PART VI. PRUSSIAN RAILWAYS.1

Early development.-More attention is given to Prussia than to any other foreign state because of the significance which the system of state railways in Prussia has attained in the railway history of the world. Prussia has developed a system which is peculiarly her own, and which, in many respects, is the most perfect of its kind. In the earlier history of Prussian railways one can find tendencies similar to those which are discernible in the historical development of railways in every other country; but the manner in which Prussian legislation met various contingencies affords instructive lessons to those countries in which legislative bodies pursued a different course. Prussia was not the first German country to begin the construction of railways. One very important road was built in Šaxony before the first great Prussian railway was built; and a short road from Nuremberg to Fürth was the first modern railway in the present German Empire. The latter will be briefly considered, because in its projection things were done which are quite typical of procedure in connection with early German railway projects. For purposes of comparative study a presentation of the present legal and administrative organization of Prussian railways would perhaps be sufficient; but in its local history there are so many instructive lessons that one can not afford to pass over Prussian railway development from its beginning to the period of radical reorganization in 1894, upon the basis of which the present system rests.

The Nuremberg-Fürth Railway. The history of the Nuremberg-Fürth Railway dates back to 1814, when a prominent Bavarian engineer began to interest himself actively in railway projects. Not until 1832, however, when John Scharrer, a wealthy citizen of Nuremberg, revived the project, was work begun in earnest which led to the completion of the road in the immediate future. The men who were associated with Scharrer were practical business men, and the manner in which they entered upon the novel undertaking of a railway shows that their enterprise rested upon business principles. By actual count they determined the number of people that traveled between the two cities. The result showed a daily average of 1,184 persons on foot, 494 in carriages, and 108 vehicles of various kinds. From this daily average they estimated the annual movement of persons between Nuremberg and its suburb, Fürth, at 612,470 persons, and 39,420 pleasure trips. On the basis of this count a detailed plan and estimate were elaborated, fixing the capital stock of the proposed company at 132,000 gulden, on which an annual return of at least 12 per cent was estimated. The stock was sold on May 14, 1833. The largest part of it remained in the two cities between which the railway was to be built, and the Government became a shareholder to the extent of 200 gulden. Following this the shareholders secured a royal charter and a confirmation of their statutes, by which the company secured the exclusive privilege of building and operating a railway between the two cities for a period of 30 years. The organization of the company has remained intact up to the present time, and the financial history of the road has been one of the most prosperous in, Germany. This is one of the few early roads which was built with especial reference to passenger traffic. Not until 1836 was freight carried in any quantity. On the 11th of July of that year the first cargo of freight was shipped from Nuremberg to the "Wirth zur Eisenbachen" at Fürth; and, quite in keeping with Bavarian custom, the cargo consisted of "2 Fässchen Bier von Lederer."

1In addition to official documents, the writer wishes to acknowledge his indebtedness to the legal works of Gleim, Eger, and Schroetter; to the historical essays of List, von Mayer, and von Fleck; to the financial compilations of Hoeper; to the economic publications of von der Leyen; and to various essays in the Archiv für Eisenbahnwesen.

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The Leipzig-Dresden Railway.-Although not located in Prussia, this railway is mentioned because it is the first great road that was ever built in Germany, and can, in a sense at least, be considered the technical foundation of great systems of railways in the German Empire. Roads projected before this time were more isolated and chiefly local. The Leipzig-Dresden road constitutes the corner stone of the industrial mechanism of modern Germany. All of the stock was sold in 1835, exactly 2 years after the stock of the Nuremberg-Fürth Railway had been sold. A great wave of enthusiasm followed this event which led to the projection of 9 different roads. An expropriation law for the benefit of this company was enacted in 1835, and construction was begun the following year, and a part of the line opened on April 24, 1837. The entire line was not opened for traffic until April 7, 1839.

A ministerial report. The attitude of the Prussian Government at the opening of the railway era is clearly indicated in the report of Herr Rother, the chief of the department of trade, manufacture, and building, on "the development of highways and the building of chaussees.' It is dated August 16, 1835, and addressed to King Frederick William III:

Railroads as avenues of trade, with steam propulsion, have to within very recent times, and with few exceptions, been found only in the few States of North America and in Great Britain. The reports received about dividends paid by these roads, in so far as they are undertakings of stock companies, appear to be unreliable and highly colored in the interests of stock speculation.

Herr Rother then refers to the difference in the conditions under which roads must be built in the several countries. He quotes the case of the first Austrian road from Linz to Budweiss and of the French road from Lyon to St. Etienne as having yielded but a small return. (The former 25 per cent and the latter even less.) And the railway built by the Government of Belgium from Brussels to Mecheln (24 German miles), he says, can not be taken as typical for other states, or even for Belgium. He says the Continent can not yet show a railway which has been successful and which has satisfied a real want. (Serving as an avenue of trade-"Handelsstrasse.") Another objection he raises is that there is no experience on the technical side to fall back upon. He even doubts whether he could answer in the affirmative the question whether or not the German means of communication, such as they were, needed any improvement. He points out that the tolls on macadams have been reduced so much that land transportation comes into active competition with that on water. He fears that many demands will be made on the state in consequence of industrial changes ("Verschiebungen ") resulting from the building of railways. Additional objections enumerated in the report are: that the small towns will gain but little, if at all, on being connected with a railway; that the expense of keeping the chaussees in repair will remain the same, while the receipts from tolls will decrease; that the use of the railway (i. e. the track) can not be extended to ordinary wagons; that the cars ("Eisenbahnwagon"-railway wagon) can not be used on chaussees and ordinary roads; that it appears difficult to make a railway pay, and that, finally, there is no occasion for the state to grant valuable charters or to give financial aid to such undertakings.

Rother's report may be taken as a true reflection of public opinion up to May 14, 1835. The report is dated August 16, 1835, and is thus a little behind time, on which day the stock of the Leipzig-Dresden road was sold, and a high wave of railway enthusiasm sent over the country.

The Magdeburg-Leipzig Railway. The importance of this railway lies in the fact that the charter, under which it was constructed, was made the foundation of the Prussian railway law of November 3, 1838, which has continued in force until to-day, and which in all its essentials constitutes the present railway law of Prussia. It may be said that the Magdeburg-Leipzig Railway accomplished in the province of railway legislation what the Leipzig-Dresden Railway effected toward systematization in railway construction. In the reply of the Government to the committee of Magdeburg merchants who sought a charter as early as May 22, 1835, there can be detected the central thought of all future Prussian railway legislation: that it is the duty of the state to take such a position in relation to railways that it may at any time in the future interfere in behalf of public interests. The royal order, confirming the statutes of the Magdeburg-Leipzig Company and granting the charter privileges, is_epoch-making. After extending to the corporation the privileges usually accorded to legal bodies of this kind, the order expressly limits the reserve fund provided for in the charter to 2 per cent of the total original cost. It further expressly states, and makes it a condition of the acceptance of the privileges granted to the company, that the same shall, at any time in the future, be bound by all laws, rescripts, and orders issued in relation to railways. The royal order discussed the relation of railways to the state

and to the public; and because of the quasi-public nature of the undertaking, which was thus early recognized by the German Government, all rights necessary for a proper ordering of the relations between the railways and the public were reserved to the state.

Periods of Prussian Railway development.-A general notion of the historical development of Prussian railways may be obtained from a presentation of the periods into which the same may be divided. At the outset, a word of comment may be inserted on the somewhat popular impression that in European countries the earliest railways were built largely, if not entirely, by public funds, and that in the United States they were built by private capital. The exact opposite is true. It is a well-known fact that nearly all our early railways received important aid from towns, counties, villages, and cities through which they passed. On the other hand, the earliest English and most continental roads were obliged to pay heavily for the right of way. The same was true in Prussia. Before the year 1843 only private railways existed in that state. From 1843 to 1847, inclusive, the state aided in the construction of railways by guaranteeing a minimum rate of interest on the capital stock or by investing in shares of the company. The period of the founding of state railways is marked off by the years 1848 and 1862; and is followed by an era of speculation from 1863 to 1877, during which numerous private roads were projected. From 1878 to the present time the state railway system has steadily grown in extent and importance, and, in general, it may be said that the dominating administrative influence from that day to the present time has resided in the head of the department of public works.

Constitutional basis of Prussian railway legislation.-The following are the provisions in the imperial constitution of April 16, 1871, upon which the railway legislation of Prussia rests:

ART. IV. 8. The Empire reserves the right of control and of legislation on the subject of railways, highways, etc.

ART. VIII. 5. The Bundesrath is constituted a permanent committee on railways, post, and telegraphs.

ART. XLI. Railways which may be deemed necessary for the defense of Germany or for the interests of the general traffic, may, by virtue of a legal enactment of the Union, even in opposition to members of the Union whose territory may be crossed by such roads, without impairing their right of sovereignty, be built by the Empire or by private undertakers to whom the Empire may have granted a concession and the right of expropriation.

Every existing railway is bound to permit a junction with the newly built roads at the expense of the latter.

Those legal provisions which grant to existing railways the right to control the building of parallel or competitive lines are, without impairing acquired rights, hereby repealed for the entire Empire. And such a right (Widerspruchsrecht) shall be incorporated in any concessions which may be granted in the future.

ART. XLII. The Federal Government binds itself to cause the German railways to be managed in the interests of the general traffic as a uniform network, and, for this purpose, to cause new roads to be built and equipped according to uniform norms.

ART. XLIII. In accordance with the above, uniform regulations for the operation of roads, especially uniform railway police regulations, shall be introduced with all practicable dispatch. The federal government shall take care that the railway management, at all times, preserves the roads in such a state of repair and provides them with such an amount of rolling stock as the interests of safety and the public traffic may demand.

ART. XLIV. În consideration of the customary compensation, the railway managements shall be bound to provide for the preparation of mutually supplementary time tables for passenger trains with the requisite speed; likewise to introduce freight trains sufficient for the requirements of the traffic, and to provide for the direct transfer of passengers and goods from one road to another.

ART. XLV. The Federal Government reserves the right to control the tariffs. The same shall strive to effect, (1) the introduction of a uniform system of reglements for the operation of all German railways; (2) the unification and reduction of rates, especially in the long-distance hauls of coal, coke, wood, ores, stone, salt, pig iron, fertilizers, and similar articles supplying the wants of agriculture and industry. (Note. The constitution further provides for the transportation of these articles, as soon as feasible, at a 1-penny rate, except in Wurttemberg, which, by a treaty of November 25, 1870 (Berlin), with the North German Union, Baden and Hessen is exempted from the 1-penny rate for all the enumerated articles (Art. III, sec. 2 of the treaty). This exception was necessary because of the different conditions under which transportation was carried on in Wurttemberg.)

ART. XLVI. In times of distress, especially with an exceptional rise in the price of the necessaries of life, the railways shall be bound to introduce, temporarily, for the transportation of (especially) grain, flour, leguminous products (Hülsenfrüchte), and potatoes, reduced rates, to be fixed by the Emperor on recommendation of the committee of the Bundesrath; provided that such tariff shall not be reduced below the lowest rate in force on the respective roads for the transportation of raw material.

The above, as well as the provisions contained in articles 42 to 45, shall not be binding on Bavaria. However, the Federal Government reserves the right to exact of Bavaria, by means of legislative enactment, uniform norms for the construction and equipment of such roads as are important in the defense of the Empire. (This provision practically repeats section 8 of Article IV.)

ART. XLVII. The several railway managements shall be obliged to meet unconditionally the demands of the Federal authorities for the use of the railways for the defense of Germany. Especially are troops and all accoutrements of war to be transported at uniformly reduced rates.

It is almost unnecessary to add that all these provisions have been supplemented by rescripts, orders, and statutes. All the rights of the Federal Government over railways may be enumerated under 5 heads:

1. The right to legislate.

2. The right to grant charters.

3. The right to control tariffs.

4. The right to supervise the building, operation, and administration of the roads.

5. The right to employ the roads for the national defense.

All these rights in turn may be looked upon as the logical sequence of what is technically termed the (a) culture and wellfare aim (Kultur-und Wohlfahrtszweck) and (b) right and might aim (Recht-und Machtzweck) of the State.

The legal basis of private railways.-A private railway is any railway not owned and operated by the Prussian State. Thus, railways built and operated in Prussia by a municipality, circuit, province, or another State are private railways in the eyes of the law as well as those owned and operated by a single individual or by a corporation. A railway may be in private possession but operated by the State. This was one of the stages in the transition from private to State railways. The law does not apply a technical term to these mixed roads. In addition to private, mixed, and State railways the law recognizes federal railways. Those in Alsace-Lorraine and a military road from Berlin to shooting grounds near by are the only railways of this kind.

The constitutional basis of charters.—By article 41 of the federal constitution the Federal Government concurrent with the several States has the right to build and operate railways. The Federal Government, within limitations already indicated, has left this right to the States. The right to build railways is an attribute of sovereignty. In case of State railways the question is not one of right but only of undertaking, while in case of private roads it is a question of right or legal privilege and of undertaking. This legal privilege is the charter. State railways require no charters, for the undertaker is the source of privileges granted in a charter to private persons. According to section 1 of the law of 1838 a charter is required for the building and operation of a railway by a physical or legal person (stock company, commune, province, circuit) or another State in the Prussian State. A charter is also required when the right to operate a road without acquiring the rights and privileges vested in the first and when a private road is to serve public interests exclusively. The aim of the law is to define a responsible person in all cases.

Economic and political premises.-The undertaking must serve public interests. It must be permissible from a military point of view. It must be useful and beneficial to the public at large, although it may stand in opposition to private and sectional interests. The law requires the undertaker to furnish objective proof of the usefulness of the proposed enterprise before an application can receive the attention of the authorities. Such proof consists of reliable statements of the present traffic and passenger frequence, an explanation-technical and economical-of the choice of this particular route, grades and curves, estimates of cost, etc.

The enterprise must not frustrate or make more difficult other and more useful projects. This principle would be violated, for instance, were a charter to be granted for a narrow-gauge or secondary road where the building of a primary road would be better.

The undertaker must offer objective proof of his ability to meet all the requirements of the charter which he seeks. This involves not only sufficient capital to build and equip the road, but also the ability to operate it successfully. Bonds are usually required as security.

The proposed railway must be technically practicable.—All these provisions are contained in a cabinet order of March 11, 1839, and, with the law which followed on November 3 of the same year, is still in force.

Preliminary considerations. By section 1 of the law of 1838; all applications for charters must be directed to the minister of public works. The application must state the direction of the route, with an enumeration of the towns to be touched by the road. A law of August 9, 1845, revised in October, 1871, prescribed the form of maps to be submitted, together with an estimate of costs, arranged under 17 heads.

A circular letter of July 20, 1874, of the minister of public works, requires the applicant to consult with the foresters whose territories will be crossed by the proposed route. A like decree of May 2, 1887, requires the cooperation of the head of the department of mines in determining the route through mining districts.

The charter. After all the preliminary work has been done, the detailed plan is subjected to an examination by the president of that circuit in which the management of the projected road has its seat. In this examination private and local claims are heard and recorded. This is known as the Landes und Ortspolizeiliche

Prüfung. All changes agreed upon among the interested parties in the examination, as well as those ordered in the subsequent examination by the minister of public works, are entered in their proper places in the plan in blue ink; and all changes not agreed upon, but recommended by the authorities, are entered, with the proceedings, in the journal, which is transmitted, together with the plan, to the minister of public works. The plan thus amended is next submitted to the war office for a special examination with reference to military interests, while mechanics and builders examine the technical details of the plan. The final examination is made by the minister of public works, who pays special attention to the project as a whole in its relation to the entire railway system. If the project is approved by him, it is recommended, together with the power of expropriation, to the king, through whose order the charter can finally be granted. The power of the minister of public works does not end with the granting of the charter, but continues during the period of construction, as well as during the entire life of the road. Changes and additions which he may recommend must be made at any time.

The legal basis of State railways. The building of a State road is a problem of administration, and could be undertaken by the administrative branch of the Government alone were it not for one thing-the money. The building of a State railway requires a State loan or the use of other funds, and for this the vote of the Landtag is necessary. The annual budget, called etat in Prussia, contains sums for the building and improvement of highways, railways, a definite sum to. meet the expenses of preliminary work, etc. All this is known collectively as the railway etat, just as there are marine, military, and educational etats.

A ministerial circular of June 14, 1887, requires the following points to be covered in the application for a new State railway:

1. A territorial map.

2. Contour and relief plans.

3. An explanatory statement. 4. An estimates of costs.

5. A memorial or petition.

6. An estimate of probable earnings.

The preliminary work requires estimate of the probable net profits to be made, as in the case of private roads. But the financial side, although of secondary importance with State roads, must still be an important one. Hence, it is required that the memorial shall contain an elaborate account of the probable effect of the proposed railway on other roads owned and operated by the State, its probable effect on other State property, etc. All the preliminary work is done by order of the minister of public works. The approval of the entire project depends upon the Landtag, or rather the budget (Etatgesetz). However, a special royal order is required to exercise the right of eminent domain, and to name the particular authority which is to execute the plan. When the law does not specify whether a primary or secondary railway is to be constructed, either may be decided upon, depending upon the motives which led to the adoption of the plan, while in case of charters granted to private companies, primary railways are understood unless otherwise specified.

When the law of 1838 was passed, it was thought probable that several undertakers might desire to use the same track. Paragraph 27 gives the minister of public works the right, after careful examination of all the facts, to grant to second parties the privilege of transportation on the same track with the original incorporators, provided that no such privilege shall be granted within 3 years after the charter shall have been granted. Several other paragraphs of the same law are related to this one.

Influence of public interests in railway construction.-Both the economical and technical interests are drawn into consideration when the State fixes the plan. The technical unity of all railways is an absolute necessity, and follows the requirements of the federal constitution, that railways shall be operated as a uniform system. All roads are now built according to the norms prescribed in the law of July 5, 1892, which are necessarily general in character. In so far as any part of the construction of a railway, with all its adjuncts, falls outside these norms, it must be determined by the minister of public works according to paragraph 4 of the law of 1838. The location and construction of station houses, storehouses, switches, roundhouses, walls and barriers of any kind, bridges, canals, dikes, etc., require not only ministerial sanction, but also the approval of other authorities within whose jurisdiction the control of such things lies, such as the police and military authorities and building commissioners. But it must be remembered that the power of the authorities is only cooperative. Their decisions are not final, nor are they binding on the minister of public works, in whom final authority is vested.