of it”.251

During the following week, the Parliamentary process regarding the Metropolitan Railway/ MDR joint Bill for completing the Inner Circle and linking to the ELR moved into its final phase. The interests associated with the ICC Company (including Whetham but led by Newman) had fought a rear-guard action during the House of Lords committee stage of the Bill and had succeeded in securing some amendments, despite resistance from Watkin’s

SER nominee. He is recorded in November 1879 as the only shareholder-elected director on the five member board (Stock Exchange Yearbook, 1880, p. 238). 249 TNA RAIL 1110/425, pp. 1045-1047. 250 ibid, pp. 1048-1049. Two years later Watkin claimed to have offered to give Buckley a copy of the evidence section if he would promise it would not become a public document, but Buckley “did not give that pledge, and therefore did not receive it”. (ibid, p. 1141). 251 Knatchbull-Hugessen Papers, U951, F25/31, entry for 18 July 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 111

company, to the Bill as forwarded to the Lords by the Commons. On 22 July the Bill passed its third reading in the Lords, on that amended basis. The Lords amendments were set down for consideration by the House of Commons on Monday 28 July. Watkin, a member of the House of Commons, gave notice of motion to disagree with one of the amendments, but at a special board meeting of the Metropolitan Railway on the morning of 28 July his fellow directors appear to have succeeded in talking him out of prolonging the process and running the risk of incurring more damage from the ICC Company interests (or other opponents). The Metropolitan Railway board resolved: “that the Bill be allowed to proceed, on the understanding that no further amendments should be made therein”.252 The Commons accepted the Lords’ amendments, and the “Metropolitan and Metropolitan District Railway City Lines and Extensions Act” received Royal Assent on 11 August.

With the ruling off of the page on what the railway press had described as “the great fight of the session”,253 it appears Watkin began to look more carefully at where things were going in terms of the continuing hostilities around the SER board table. When the SER board convened for its meeting of 7 August, Byng, Beattie and Surtees were all absent. No “apologies” or explanations of absence were recorded. The principal item of business concerned arrangements for the Cranbrook & Paddock Wood Railway (C&PWR) company (a satellite of the SER’s) to commence land purchases for its proposed line. The board resolved that Byng should be replaced as its nominee on the C&PWR board by Tufton and that Watkin and Tufton be given power “to deal with the whole matter”. Mellor had his dissent from this resolution recorded.254 Another harmonious day around the SER board table! Perhaps Watkin spotted that if word were to spread that this was how the board was functioning, it might not go down well with SER shareholders who had given him the benefit of the doubt in January when he had denied allegations of behaving like an autocrat. Knatchbull-Hugessen’s diary entry for 14 August states “Sir Edward saw Surtees relative to peace”.255

Surtees had not been a director of the SER during the first phases of the struggle on the board. And during this latest upsurge in hostilities since April 1879, he had not been in the direct line

252 LMA, Acc 1297/MET 1/9, p. 480. 253 Railway News, 22 March 1879, p. 416. 254 TNA RAIL 635/47, pp. 130-131, minute 251. The solicitor of the C&PWR company was R.W. Perks. He appears to have been appointed into that position at some time during the first half of 1878. Watkin and Byng had been nominated as the SER’s representatives on the C&PWR board on 15 May 1878 (RAIL 635/46, p. 132, minute 261). 255 Knatchbull-Hugessen Papers, U951, F25/31, entry for 14 August 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 112

of fire from Watkin in the way that Byng, Beattie and Mellor were. Surtees had been appointed to the CX Hotel Company board in April 1878 and had sat on that board, with an appointment that Watkin accepted to be perfectly valid, for just twelve months. He was largely outside the target area of the bulk of Watkin’s invective about the Hotel Company therefore, such as:

Why have all these years been thrown away in listless changes of mind, perpetual minutes and meetings – while capital was lying dead and competition positively invited? The natural effect of incompetent direction has been the establishment of the Grand Hotel …. The Board are responsible; the supporters of Mr Byng, the Chairman, primarily so; Mr Byng especially so.256

Beattie was the principal target of Watkin’s quest to obtain evidence that the purported SER board meeting held on 22 January 1879 had not been legally valid, as it was Beattie who had chaired that meeting. It was Beattie who Watkin pressed to give an explanation at the SER board meeting of 26 June, of the events surrounding the convening of that January meeting.257 Mellor meanwhile was the target for a process Watkin had initiated in connection with the libel action Mellor had commenced against him in November 1878. Mellor wanted to use in the proceedings in that case the report made by an SER board sub-committee chaired by Beattie, tabled at the SER board meeting of 7 November 1878. On 12 June 1879 the SER board established a new sub-committee to re-investigate that matter. Mellor protested against that. The new committee was comprised Whatman, Mewburn, Tufton and Young. The 1878 committee had been Byng, Bibby, Buckley, Beattie, Rawson and its report had exonerated Mellor of any irregular behaviour over certain transactions which Watkin had raised questions over. The new committee’s report, dated 26 June 1879, stated that there had been “irregular” behaviour regarding those transactions but “from the evidence before them there is no possibility of saying who is to blame”.258 Mellor’s case that he had been libelled was thus weakened, and on 2 July he agreed to a settlement of the matter under which further proceedings were stayed. Neither party had won, but Watkin had not lost.

256 From p. 4 of Watkin’s 7 June 1879 “Privileged – For South Eastern Board only” document (pasted into RAIL 635/47 between pages 74 and 75). 257 TNA RAIL 635/47, p. 103, minute 168 (and see also p. 115, minute 201 from the 10 July meeting). 258 TNA RAIL 635/46: p. 340, minute 567; p. 401, minute 694; p. 432 minute 765. TNA RAIL 635/47: p. 74, minute 103; p. 102, minute 161; p. 108, minute 181. The Times, 3 July 1879, p. 4. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 113

Of the four remaining SER directors from the previous majority eight, therefore, Surtees was the obvious choice for Watkin to put out “peace feelers” to, in mid-August 1879. The response, however, was not to Watkin’s liking. Knatchbull-Hugessen’s diary note on the Surtees/Watkin meeting concludes: “Byng requires as a condition the return to the Board of Fielden, Rawson and Co!” (the exclamation mark is Knatchbull-Hugessen’s). At this stage Mellor appears to have joined Byng in boycotting SER board meetings. Neither attended the meetings held 21 August, 18 September, or 2 October. Thus they probably only heard indirectly that at the 21 August meeting a notice of candidature for the board seat vacated by Fielden was tabled, the candidate being Alfred Watkin.259 It is tempting to interpret this as Watkin’s way of saying to Byng “if you want to make unreasonable demands on me, what do you think about this?”.

On 4 September, Knatchbull-Hugessen accompanied Watkin to a further meeting with Surtees:

Sir Edward Watkin, Surtees and I had a talk about Peace which Byng prevents by wanting us to enlarge the Board and re-elect the rejected of last January.260

These talks with Surtees continued through October and into November 1879. Knatchbull- Hugessen does not seem to have been enthusiastic. His diary entry for 8 October reads:

I had to attend the Reconciliation dinner given by Surtees at the Army and Navy Club … I got home about 11.30.

Apart from listing the nine attendees (the eleven members of the SER Board minus Mellor and Whatman), he says nothing further re. the dinner. His diary entry for a meeting on 11 November is more revealing:

Surtees [was] leaning to Byng`s wish that the vacant seat at the Board should be offered to Fielden or Rawson which I will not have [the last 5 words underlined].

But there are signs of progress during this period. Byng recommenced attending SER Board meetings from 16 October. Mellor was absent that day (and again on 30 October), but Beattie and Surtees were both there and the Board minutes contain no suggestion of any hostilities in the proceedings. One symptom of a move towards détente may have been the resolution passed at the 2 October meeting to provide for a clear separation between the role of company chairman and that of CEO of the SER, with Surtees appointed (with Watkin and Knatchbull-

259 TNA RAIL 635/47, p. 139, minute 274. 260 Knatchbull-Hugessen Papers U951, F25/31, entry for 4 September 1879. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 114

Hugessen) to the committee established to identify and hire a suitable CEO.261 Watkin had stated he intended to relinquish the CEO segment of his responsibilities at the declaration-of- poll meeting of 6 February, having briefly alluded to the possibility of this at the 6 January meeting of SER shareholders in Manchester.262 But seeing Watkin acting to deliver on that statement of intention may have been perceived as a positive by Byng et al., particularly with Surtees accorded a place on the selection committee for the new CEO.

We know that on 4 September 1879, Byng was holding out for a return of Rawson to the SER board. That almost certainly means that Rawson was at this time keen to return to the SER board. And that in turn suggests that Rawson was probably contemplating running for election by the shareholders to a board seat at the January/February half-yearly general meeting, if not invited to fill the ex-Joshua Fielden vacancy in the meantime. Was that a prospect that would have concerned Watkin as he reflected on the situation during September and October? Possibly so. Watkin would have to expect the Fielden family, with their very deep pockets and broad financial and commercial connections to back Rawson to the hilt; and for Nathaniel Buckley and his family network also to do so. On 29 September Watkin had commenced the process of mounting a legal challenge to the requirement for the Metropolitan Railway and the MDR to pay £50,000 of compensation monies to the ICC Company.263 He would therefore have to expect the ICC Company interests, including Whetham, to be there as well providing support to Rawson. In short, if it came to another battle for shareholders’ proxies, Watkin would have to expect to mount a campaign of at least the same scale and intensity as that of the preceding January. And if his opponents were able to lift the performance of their own campaign, as compared with the preceding year’s, a second Watkin victory might not be a certainty.

Does that mean we should expect Byng to have been at ease with leaving Watkin to stew over the threat of a re-run in January 1880 of the battle for SER shareholders’ proxies of January 1879? Two considerations need to be taken into account in addressing that. On this occasion,

261 TNA RAIL 635/47, pp. 173-4, minute 345. 262 Herapath’s, 8 February 1879, p. 141 reports Watkin saying: “it is not my intention any longer to fulfil those duties of management which I ventured to take upon myself at the decease of Mr Eborall”. 263 The Metropolitan/MDR Act of August 1879 set a cap on the compensation to the ICC company at £50,000, and provided for an Arbitration process to determine the precise figure if it could not be agreed by the parties. The Arbitrator awarded the maximum amount and Watkin immediately commissioned Perks to look into options for challenging the legality of that award. (See LMA Acc 1297/MET1/9, p. 545.) Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 115

Byng’s own board seat was one of the four that would be the subject of the contest (together with those held by Watkin and Surtees, and the ex-Fielden seat). That would mean two things in the event of a contest for the board elections: firstly Byng might lose his own seat; secondly Byng’s own track-record at the SER and on the board of the CX Hotel Company could be expected to receive a lot of attention in the campaigning material of the Watkin team. If Rawson were to focus his own campaigning on issues of conflicts of interest associated with Watkin and Knatchbull-Hugessen being on the boards of the ELR and the Metropolitan Railway, it would have to be expected that Byng’s position regarding the CX Hotel Company would be subject to greater public scrutiny than Byng might feel comfortable about. And if Rawson campaigned with emphasis on the importance of boards operating in conformity with accepted principles of company governance more generally, Byng might expect to see questions raised about his own signing off of the document sent to SER shareholders as the SER board’s half-yearly report in January 1879, on the strength of a “board resolution” which was not a resolution of a validly-convened board meeting.

Samuel Fielden, it seems clear, would not have been happy with any “final” resolution of the SER board situation that did not involve Watkin ceasing to be the company’s chairman. All Fielden’s public statements from the time of the MS&LR’s general meeting of January 1876 onwards point to that being so. Byng, it also seems clear, was keen to see Rawson back on the SER board, but did not see that as being necessarily incompatible with Watkin remaining in the chair. What was Rawson’s position? It would be fascinating to know. His death on 26 November 1879 fundamentally altered the entire picture. Interestingly, the SER board which usually met fortnightly, and often more frequently still, did not meet between 13 November and 11 December. On that latter date, a final resolution to the SER board struggle was signed-off on by all eleven of the company’s directors. It looks to have been on a basis of total victory for Watkin – but probably with a commitment from him to “no further recriminations” towards the vanquished. A resolution was moved by Byng, seconded by Mewburn and passed unanimously that Alfred Watkin be elected to the board seat vacant since Joshua Fielden’s resignation in February.264 The elections for the four board seats at the SER’s half-yearly general meeting held on 22 January 1880 were uncontested. At that meeting it was Beattie who seconded Byng’s nomination for Alfred Watkin’s confirmation as a director. Watkin senior plus Byng and Surtees were duly re-elected.265 The meeting passed

264 TNA RAIL 635/47, p. 225, minute 463. 265 TNA RAIL 1110/425, p. 1070. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 116

off smoothly and without controversy. Samuel Fielden did not attend. This marked the end of Watkin’s struggle at the SER board. Whereas on other occasions over the preceding three years when peace had been declared, it did not last, this time it proved durable.

VI Concluding comments It is not unusual for a business strategy that received broad-based peer support ex ante, to become a subject of derision ex post. This was the fate of Watkin’s strategy of a link providing through-running of trains between the SER and the Metropolitan Railway, via the ELR, in order to attract a significant volume of traffic to bypass the centre of London by this route rather than using the West London route crossing the Thames just north of Clapham Junction. The sober and well respected Samuel Laing, chairman of the LBSCR, in his evidence before the House of Commons committee on the joint Metropolitan Railway/MDR Bill in March 1879, said he expected a major hub to develop where the ELR met the south-of- Thames railway systems – making this the “Willesden Junction of the south”.266 Construction work on the completion of the Inner Circle commenced in September 1881. Through-running of trains from the SER via the ELR onto the Inner Circle began in October 1884. The volume of traffic on this route did not live up to the projectors’ expectations. This disappointment of expectations has been the subject of much discussion over the years, albeit usually with a focus on the consequences for shareholders in the Metropolitan Railway and the MDR, the companies which bore the lion’s share of the capital costs of the project.267 For those two companies it was a story of all pain and not much gain. For the SER it was more a case of not much pain (mainly capital costs of improving the junctions and station facilities at its interface with the ELR), with probably some modest net gains over time.

This type of modest net gains outcome for the SER appears to be in keeping with Rawson’s assessment of the project as outlined by him to the SER’s half-yearly general meeting of July 1879. What of Rawson’s fears that the SER’s share of the aggregate gains from the project would be below what they ought to be if the same person who was chairman of the ELR and responsible for its best interests continued to be chairman of the SER? When through-running across the ELR between the south-of-Thames systems and the Inner Circle commenced in 1884 it was under arrangements authorised by Parliament in an Act passed in 1882. In

266 Quoted in Barker and Robbins op. cit., p. 230. 267 See Barker and Robbins op. cit., pp. 237-240; Alan A. Jackson, London’s Metropolitan Railway, David and Charles, 1986, pp. 114-116. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 117

essence this provided for five companies to run services across the ELR’s lines on a basis of equivalence of treatment of the five. The five were the SER, the Metropolitan Railway, the MDR, the LCDR and the LBSCR. The 1882 Act provided for a sixth company, the GER, to join up to this arrangement if it so wished, and it exercised that option in 1885.268 This suggests that unless Forbes of the MDR and LCDR, Laing of the LBSCR and Parkes of the GER had all been successfully outwitted by Watkin in the negotiation processes surrounding the terms of that Act, it did not provide for an unwarranted transfer of wealth from SER shareholders to the ELR’s debenture holders. If Rawson had not died prematurely269 in November 1879, and the alternative scenario of a power-sharing agreement on the SER board (and/or a Watkin exit from the chair) had unfolded, it is hard to see how SER shareholders would have got a significantly different outcome from the ELR saga than that which eventuated.

Nevertheless it seems perfectly reasonable, from a 21st-century perspective at least, for Rawson to have wanted the SER’s board to address the risks posed for SER shareholders’ interests of allowing a potentially important negotiation to take place between the SER and the ELR in circumstances in which both companies’ negotiating teams were led by the same person wearing two hats, with one of those hats requiring its wearer to give primacy to the interests of the ELR’s debenture holders. (On 14 November 1878, Watkin had been appointed by the High Court to be receiver of the ELR, without salary, he to continue to be paid as the ELR’s chairman.270) Continuing to look at the situation through 21st-century spectacles, one would probably expect there to be broad unanimity in agreeing that such a situation was not “good practice”, and that if Watkin was insistent that he did not wish to give up the ELR hat at the negotiating table, the SER board should look at how to structure its negotiating team on a basis providing appropriate checks and balances against conflicts of interest. The fact that no such thing occurred seems to suggest that by the time this ELR situation surfaced there had already been a breakdown of trust on the SER board. If the SER board had been functioning as a “normal” public company board might reasonably be

268 See Charles E. Lee op. cit., pp. 18-19. 269 Rawson was 60 at the time of his death. Of the twelve who were directors of the SER in December 1878 (see Table 1), only Joshua Fielden died at such a relatively early age. The median age at death of the entire twelve was 72. 270 TNA J15/1380. Chancery Order 3364; The ELR’s Directors’ report for the company’s February 1879 half-yearly general meeting stated: “Upon the application of several of the principal Debenture Stockholders of the company, the Court of Chancery in November last appointed Sir Edward Watkin Receiver of the Company without salary. This step was rendered necessary in order to protect the interests of the Board and Stockholders in view of hostile action on the part of several of the largest creditors of the company”. (RAIL 178/1, p. 167.) Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 118

expected to, it ought to have been able to take a governance challenge of this nature in its stride. The various events discussed in this paper make it clear that there was major disharmony on the SER board before Watkin displayed any particular interest in the ELR. One might want to argue that it was “the last straw”, but the overall facts suggest that if this particular straw had not emerged, it would have been something else. The dysfunctionality on the SER board that was manifest in the latter months of 1877 was not resolved. Rawson’s efforts at mediation led to a fragile veil being discreetly drawn across the proceedings. If this interpretation is accepted, the next question must be: what was it that brought about that breakdown in trust at the SER board, which during 1878 was merely awaiting some “last straw” to serve as the trigger for full-on hostilities between the two camps?

The hypothesis proposed by the present writer is two-tiered. Firstly, the SER board members who lined-up against Watkin during 1878–79 were a loose coalition, each with his own set of reasons for believing Watkin’s behaviour as chairman of their company had become unacceptable. Secondly the two camps had divergent views on what should happen next, in terms of the governance of the company once the “default option” in board decision-making had become for Watkin to be outvoted. This second tier of the hypothesis is itself linked to the circumstances in which Watkin had become chairman of the company. The finances of the company had been in crisis and Watkin had been called in as the expert “company doctor”, to turn the situation around. The SER’s large shareholders had united to over-ride the views of those board members who sought to resist that.271 Under such circumstances it might have seemed perfectly reasonable for the SER board to have ceded something akin to dictatorial powers to the incoming “company doctor”, but probably expecting this to be for the duration of the crisis rather than sine die.

Under this interpretation, the roots of the struggle on the SER board over the period 1876–79 are to be found, strange though it may seem, in the degree of success with which Watkin had revived the company by the early-to-mid 1870s from its crisis of the mid 1860s. During the battle for shareholder proxies in January 1879, Watkin repeatedly asserted that the key issue was the company’s policy. Watkin’s opponents repeatedly denied this and asserted that the key issue was Watkin’s autocratic behaviour. If Watkin firmly believed that his board opponents had no shared alternative policy package to his own for the SER, but were opposing his own proposals out of varying mixes of personal animosity towards him and

271 See Hodgkins op. cit., pp. 273-276. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 119

ignorance of running a railway successfully, that would explain why he viewed the contest as one focussed on policy. But if Watkin had progressively abandoned any pretence of tact and diplomacy when hearing his board opponents voice their variety of reservations about his own proposals, one can imagine how this would over time stoke-up feelings of personal animosity towards him and accusations of autocratic behaviour. Hence the process would become self- reinforcing: the opponents becoming more unified and mutually supportive, but otherwise perhaps sharing little in common except the view that Watkin’s behaviour as chairman/CEO of the company was intolerable, and on a number of counts an affront to generally accepted principles of company governance.

The unfolding of the type of process hypothesized here could be expected to be gradual in getting under way, then picking up momentum as one side or the other did something tangible that tended to reinforce the counterparty’s fears/concerns. Withers, speaking at the SER’s 1 February 1879 half-yearly general meeting, argued that when he had first joined the company’s board in January 1875 the tensions were already apparent. The Manchester Guardian’s report of that meeting has him saying:

When he came upon the Board, some four years ago, he found a state of almost chronic dissent. It was so painful to his feelings that if he could have vacated his seat with honour by paying £500 he would have done so.272

The SER board minutes of that period provide no evidence of things being so tense, and Withers may have been mistaken as to the timing of his recollections. But the purpose of board minutes is principally to record decisions. If “dissent” prevents a decision being arrived at, that would be unlikely to be visible in the minutes. And even when a dissenter insists that their dissent from a decision be recorded, it is unusual for this to be accompanied by much guidance as to their reasons. But an interesting counter-example to this does exist in the minutes of the board meeting of 18 April 1878. The company’s train drivers had sought a reduction in their working hours and in January a board committee comprising Mellor, Buckley and Fielden had been given the job of resolving the matter. Signing off on this was the principal item on the agenda for the 18 April meeting, which Watkin chose to absent himself from, sending a letter to be read instead:

272 Manchester Guardian, 3 February 1879, p. 6. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 120

My dear Sirs, I think I cannot usefully interfere further in the matter of the Drivers, and therefore I propose to attend to other business while the Board decides the question today. I offered to take charge of the matter, if armed with full power, last January … the Board thought otherwise and desired me to take the advice of Messrs Mellor, Buckley and Fielden. I therefore laid my views fully and in writing before those gentlemen, but I regretted to find that no single one of my recommendations met their acceptance. At the last Board meeting it was desired to concede the 10 hours, in principle – against my opinion in favour of making a struggle to retain the 12 hours. [Watkin then invites the Board to reconsider this.]273

Withers and Whatman were also absent from this meeting which (chaired by Byng) reaffirmed the decision Watkin had objected to. Watkin’s opponents did not attempt to estimate the costs to the company of this decision.274 The fact that the Watkin camp does not appear to have attempted to use this incident in the battle for shareholders’ proxies nine months later suggests that: (a) Watkin probably did not see it as a “big” issue, and (b) this sort of thing may have become a routine occurrence on “small” matters well before this date, without that being visible in the SER board minutes.

Turning to the role played by R.W. Perks in the events discussed in this paper, we have seen that Watkin invited Perks to become a member of the committee co-ordinating his campaign for shareholder proxies for the SER’s board elections of early February 1879. Perks then 29, was the youngest member of that committee. The next youngest members were John Bell, the secretary of the Metropolitan Railway and Samuel Simon, Secretary of the ELR, both born in 1841. It seems clear that this role provided Perks with a wonderful opportunity to demonstrate his talents and his capacity for getting a job done effectively, to a person of substantial power and influence in the railway world of this period – i.e., Watkin. Watkin must have been impressed with what he saw, for with the successful conclusion to the board election campaign, he arranged for Perks to be appointed secretary to the SER shareholders’ committee on the company’s policy, established to fulfil a campaign promise. If Watkin’s opponents had not chosen to boycott the proceedings of that committee, this job would no doubt have been more strenuous and taxing than it turned out to be. Nevertheless Watkin was

273 TNA RAIL 635/46, pp. 84-85, minute 173. 274 Knatchbull-Hugessen Papers, U591, F25/30, entry for 18 April 1878 (“They conceded 10 hours and had made no calculation of the expense involved”.) Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 121

apparently well satisfied with Perks’s performance. He commissioned Perks to provide legal advice on the complexities of the appointment processes required for board members of the Charing Cross Hotel Company. And at some point Perks was appointed solicitor to that company, meaning that from then he was solicitor to two of the SER’s satellite companies: this and the Cranbrook & Paddock Wood Railway. His name begins to crop up increasingly frequently in the SER’s board minutes during the second half of 1879 in the context of matters relating to these two companies. In the latter months of 1879, Watkin commissioned Perks to commence doing work for the directors of the Metropolitan Railway – a subject that will be discussed in a separate paper.

In summary, Perks’s role in the events discussed in this paper became a key building-block in his own business career. It paved the way to his becoming solicitor to the Metropolitan Railway and that role in turn led on to his broader operations as a combination of legal adviser cum financial entrepreneur across a range of transport infrastructure projects (and taking in some non-transport projects also). (See Owen Covick, “R.W. Perks and the Barry Railway Company” and references cited therein,275 for more on these later activities.) Perks submitted his bill regarding his work as secretary of the SER’s Committee on Policy in late July 1879 and the board approved payment on 21 August. The bill was for “printing and other expenses” only, duly itemised and documented, with Perks writing: “I have no charge to make for the work I personally did for the committee and am pleased to have been able to render any service to the company”. Watkin’s views on “Railway Lawyers” have been noted earlier (see footnote 181). This gesture on Perks’ part no doubt helped Watkin reach the view that he was not from the same mould as Vampire the lawyer. In the meantime Perks appears to have developed an amicable relationship with Knatchbull-Hugessen. The two, together with Eykyn, went walking together along the coast from Folkestone on Easter Monday 1879.276 Knatchbull-Hugessen’s diary records the two lunching together and dining together on a number of occasions. During August/September 1879, Perks helped Knatchbull- Hugessen obtain a loan of £7,000 (at 4½ per cent p.a.) from the Star Life Assurance Society to buy a house in Queen Anne’s Gate, Westminster.277

275 Owen Covick, “R.W. Perks and the Barry Railway Company”, published in four parts in Journal of the Railway and Canal Historical Society: Volume 36, issue 2, pp. 71-83; Volume 36, issue 3, pp. 141-152; Volume 36, issue 4, pp. 22-37; Volume 36, issue 5, pp. 75-77. 276 Knatchbull-Hugessen Papers, U591, F25/31, entry for 14 April 1879. 277 ibid, entries for 29 September, 7 October, 3 December and 16 December 1879; and LMA, CLC/B/005/ST01/5/1/11 (Board Minutes of Star Life Assurance Society), p. 11 and p. 27. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 122

Charles E. Lee, in his entry on Perks for the 1985 Dictionary of Business Biography, pointed out the importance of his role in the SER board elections campaigning of December 1878/ January 1879 to the subsequent career of Sir Robert. But the sources Lee relied on meant that he did not really do justice to the role of Mewburn in the events in question. Lee’s sources for this episode were the 1909 biography of Perks written by Denis Crane, and Perks’s own posthumously published Notes for an Autobiography.278 As the former was written with Perks’s collaboration, and sourced principally from information supplied to its writer by Perks, these two sources are in effect just one source, but tapped at two different dates and with the later one “printed for private circulation among a few relatives and friends” by Perks’s widow, Lady Edith.279

The 1909 biography of Perks written by Denis Crane is very coy about how it was that Perks came to earn the esteem of Watkin. Crane’s story begins:

In the summer [of 1878] it fell to Sir Robert’s lot to introduce to the South Eastern Railway Board a deputation of the Cranbrook Railway to protest against the action of Sir Edward Watkin’s company. His language … made a favourable impression upon the famous railway magnate.

Crane then jumps forward six months to Christmas Day which Perks and his wife are spending at the house of Perks’s father-in-law, Mewburn, in Banbury. Christmas dinner is in progress:

… when a telegram was put into his hand. ‘Sir Edward Watkin arrives in London tonight from Manchester and wishes to see Mr Perks … on important business’. Sir Robert handed the message to his wife … she suggested postponement. Her father supported her. ‘Wire saying you will be there tomorrow’, said he.

But Perks decides to go and meets Watkin at 6.00 p.m. that evening.

‘I wondered if you would come’, was the latter’s only comment, as he pulled off his heavy fur coat. From that day forward for fourteen years Sir Robert was by

278 Charles E. Lee, “Perks, Sir Robert William”, in David J. Jeremy (ed.), Dictionary of Business Biography, Butterworths, London, 1985, Volume 4, pp. 628-632. Denis Crane, The Life Story of Sir Robert Perks, Robert Culley, London, 1909. “Denis Crane” was the pen name of Walter Thomas Cranfield (1874-1946), a journalist who was working for the Methodist Recorder at this stage. R.W. Perks, Sir Robert William Perks, Baronet, Epworth Press, London, 1936. 279 Edith Perks, preface to R.W. Perks, op. cit., p. 5. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 123

Sir Edward Watkin’s side in all his battles. Business simply poured into his lap.280

At no stage does Crane reveal what it was that Watkin wanted Perks to do that required Perks to meet with him in London on that Christmas evening. A distinct impression is given that Perks himself did not know, at the time he read the telegram, and that both Perks’ wife and his father-in-law were similarly “in the dark”. The account in Perks’ Notes for an Autobiography lifts the veil on that first point, but continues to leave the reader with a misleading impression of how well acquainted with Watkin and his situation at this time, Mewburn was.

On Christmas Day we had got half-way through our meal, when the butler put a telegram into my hand. ‘If convenient meet me [in London] today at six o’clock. Watkin’. I gave it to my wife to read. ‘You certainly cannot go’, she said. ‘This is our first Christmas together since we were married’. I passed the wire to Mr Mewburn. He said, ‘Robert you must not go, you can easily put it off’.

Perks nevertheless goes and meets Watkin at 6.00 p.m.

‘Capital, Perks’, he said, ‘I wondered whether you would be here’. He then told me that he was in a very awkward position as Chairman of the [SER] …

After explaining this situation, Watkin moves on to the subject of the impending board elections.

He had decided to put up three new candidates against the three opponents. These men must be carefully chosen. The shareholders would have to be canvassed and suitable literature distributed. To my astonishment and delight he said he wished me to help him to organise this contest, and fight it out to the utmost of my ability regardless of the cost.

Two paragraphs later, Perks reports the results of the election and states that Mewburn was one of the new directors elected, and mentions only at this point that Mewburn “was then the largest shareholder in the Railway Company”. 281

280 Denis Crane op. cit., pp. 71-73. 281 R.W. Perks, op. cit., pp. 63-64. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 124

It seems highly implausible that it was only at this 6.00 p.m. meeting on Christmas Day 1878 that Perks learned of the “awkward position” Watkin was in on the board of the SER. Perks had married Mewburn’s daughter Edith in April 1878 after having been engaged to her since November 1875. Even if Mewburn had been reluctant to confide in his daughter’s fiancé on his efforts to provide support to Watkin at the SER since the onset of board tensions there, it is hard to believe he would have sought to totally suppress his views and position on those matters from Perks after April 1878. Perks’s kinsman and legal partner H.H. Fowler had spoken in support of Watkin at the July 1878 SER half-yearly general meeting. Is it plausible that Perks had remained ignorant about what Fowler had learned? And thirdly there is the matter of Perks’s position of solicitor to the Cranbrook & Paddock Wood Railway Company. This company was not “at arm’s length” from the SER. In early 1878 the SER had sealed an agreement with the C&PWR to provide £50,000, being one half of that company’s share capital, once the company’s promoters had successfully obtained subscribers for the other half. The SER had then nominated Watkin and Byng to sit on the board of the C&PWR. 282 The C&PWR deputation which Perks accompanied to meet with the SER board on 18 July 1878 sought to persuade the SER to go a step further and provide a guarantee of a minimum dividend (3 per cent p.a.) to help the promoters obtain subscribers for the non-SER half of the capital. Watkin was happy to agree to this and a board resolution was passed approving it on 8 August. 283 But Watkin’s opponents on the SER board then appear to have had second thoughts and raised difficulties and delays in giving legal effect to that resolution.284 Perks, as solicitor for the C&PWR had the task of trying to deal with the difficulties and delays being thus imposed on his company. It is hard to imagine that a man as acute and hard working as Perks would not have made it his job to find out what was going on to cause these problems – including if necessary asking his father-in-law whether he was aware of what might be going on.

One cannot of course, be sure. But on the strength of the various pieces of evidence discussed in this paper, it would seem likely that when he sat down for dinner on Christmas Day 1878: Perks already was fairly thoroughly informed as to the situation Watkin was in on the SER board; he knew it was almost certain there would be a major battle for shareholders’ proxies in the board elections due in late January/early February; and he knew Mewburn had already

282 TNA RAIL 635/46, p. 132, minute 261. 283 ibid, p. 210, minute 404 and p. 279, minute 467. 284 The Morning Post, Wednesday 22 January 1879, p. 2 column 4, article titled “A Consequence of Dissension” (reprinted from the Maidstone Journal). Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 125

signalled to the company his intention to stand as a candidate in those elections. If that was so, what are we to make of the story of the arrival of the telegram from Watkin, and of Mewburn’s response upon being shown it?

The biographical sketch of Perks published in The British Monthly in January 1903 (pp. 77– 85) did not include this story, simply saying:

Mr Perks’s staunchest and most accomplished business friend was the great railway magnate, Sir Edward Watkin, for which valuable connection he was indebted to his late father-in-law, Mr Mewburn.285

This British Monthly piece was, by the standards of the time, lavishly illustrated. There is a full-page photograph of “Mr R.W. Perks MP at his writing table”, a two-thirds page photograph of “Mrs Perks at her writing table” and various other photographs of Perks, his son and his daughters, and the interior of his London house, 11 Kensington Palace Gardens. The final paragraph of the piece reads:

Such is the career – rich in daring and successful enterprises, crowded with innumerable benevolences and disinterested advocacies, wholly inspired with an earnest and honourable Christian spirit – of one whom Methodism, and the entire Free Churches of England, delights to honour.286

With articles of this type, it would be highly unusual for the subject not to be given an opportunity to correct any serious inaccuracies. Thus Perks must have been comfortable in 1902–03 in seeing the genesis of his business relationship with Watkin described as having been something for which he was indebted to his father-in-law. But by the time of the Crane biography, Perks was willing to accept Mewburn’s role being “painted-out” of this picture. Indeed the Christmas dinner story as told by Crane, and by Perks himself in his Notes for an autobiography has Perks acting against the advice of his father-in-law in order to comply with Watkin’s desire to meet with him in London that evening. The fact that Perks’s widow was happy to allow this version to appear in the limited circulation volume for “a few relatives and friends” suggests that it was not mere fiction. Lady Edith had been present at the said

285 The British Monthly, January 1903, p. 82. This article was unsigned. It may have been written by Denis Crane. A number of passages in it are remarkably similar in their wording to sections of the 1909 Crane biography. And The British Monthly appears to have been a periodical catering to a Wesleyan Methodist readership. 286 ibid, p. 84. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 126

Christmas dinner. If the story was not compatible with her recollections, it would have been straightforward for her to edit it out, in whole or part.

One possible rationalisation runs as follows. Watkin had decided prior to Christmas Day that he would launch in earnest his campaign against the dissident SER directors on Boxing Day. He had told Mewburn and Perks about this and had invited Perks to meet him in London on Boxing Day. Christmas dinner at Wykham Park began with Mewburn, his daughter Edith, and Perks all aware that the afternoon and evening of this day were to be the lull before the storm, and all were keen to make the most of that lull. If this was so, the reaction of Mewburn to the Watkin telegram can be interpreted as his assessment that there was little to be lost from Perks sticking to Plan A and travelling to meet Watkin in London the following morning as already arranged. Perks, on the other hand, chose to assess Watkin’s telegram as a test, designed by Watkin to check on Perks’s willingness to put the demands of work and career in front of the temptation to rest back on the laurels of having succeeded in marrying the daughter of a very wealthy man. If the telegram was intended by Watkin to be a test of this type, it is possible that it was only upon Perks rising to it that Watkin decided to give the young man the status of a full member of his campaign committee team. The arrangements settled upon prior to Christmas Day may have been for Perks to be given a very substantial role in the campaign, and ample opportunity to demonstrate his capacities, so that Mewburn saw little further to be gained from his son-in-law travelling up to London for 6.00 p.m. that evening rather than commencement of business the following morning. And this would explain Perks’s emotions of “astonishment and delight” upon Watkin telling him he wanted him on the campaign committee, alongside the much more experienced Eykyn and Knatchbull-Hugessen. 287

As to the question of why Perks chose to alter his position between 1902/03 and later that same decade on what he wanted to see emphasised in accounts of the genesis of his business relationship with Watkin, it may be useful to reflect on the fact that the 1900s were the decade in which Perks himself had to come to terms with becoming a father-in-law. In January 1903, when the British Monthly piece was published, his four daughters were aged 22, 20, 18 and 17. The first to marry was the third oldest in December 1908, followed by the youngest in July 1911 and the second oldest in September 1913. The eldest daughter, Gertrude, died unmarried in February 1914. On the opening page of his Notes for an Autobiography Perks

287 For a second angle on Perks’s reaction to Watkin’s telegram, see Appendix B below. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 127

describes what follows as being the result of one of his daughters asking him in 1907 to “write down for us some of those stories you tell us about the interesting places you have seen … and the work you have done”.288 Perhaps some of these “stories” went through an evolution of emphasis as the daughters approached marriageable age. Perks himself had married the daughter of a very wealthy man. That had opened a number of doors for him, but he had worked very hard to make the most of the opportunities afforded to him. By 1907/08 Perks, himself now a very wealthy man, may have been keen that suitors for his daughters’ hands should not view marriage to a wealthy man’s daughter as a recipe for a life of low effort and high comfort.

288 R.W. Perks, op. cit., p. 7. Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 128

Appendix A Capital Structure of SER December 1878

Type Nominal Value Issued (£) Pricea

Ordinary Sharesb (a) “ordinary” 3,419,460 128 (b) “preferred” 2,289,030 135 (c) “deferred” 2,289,030 117 Total ordinary shares 7,997,520 - Preference sharesc 4½ per cent non-cumulative 2,091,500 108 5% non-cumulative 2,640,820 121 4½ per cent cumulative 984,300 110 Total preference shares 5,716,620 - Debentures 4 per cent 169,730 104 5 per cent 4,339,370 128 Notes: a Prices are “per £100 nominal value”, and taken from The Economist, 26 January 1878, p. 112. b During 1867 the SR began to allow holders of its ordinary shares to convert these into “preferred and deferred portions” (see TNA RAIL 635/39, 17 October 1867 meeting, minute 525). The mechanics amounted to taking a pair of ordinaries and converting these into one “preferred ordinary” and one “deferred ordinary”. The dividends declared on the two underlying ordinaries were pooled and used to pay 6 per cent (if possible) on the “preferred ordinary”, with whatever was left over (if anything) going to the “deferred ordinary”. For calendar year 1877, 5½ per cent was paid on the SER’s “undivided” ordinaries, meaning the deferreds received 5 per cent. For calendar year 1878 all three categories received 6 per cent. c The voting power (per £ of nominal value) of the SER’s preference shares was half that of its ordinaries (see text).

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APPENDIX B (drafted by Owen Covick, 19 March 2021) An unscheduled stop at Chislehurst On the morning of Tuesday 17 December1878, the South Eastern Railway’s train running the Company’s fast service from London to Paris made an unscheduled stop at Chislehurst. Four passengers boarded: John Hartley Perks (1841–1912), his wife Mary, their five-months old baby daughter and the baby’s nurse. The four had been staying with R W Perks and his wife at their home in Chislehurst since Wednesday 11 December, J H Perks having met Mary, the baby and nurse at Euston off the train from Glasgow the day before. John Hartley Perks, whose home was in Wolverhampton, was a wealthy cousin of R W Perks. His father John Perks (1797–1875) was a first-cousin of R W Perks’s grandfather William Perks (1781– 1831). And William’s only sibling, Marianne, had married John Perks’s eldest brother Robert (1780–1834). The diaries of John Hartley Perks have been preserved at Wolverhampton Archives. The entry for 17 December 1878 reads: Robert, who has some influence with the railway authorities through Mr. Mewburn, had the tidal train stopped for us at Chislehurst, and got us a through compartment to ourselves both sides of the channel. We left a little after 11 a.m., had a very good passage and thus made a luxurious journey to Paris where we arrived about 8.30. (Wolverhampton Archives, DX 327/2/10).

As will be apparent from the body of the paper above, William Mewburn was not a director of the SER at the time the company’s express service made its unscheduled stop to pick up J H Perks and his family. As the company’s largest shareholder, and one of its (unpaid) auditors, it is perhaps not surprising that Mewburn should be accorded favourable treatment by the railway’s paid staff. But for the favourable treatment to be extended to a third (or fourth) cousin of Mewburn’s only recently acquired son-in-law may have been less in line with the accepted business practices of the period. And that is before one looks into why it was that J H Perks and his family were keen to get onto that SER train and cross to France on that day. The trip was not simply for a family holiday in warmer climes. Rather, it was the result of professional advice which J H Perks had received confirmation of on Thursday 5 December 1878: legal and financial advice that it would be in his interests if both he and his wife were outside the UK by Wednesday 18 December.

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The woes of John Hartley Perks and his wife had been triggered by the spectacular collapse of the City of Glasgow Bank, which closed its doors on 2 October 1878. The City of Glasgow Bank was a large bank, with 133 branches, and it was an unlimited liability company. That meant its shareholders had to expect to be called upon to stump up additional calls on their shares to whatever extent was required to discharge the Bank’s liabilities to its depositors and other creditors. And if the calls drove some shareholders into bankruptcy, that would simply mean further additional calls on those shareholders still standing. Immediately prior to the collapse, the Bank’s shares had been trading at £236 each. J H Perks’s diary entry for 19 October 1878 included the words: ‘calls on those who can pay may be as much as £2000 [per share]’.

The problem facing J H Perks was complex. His wife’s inheritance from her father Andrew Watters (a part-owner of the Glasgow Herald, who had died 23 May 1875) was held in a trust, established through the will of her father for the benefit of herself and her brothers, their offspring, and their widowed mother. The trust held a significant number of shares in the City of Glasgow Bank, plus Andrew’s partnership interest in the Herald plus some other smaller investments. Particularly if the Herald interest (a highly illiquid asset) had to be sold in haste at a ‘firesale’ price, the trust held nowhere near enough money to be able to stump-up £2,000 per share to the Bank’s liquidators. What would happen next? Would Mary and her brothers be pursued to make up the shortfall from any other assets they held? And once that had proved insufficient, would the liquidators be legally entitled to pursue Mary’s husband, in order to try to recover what she and her brothers were unable to pay?

J H Perks and his brothers-in-law were given contradictory advice on these questions by the Watters family’s Scottish legal advisers. To cut a long story short, after spending several weeks in Scotland, J H Perks decided it would be a good idea to seek further advice from his cousin R W Perks in London. Robert had advised John during 1876 over arrangements for a proposed conversion into a public company of the Wolverhampton ironworks in which John was a partner (‘The Shrubbery’). And in mid-1878 John had joined forces with Robert in a property-development project in London. Robert’s view was that the test cases the Bank’s liquidators had commenced would lead to a confirmation of their legal powers (and in fact their legal duty) to enforce payment of calls-monies by persons in John’s position. Robert advised John to obtain a legal opinion on the matter from a senior London QC, and on Thursday 5 December 1878 Robert accompanied John to that QC’s offices to receive the Watkin’s Struggle at the S.E.R. Board 1876-79, and R.W. Perks Page 131

opinion and pursue any follow-up questions. J H Perks’s diary entry for that day includes the words: ‘Counsel … advises me to realize [assets] and live on the continent’ – followed by two exclamation marks.

Robert invited John to come and stay with him in his Chislehurst house while steps were taken to put that advice into effect. The no doubt somewhat ‘shell-shocked’ John needed to act rapidly. The hearing of the first important test case regarding City of Glasgow Bank shares held by a trust was scheduled to be commenced in the Court of Sessions in Edinburgh on Wednesday 18 December 1878. The Bank’s liquidators could be expected to commence delivering demands in respect of other trust holdings as soon as the decision on that case gave them the green light. And so it was that the SER’s express service to Paris made its unscheduled stop at Chislehurst on the morning of Tuesday 17 December.

During January 1879 word reached John Hartley Perks in Paris that Robert’s legal partner, Henry Hartley Fowler, had been expressing disapproval in Wolverhampton circles of John’s behaviour in putting himself outside the reach of the City of Glasgow Bank’s liquidators. H H Fowler was a close relation of John’s mother. If he took the view that that behaviour was dishonourable, it seems likely that many other outside observers would have felt similarly and that their disapproval would have extended to persons who ‘aided and abetted’ fugitives from the Bank’s liquidators – whose actions rendered the financial burden facing those who did not flee, that much greater. It seems reasonable to suspect, therefore, that if Watkin’s opponents on the SER Board had become aware of the circumstances of their Company’s express service to Paris making its unscheduled stop at Chislehurst on 17 December 1878, this would have been used in their propaganda battle against Watkin (and Mewburn) during the six weeks following. Assuming Watkin was fully informed by Mewburn when the latter sought the favour, it was clearly a brave step for him to take in saying ‘yes’. The fact that he did say ‘yes’ may well have been an additional factor in the thinking of R W Perks when he was handed the telegram asking him to cut short his Christmas Day celebrations in Banbury and travel to meet Watkin in London at 6 pm that day. At the same time, it might also help explain why Watkin sent the telegram. It is not difficult to imagine Watkin reflecting on the efforts R W Perks had put into supporting his cousin J H Perks in the latter’s hour of need, and saying to himself: ‘This looks like a good man to have in your team when you’re in a tight corner’.

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J H Perks remained in France until 27 June 1879, when he took the Dieppe to Newhaven ferry and travelled by the LB&SCR to Victoria. His brothers-in-law had bought some time by mounting an appeal to the House of Lords against the December 1878 decision by the Court of Sessions in Edinburgh. This appeal, together with a series of parallel ones concerning other trusts with shareholdings in the City of Glasgow Bank was dismissed with costs in May 1879. Presumably the costs to the Watters family of this exercise represented money that would otherwise have gone to the liquidators to distribute among the Bank’s depositors (and other creditors). R W Perks had been keeping his cousin John informed of these developments, and from the beginning of May 1879 he started travelling to Scotland on a fairly frequent basis attempting to negotiate a court-sanctioned settlement between the liquidators of the Bank and his cousin. This dragged on for months, but eventually succeeded, allowing John Hartley Perks to relax from keeping a low profile and having to be guarded about the disclosure of his address. As late as 22 October 1879 there is an entry in John’s diary about Robert attending the Court of Sessions in Edinburgh on his behalf, working on securing the Court’s approval of the draft settlement. It includes the words: ‘Robert has not wired me, fearing to leave in Edinburgh a clue to my address’.

J H Perks’s October 1878 guess as to the size of the liquidators’ calls on the Bank’s shares turned out to be an underestimate. Their first call of £500 per share served to wipe out a great many of the widows, spinsters and elderly on the Bank’s share register. This gave the liquidators a clearer picture of what they needed to demand from those still standing. They proceeded in early April 1879 to call up a further £2,250 per share, with due date set at 22 April, and interest to be charged on amounts not received by that date. The settlement that was eventually agreed and ratified by the court put a dent in J H Perks’s net wealth, but he remained a comfortably wealthy man, able to continue to live out the rest of his life as a gentleman of leisure. He continued to be a friend and financial advisee of his cousin, R W Perks, but steered clear of the types of financial ‘excitement’ he had gone through in the period described above. John’s older half-brother Samuel Hollis Perks (1830–1910) was more adventurous and became one of the anchor-investors in the syndicate R W Perks assembled in 1887 to rescue the Barry Railway (see Journal of the R&CHS, November 2008, page 143). Neither J H Perks nor S H Perks are mentioned in the Denis Crane biography of R W Perks published in 1909. Nor are they mentioned in Perks’s posthumously published ‘Notes for an Autobiography’.