or stores in the possession of parties other than the undertaker. In case of buildings or stores of combustible material erected or located before the road was projected, special contracts are necessary. Buildings or stores may be placed within this legal limit when they do not endanger the lives or property of third parties, and when neither the undertaker nor the builder refuses to enter upon the necessary agreement. For secondary railways the limit is 25 meters, and the corresponding extension when the track lies on an embankment.

Different regulations exist in relation to forests, turf, and grain. In all Government forests a broken surface of from 2 to 4 rods in width, depending upon the elevation of the track, is continually kept clear of leaves, grass, etc. Frequently these strips are cultivated by people connected with the railway on payment of rent to the undertaker. In the State forests of upper Silesia, where there is much needle wood, in addition to this safety strip, a ditch 2 feet wide in the bottom and 8 feet at the top is dug at a distance of 10 rods from the track. All branches and twigs overhanging such ditches are kept trimmed, and the land surface between the ditch and the safety strip is kept broken. However, such a wide strip is not necessary in all places. The erection of any fireplace within 75 meters of any part of a forest of more than 100 hectares is forbidden. The undertaker and the proprietors of adjacent lands (when these are not public) usually find it to their interests to come to an agreement on these matters at the time the expropriation is executed. It is customary for the State (when the State is the undertaker) to purchase with the right of way such a safety strip and to rent it to employees. The State also employs, whenever necessary, Brandwerther," who follow limited trains through their circuit, and sometimes also ordinary trains. Influence of private interests in railway construction.-Paragraph 14 of the law of 1838 makes it the duty of the undertaker to build and maintain all crossings, drains, roads, fences, etc., which the Government may deem necessary, to insure the owners of adjacent property against dangers and disadvantages in the use of their property. Paragraph 14 of the expropriation law of 1874 relates to the same subject. In 1880 the minister of public works, pursuant to the decision of the Bundesrath, issued a rescript in which these paragraphs of the law were construed to include also all changes which, from time to time, must be made in order to protect private property. There exist also legal norms, by which the amounts to be paid to owners of damaged property are determined. It may be noted that even during the period of private railways, from the beginning of the railway era in Germany, the undertaker has been held responsible for injury to private property to the extent to which the Government deemed it just.

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A Prussian law of 1865, supplementary to paragraph 20 of the law of 1838, gives specific instruction about the relation of railways to mines. A ministerial rescript of May 2, 1887, makes it incumbent on railway undertakers to consult the interests of mining properties. The law of 1865 prescribed only the relations between the operator of the mine and the operator of the railway. Under this law a mine owner could not prevent the building of a railway, nor was he entitled to compensation for any but direct damages. Losses which he might sustain after the railway charter had been granted had to be borne by him alone. Gleim says that if no special legislation (“Bergwerkrecht ") had been enacted during earlier years (1865 and following) it is doubtful whether the subject of mines would have been taken out of general statutes governing private property.

Classification of Prussian railways.-The law of 1838 recognized only 2 classes, primary and secondary railways. Objectively considered, these did not differ in any essentials; but in the manner of their operation differences existed which found expression in the law. Secondary roads were governed by less onerous restrictions with respect to mails, transportation of troops, munitions of war, speed, the percentage of brakes to axles, and similar matters. In 1892 the so-called local railway law was enacted, which recognized additional classes, making in all 5 classes of railways. Of these 5, two are unimportant for present purposes because they include isolated private roads and so-called “Privatanschlussbahnen," the latter being defined in a negative way in the law of 1892, as railways which do not serve public traffic, but the tracks of which are connected with local railways or with railways subject to the law of 1838, in such a manner as to enable rolling stock to pass over from one track to another. Local railways had, of course, existed before 1892, but not until that time did they exist in the eyes of the law. Local railways in the technical sense are railways which are chiefly intercommunal, and not local in the larger sense in which secondary railways of the law of 1838 were considered local. Whether or not a railway falls within the jurisdiction of the law of 1838 or of that of 1892 depends upon a decision of the minister of state. The construction of local railways requires the approval of various authorities designated by the minister of public works. These authorities differ as the road lies within one parish, circuit, or province, or as it lies

within 2 or more of these. The examination which must precede the granting of a local railway charter is confined to the nature of the road and the rolling stock to be employed, with special reference to their safety and to their influence upon private property. In addition, the technical nature of the undertaking is examined and the qualifications of the persons to be employed, as well as other public interests, duly considered. This examination is granted only on application accompanied by a plan. The nature of this plan is not prescribed as under the law of 1838, and is left entirely to the incorporator or incorporators as in case of any other purely private enterprise. In case of applications for the construction of local railways, one of the chief questions is not Does this plan contain everything required by the law?" as in case of primary or secondary roads, but "Does the plan contain anything which is not in harmony with the provisions of the local railway law?" The incorporator of a local railway is thus inade to stand upon the same legal basis that any other private operator stands. The law reserves certain rights to the post-office department, and where highways are crossed or fortifications affected the incorporator must make satisfactory arrangements with the respective authorities. The same rule applies to parishes or other political units when they engage in the construction and operation of local railways. Although a local railway is looked upon by the law as a purely private enterprise, no such railway can be built until after the plan has been exhibited in specified public places for at least two weeks. The time and place of such an exhibition of plans for the inspection of the public must be advertised in accordance with the customary manner of making announcements in that locality. Any person may raise objections, either in writing or verbally, against the project, and a time must be set for the hearing of the interested parties. This hearing must be given in the presence of competent persons. On the adoption of the plan, the undertaker becomes personally responsible for its successful execution. For the first 2 years the local railway incorporator or company has full power over rates within the limits established by the charter, but after that period the proper authorities may, "with due consideration for the financial condition of the road," establish a maximum tariff rate. If at any time, in the opinion of the minister of state, a local railway attains such a degree of importance in the public traffic that it may be regarded as a part of the general network of railways, the State may, on payment of the full value of the road and after 1 year's notice, incorporate the local railway in the system of State railways. The law of 1892 prescribes rules for the determination of a fair price.

Time-tables and train service. -All time-tables of German railways are published by the administration in what is called a course book (Kursbuch). The small time-tables, to which Americans are accustomed, are rarely or not at all seen there, except in case of special trains. In the adoption of time-tables local wants are considered. Blanks, upon which the wishes of the respective localities are to be made known, are sent out to the various stations. Then, paying due consideration to these reports, through trains are first decided upon. Then the ordinary passenger trains are fixed, in the determination of which school time, market and factory hours, theaters, etc., are drawn into consideration. Connections between primary and secondary railways are to be so arranged as not to require night trains on the latter class. The introduction of night service on secondary railways depends upon the minister of public works, and the decisive point in the question is the income of the road per train kilometer. It is permitted to run secondary trains over tracks of primary roads, but only alternatively, and in cases where the building of additional track can thus be saved. To illustrate: A and B are important cities connected by a primary road. C is a small city lying off the main line, midway between A and B. Instead of building a road from A to C, trains may be run from A to (say) X on the main line, from which a track is built to C. The route CX is clearly a secondary road, but its trains may run over the track AX or XB, according to regulations governing all other trains of secondary roads. It is also permitted to run certain trains over primary roads, even though they do not answer all the requirements of regular primary railway trains. According to the manner in which trains are operated, they are classed as trains supplying regular wants (Bedarfsazüge), trains for the nobility, theater, and pleasure trains. The 3 last classes are governed by special time tables and instructions. The first class of trains is divided into the following subclasses: Fast, passenger, goods (local), mixed, work, and laborers' trains. The several names sufficiently indicate their character. Military trains are a heavy strain upon the railways during maneuvers. May 1st and October 1st are the days on which the regular time tables go into effect, and all requests or changes must be submitted to the proper authorities at least 4 weeks before the date on which the table is to go into effect. Then there are special tables for employees. These contain distances and stations, time of arrival, length of stops, time of departure, time it takes

to make the run from one station to another, crossings and junctions, maximum and minimum speed. The distances given are not real, but virtual distances. It is evident that grades and curves diminish the speed of trains. This might be adjusted in time-tables by allowing more time; but it is customary to add such a number of kilometers to the real distance as the train could traverse under normal conditions during the time which is lost through curves or grades. This sum is known as the virtual distance, and is the distance given in time-tables. All passenger trains must contain at least 2 (first and second) classes of coaches. Whether or not third and fourth class coaches must be run depends upon circumstances. In South Germany the fast trains frequently run only first and second class coaches, while in North Germany they add third class also. The so-called Personenzüge always carry first, second, and third class passengers, and usually fourth as well, while fast trains do not carry fourth class. (Note.-Fast trains correspond to the American limited trains, and the passenger train, Personenzüge, to the ordinary American local passenger trains.) The heating and lighting of trains, their speed and manner of running, train police reglements, kinds of coaches and manner of forming trains, railroad clearing houses, and international train service, etc., are all treated in Prussian regulations.

How tariffs are fixed.-The great variety and number of conveyances undertaken by a railway makes it impossible to enter into a special contract with each individual applying for railway service. But even if this were possible, considering the public nature of transportation and the many public, as well as private, interests involved, legislatures have regarded it prejudicial to these interests to leave the adjustment of rates entirely in the hands of the undertakers and entirely removed from public inspection and influence. Experience has shown that it is the tendency of undertakers, not under direct control of disinterested authorities in whose power lies the "promotion of the general welfare," to yield to other great private interests and charge different rates for the transportation of the same quantity of goods when shipped by persons who stand in varying degrees of favor. The cautious German lawmakers had early surmised the evils of discrimination in rates, and the law of November 3, 1838, as well as the Federal Constitution, reserved to the Government all powers necessary for its prevention. Special reference is here made to articles 4, 45, and 46 of the Federal Constitution quoted above. They indicate in a general way the power of the National Government over all railways in the Empire. Paragraphs 26 to 40 of the Prussian law of 1838 deal with the power of the State over rates. The essential feature of these provisions, as modified by supplementary legislation and ministerial rescripts, as well as the provisions of the law of 1892 on the same subject, are indicated below.

The State, acting through the minister of public works, has the right, after the expiration of 3 years from the January 1st next following the opening of a railway, to approve (1) all tariff schedules (the 3-year limit is practically void because of the reservations the State makes in granting charters); (2) any proposed lowering, raising, or other changes in existing rates; (3) the establishment of freight tariff schedules, tariff instructions and regulations, exceptional (special) and differential rates. The degree in which the State has made use of these rights has varied with conditions. This applies only to primary railways. Secondary roads may, during the first 8 years of their existence, raise or lower rates at will, provided they do not go above a certain maximum, prescribed by the minister of public works for that period of time, and that their rates do not conflict with general tariff principles enforced on State lines. Before the passage of the law of July 28, 1892, railways of purely local significance enjoyed special privileges which are now defined for all classes of local roads. It must be recalled that prior to 1892 the law recognized only primary and secondary (Haupt- und Nebenbahnen) roads, and that these local roads (using local in the narrow sense) had no well-defined legal position. The law of 1892 makes the following provisions concerning rates on local railways: "That authority upon which the approval of the project devolves is required to make an agreement with the undertaker as to time-tables and rates; and the periods of time in which such agreements shall be subjected to revision, provided that the undertaker may be allowed to establish his own rates during the first 5 years, and that thereafter the State shall only fix maximum rates, in doing which due consideration shall be given to the financial interests of the road." The law gives the State this privilege, but does not make it a duty, and it is the policy of the State not to interfere with any arrangements the undertaker may see fit to make, provided he does not discriminate and does not do anything contrary to public interests. The law simply reserves to the State the right to act in behalf of the public. What Prussia reserved for herself in her laws, the Federal Government reserved to itself in

the Constitution. The latter also has the right to interfere in behalf of the general welfare, even if the several States had not reserved that right; and it is possible, too, that circumstances may arise in which the Federal authorities must overrule the State. As to military rates, the Constitution gives the Government the right to fix them (reduced at a uniform rate), but neglects to designate a particular authority. The "Reichsgesetz uber die Naturalleistungen fur die bewaffnete Macht im Frieden," of February 13, 1875, vests the power of fixing and revising military rates in times of peace exclusively in the Bundesrath. The Bundesrath has the same power in fixing and revising rates in times of war. In neither case is a hearing of the undertakers mandatory. Next, the relation of railways toward the post-office department may be mentioned. The railwaymail law now in force was passed on January 1, 1876, and consequently applies only to primary and secondary roads. But it was found necessary to exempt secondary roads from the provisions of this law and subordinate them to special legislation (May 24, 1879). The post-office department may cause the primary roads to meet the following conditions: (1) To transmit free of charge all letters, newspapers, money-including uncoined gold or silver, jewels, and precious stones without regard to weight-and all other mail packages weighing 10 kilograms and less. Also all railway-mail employees, going and returning. These provisions are limited only in case more than 1 car on every scheduled train is required for the transportation of the mail, in which case a nominal sum is paid by the post-office department to the railway undertaker, private or State. The post-office authorities are required also to send early notices of probable demands for additional cars. This is especially important during holiday seasons. duties of undertakers of secondary and of local railways are legally defined, that of the former in the regulations of 1879 and of the latter in the law of July 28, 1892. Because of the numerous conditions influencing the fixing of rates on these railways the schedules are much longer and involved than those of primary roads. Similar regulations have been made concerning telegraph and custom-house officials in their relation to the railways.

The

Publicity of rates.-All railways-State or private, primary or secondary, or local-are required to publish their rates under the supervision of the same authorities which fix them. Such publication is required of all tariffs-passenger, freight, local, through rates, incidental fees, etc.-together with the rules and regulations governing their application and all changes that have been made in them. Tariff rates of all State roads are published in the Staats-und Reichsanzeiger, the official paper of the Government. However, no definite rules exist as to the particular form or place of publication. As a rule, all the important papers of the towns interested publish them; and, of course, they are required to be posted in all station houses and railway offices. Every advance in rates must be published, together with the old rates, at least six weeks before the same shall take effect. The instructions of the minister of public works for the practical application of the law of July 28, 1892, declare that focal railways shall be required to publish their rates in a local paper to be designated in the charter.

Financial obligations.-The capital stock.-Section 1 of the law of 1838 provides that the sums of money required for the original investment (Anlagekapital) must be raised through the sale of stock. The amount of stock is fixed in the charter. Section 2 provides that no stock shall be issued until its full face value has been actually paid in. Partial payments are simply receipted. Every signer of stock is responsible for 40 per cent of its face value, even though he should transfer his stock to a third party. For the emission of additional stock and for the taking of loans, in which purchases on credit shall not be included, the approval of the minister of public works must first be obtained and a sinking fund established. Ministerial consent is also necessary for contracting floating debts. With issues of priority obligations and preferred stock it is different. These require special authority (landesherrliche Genehmigung ") and official publication of the amount to be issued, rate of interest, purposes for which the money is to be expended, and the method of amortization. Since 1872 these powers are exercised by the minister of public works. Before that time special privileges of this kind were granted by the Government according to a law of June 17, 1833.

Appropriation of earnings.-By the law of March 16, 1867, all railway undertakers are under obligation to submit annually, not later than May 1, a full account of their receipts and expenditures, together with the necessary papers (bills, vouchers, etc), and by a court decision they are compelled to submit monthly reports if requested to do so. The law further provides that all taxes (Abgaben) shall be paid out of that part of the gross earnings over and above those parts employed in meeting the expenses for maintaining, managing, and running

the road. All sums paid into the renewal and reserve funds are to be considered part of the running expenses. The reserve fund has its origin in provisions of sections 29, 33, and 38 of the law of 1838, and is usually expressly provided for in the by-laws and charter of the company. The renewal fund was created later, but by rescripts of 1857 and 1858 it applies to all roads irrespective of the time during which they were built. It is kept distinct from the reserve fund; and, in case earnings are insufficient to meet the regular demands of both, the available earnings go to the former. The size of the renewal fund and its rate of increase depends much upon the character of the road, and is determined for each separately. The general nature of these funds being that of insurance, their accumulation becomes unnecessary in case of State roads; nor do the legal restrictions on the issue of stock apply to the latter. The various provisions for the distribution of dividends have in common the requirement that certain maximum portions of the gross earnings may be distributed as net profits. Such distribution is not obligatory. Paragraph 34 of the law of 1838 establishes normal formulæ for computing gains and for gathering necessary statistics. The most important legislation on the appropriation of earnings still in force is the "Gesetz, betreffend die Verwendung der Jahresüberschüsse der Verwaltung der Eisenbahnangelegenheiten" of March 27, 1882. It provides that the annual surplus shall be expended for the following purposes in the order given: (1) To pay the interest on the State railway debt; (2) to meet certain deficits in the State budget which would otherwise have to be met with loans, not to exceed 2,200,000 M annually; (3) to pay off the bonded indebtedness.

Taxation.-Law of November 3, 1838.-By section 38 of the law of November 3, 1838, railways are under obligation to pay taxes in proportion to the total capital stock, less the expense of maintenance and operation and the annual contribution to the reserve fund. Railways are exempted from the tax on industries (Gewerbesteuer). The succeeding paragraph provides that this tax shall be paid into the State treasury as a compensation for expenses incurred by the Government on account of the roads and for the amortization of the original stock. After such amortization, the undertaker may be bound to arrangements of such a nature that the receipts (“Ertrag der Bahngelder") shall not exceed the cost of managing and operating the road. These provisions of the fundamental railway law were followed by important supplementary legislation.

Law of May 30, 1853.-This law has reference only to railways owned by stock companies. Under its provisions the first tax was levied in 1854 on the net proceeds of the year 1853. The taxable net proceeds are defined as that sum which remains for distribution on the capital stock after deducting from the gross receipts the cost of administration, maintenance, and operation, the necessary contribution to the reserve fund, and the sums required for the payment of interest and loans. Capital, on which a fixed rate of interest is paid without being entitled to dividends, even if raised by means of preferred stock, shall not be included in the capital stock, but it shall be considered equivalent to loans. The rate of taxation is fixed at one-fortieth of the net proceeds, not exceeding 4 per cent of the capital stock. For net proceeds exceeding 4 per cent of the capital stock the following shall be provided:

From 4 to (inclusive) 5 per cent, one-twentieth; from 5 to (inclusive) 6 per cent, one-tenth; from 6 per cent and over, two-tenths; in addition to the one-fortieth on all net proceeds up to 4 per cent. To illustrate: Take capital stock to the amount of $10,000, the net proceeds of which equal the sums given in Column I, then the amount of the tax equals the sums in Column II, and the sums remaining for distribution among the stockholderss are given in Column III.