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The charter which was submitted as typical of Norwegian charters was granted in 1899, and in many respects it is quite similar to charters granted in other countries. A number of commissioners are named and a certain amount of government subsidy is specified, together with the contributions to be made by the districts through which the proposed road is to run. The charter is granted under the same general conditions under which previous charters have been granted, in accordance with the terms of the general laws just considered. The minister of public works must approve the construction of the road from time to time as progress is made. A map and profile must be submitted, not only to the department of public works but also to military authorities before the full franchise can be granted. The charter regulates the relation between this and other railways in regard to the common use of tracks, stations, crossings, etc. Minimum curves are fixed, the width of track, weight of rail, and other matters relating to the physical requirements of construction, with the final power of decision in the department of public works. A careful estimate of costs must accompany the map and profiles, and the laws of 1848 and 1898 are expressly made a part of the charter. The incorporators are empowered to exercise the right of eminent domain, a detailed plan of all lands necessary having been previously approved by the King. Rails, locomotives, cars, coal, and other materials necessary for construction may be imported free of duty. Railway property is exempt from taxation under the law of 1848 for a period of 30 years from the date of opening. The limits for beginning and completing construction are stated, and it is further specified that Norwegians shall do the work. The incorporators and their franchises are subject to the control of the State, acting through the proper railway officials, who may order minor changes. The department of public works may also approve safety appliances, the rules regulating speed of trains, and similar matters. The capital stock of the company can not be increased without the consent of the Government. A reserve fund is provided for and pensions for employees, and these, together with the working capital of the road, are governed by regulations issued by the King. No money can be borrowed by the company, the interest on which is to be paid out of the railway income, except with the consent of the Government. The Government has the right to appoint two commissioners to assist in supervising construction, and one or two to examine accounts and to assist in controlling the operation and management of the road. The minister of public works represents the Government, to the extent of the amount of stock held by the same, at stockholders' meetings. The King may order several roads to be operated as a single system, and all rates are ultimately determined by him; that is, the company submits schedules and rules for royal approval. The rates for the transportation of troops and munitions of war are prescribed. The company is not entitled to damages resulting from war. The franchise can not be sold or transferred without the consent of the King. Should the company fail to construct the road, the Government may itself complete the same or grant the franchise to others. Similarly, if the road is not operated in a satisfactory manner, the Government may assume the duty of managing it. The company deposits permanently in the Government treasury $5,000 in cash or negotiable paper, which is forfeited in case of violation of charter privileges. The Government reserves the right to build telephone and telegraph lines along the right of way without compensation to the company. Forms for periodical reports are prescribed. The State reserves the right to purchase the railway after 30 years, and, if necessary, at any time before the expiration of that period, on giving 1 year's notice. The purchase price is to be determined according to one of two methods prescribed in the charter.
The company must accept all future laws which may be enacted on the subject of railways, and the King has authority to construe the application of such Ïaws.
Switzerland. Two railway charters, granted in 1898, and submitted by the minister of railways as typical for primary and secondary roads, respectively, constitute a fitting introduction to the railway legislation of Switzerland.
The charter for the primary road was granted for a period of 80 years. All the incorporators are required to be citizens of Switzerland. The entire line is to be completed within 2 years after the beginning of the work of construction; but even after construction has been begun the federal council may demand such modifications in the plans as conditions of safety and other contingences may make necessary. The Cantonal Government preserves the right to claim all fossils and other objects of scientific and historical interest. (This provision is similar to an analogous section in the charter of New South Wales, in accordance with which minerals and oils discovered by the incorporators remain in the possession of the State.) The charter makes it the duty of the railway officials to furnish the federal officers with all the information and other means necessary for the execution
of their duties of supervision; and any railway official who is derelict in the performance of his duties and is not dismissed by the management may be peremptorily discharged by the federal council. The number of trains per day in each direction is specified, and the minimum rate of speed prescribed. In addition, the railway is subject to all the provisions of the regular Swiss railway regulations. Passenger cars are to be constructed on the American plan, and all trains must contain a specified number of classes of coaches, unless expressly permitted to do otherwise by the federal council. On demand of the council passenger coaches may be attached to freight trains. Rates of fare are fixed for each of the different classes of passengers, being 20 per cent less in case of freight trains. Children under years of age must be transported free, and those from 3 to 10 years old at half fare. Freight rates for the transportation of different classes of animals are fixed in the charter, and differences in rates are allowed in case of carload and less than carload shipments. A classification of freight is also included with corresponding rates for the different classes. All rates are subject to the approval of the federal council 2 months before the railway is open for traffic. The rates may be lowered whenever more than 6 per cent net profits are realized. In case of disagreement upon this point between the railway company and the federal council, the national assembly shall decide. On the other hand, whenever rates are not high enough to provide adequately for the expense of operation, they may be raised with the consent of the federal council. The railway company is required to maintain a reserve fund and a benefit fund for its employees. In accordance with the provisions of the federal law, all railway employees are required to carry insurance. In common with provisions of the general law of 1872, this charter reserves to the State the right of repurchase at any time after the expiration of 30 years of the life of the charter on 3 years' notice, and on every 1st of May thereafter. The company is to hand over the property in first-class condition, and all rights of employees, with respect to the benefit fund and insurance, are guaranteed in case of a transfer of the property of the road to the State. Should the railway property be in imperfect condition and the reserve fund not sufficient to enable the State to repair such defective portions, a sum of money shall be deducted from the purchase price equal to such deficiency in the reserve fund. The purchase price is determined under the charter as follows: In case the railway is purchased before the year 1935, the price paid shall be 25 times the average of the net profits of the 10 years preceding the giving of notice of such contemplated purchase to the company; if the repurchase is made between 1935 and 1950, the price shall equal 22 times the average net profits of the last preceding 10 years; and if the repurchase is made in 1950, 20 times such average net profits. The net profits are defined as that sum that remains after all expenses, including contributions to the reserve and amortization funds, have been met. In case the State does not purchase the road until the expiration of the charter period of 80 years, the company may take its choice between a refund of the original cost of construction or a price fixed by the federal court, which tribunal shall also decide all other questions with respect to redemption. In case the Canton in which the proposed railway is to be constructed has already purchased the railway, the federation nevertheless has the right of repurchase along with all other rights and privileges which may have been conferred upon the cantonal authorities.
The charter granted to the railway company organized to construct and operate the secondary road, using electricity as motive power, is essentially like the charter which has just been described, only differing in certain details. The corporate life of this company is limited to 80 years, and the approval of the federal council is necessary for the construction of the line. The width of the track is prescribed, and the period during which construction is to be completed is likewise indicated. The federal council may establish the speed of trains and approve the type of cars to be used. The minimum number of trains in each direction is fixed; and rates are indicated, though without reference to different classes of passengers. As to freight and the transportation of animals, the same classification is adopted, although the rates are somewhat higher. The State reserves similar rights of repurchase, but the price is fixed at 224 times of the net profits from 1935 to the expiration of the charter.
The discussion of general railway legislation in Switzerland will be confined to a few of the more important landmarks, beginning with the constitutional provisions of 1848. Under this constitution the federation reserved the power to undertake public works in its own interests or of a large part of the country at public expense. For this purpose it was empowered to exercise the right of expropria tion, and had power to prohibit the erection of any public works which might prejudice military interests.
From that day to the present time, Switzerland has had its series of laws culminating in the important repurchase act of 1898, under which the present scheme of nationalization of railways is being carried out. The idea of State railways had its beginning in the law of 1852, according to which the federation reserved the right to permit either cantonal governments or private companies to construct railways. The culmination of this idea found its expression in article 1 of the law of 1897:
"The federation may purchase and operate on its own account, under the name of Federal Swiss Railways,' all those Swiss railways which, because of their economic or military significance, serve the interests of the Eidgenossenschaft or of the major part of the same, when these can be acquired without making disproportionate sacrifices."
Thus the laws of 1852 and 1897 constitute the "boundary posts" between public and private railway enterprise in Switzerland. Under the former law, construction by the State was considered chiefly as a possibility, while under the latter it is regarded as an immediate probability. Furthermore, the law of 1897 places the entire railway system in the hands of the federation, while that of 1852 left it between the cantons and private companies.
The next important law is that of 1872, which brought order and system into Swiss railway legislation. Before that time much confusion, incoherence, and uncertainty had existed in railway statutes, all of which was done away with by the systematizing and unifying influence of the new law. Besides, the law of 1872 is in many of its essential features still operative through their incorporation in later acts. This law placed a time limit upon corporate life granted in charters, and restricted transference of charter privileges to direct assent of federal authorities. Time limits, during which construction could be completed, were also fixed, and provisions having in view sound financial organization introduced. The Government reserved the right to order the establishment of stations, double tracks, and other facilities. Railways were obliged to submit, on completion of a line, a detailed and accurate account of the expense of construction to the Bundesrath. Mails were to be transported free, and the Government had the privilege of using the roads during times of war. The manner of establishing railway rates was prescribed, and system and unity were introduced into the classification of rates, as well as into the physical organization of the railway system.
Another important step toward uniformity was accomplished in the enactment of a "normal concession bill." As the name indicates, this law furnished a normal charter, the provisions of which, it was assumed, would be incorporated in every railway charter to be granted in the future, only individual and local variations requiring modified forms. The railway companies had been reluctant to demand the right of the State to legislate in any manner interfering with what they considered their charter privileges. Both the law of 1872 and the normal charter law assert the right of the legislature to enact general laws which supersede the special charters in so far as there is a conflict between them. The charters granted during the years following this legislation contain repurchase provisions. What these were is not essential, since the law of 1898 contains what is applicable to this subject. In 1883 and in 1896 so-called accounting laws were passed. These were a necessary preliminary to the later repurchase act, in that they brought about greater uniformity in systems of railway accounting, and, in addition, provided the data upon which calculations of the repurchase price could be made. It has also been asserted that the methods of accounting prescribed under these laws resulted in lower valuations being placed upon railway property and a consequent saving in repurchase on the part of the Government. Under the federal law of 1897, approved by a heavy majority of the referendum in 1898, the federaation is empowered to repurchase all the Swiss railways in accordance with the repurchase provisions of their respective charters and the general law. The funds necessary for such repurchase are to be raised by the issuance of bonds. The entire indebtedness is to be canceled within 60 years by means of a well-elaborated plan of amortization prescribed in the law. Other plans may be adopted in case of mutual agreement between the companies and the Government. The ultimate measure of success of the Swiss scheme of nationalization can only be awaited with interest. It is at present altogether too early to pronounce judgment upon it. In the management of their railways the Swiss have adopted a system similar to that which will be described in case of Prussia. The railway side of the administration rests in the hands of a general directory of from 5 to 7 members and 5 circuit directories, the latter being subordinate to the former. These two classes of administrative organs may be considered as the legally responsible railway authorities. Running parallel with these are two other classes of authorities, advisory and deliberative in their nature. These are the administrative
council and the circuit railway council. In the organization of these bodies the representation of political, economic, and social interests is made the chief aim. Austria.—In order to illustrate the most important features of Austrian railway legislation, the chief provisions of a charter granted in 1868 to the Austrian Northwestern Railway will here be presented.
The minister of trade is the authority upon whom the final approval of the plan devolves, and no changes and modifications can be made without the consent of the authorities of the State. The franchise is granted for a period of 90 years, during which time the company is protected against the construction of competitive lines. The State may purchase the road at any time after 30 years of corporate life; and in case State purchase does not take place before the expiration of the charter the railway shall revert to the State without compensation to the company at the expiration of the charter limit. The incorporators are also bound by all the provisions of the general laws of 1851 and 1854. The time limits, during which construction shall be begun and completed, are established for different sections of the road and not for the road as a whole, as is common in the United States. The company must permit connections to be made with other railways at any time, and the incorporators must furnish bond in cash or negotiable securities for the faithful execution of all the provisions of the charter. Telegraph lines may be constructed by the Government on the right of way without special compensation to the company, and mails, together with necessary employees, must be carried free up to a certain limit, beyond which the stipulated amount of pay may be exacted by the company. Maximum rates are fixed in the charter for both passengers and goods on the zone system, which was elaborated and generally adopted in both Austria and Hungary in 1899. Special rates must be published as well as the regular rates, and the State authorities have power to reduce rates whenever net profits exceed a certain amount. Rates are also fixed for the transportation of troops and munitions of war. In case of famine and want, special rates known as 'famine rates" may be established. The charter limits the indebtedness of the road and makes provisions for the amortization of the
Charters granted in 1865 and 1870 are essentially like the one just described, only that in one instance direct reference is made to the Northwestern charter, and the document containing this reference is abbreviated in a manner very similar to that in which New York charters were abbreviated by reference to the Attica and Buffalo charter. One of the companies is specially bound to build whatever branches may be necessary for the development of the territory in which the road lies. In another charter, according to the terms of which the State may become a stockholder, representation of the State in the management of the road is provided for.
These charters contain no reference to pooling, although, as is well known, pooling is legally permitted in Austria. All roads entering into a pool must be duly represented in the commission which draws up the pooling arrangements, and all such arrangements are subject to supervision by State authorities.
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 Saxony 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."
1 In 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 Fleek; to the financial compilations of Hoeper; to the economic publications of von der Leyen; and to various essays in the Archiv für Eisenbahnwesen.