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HIST0IUITHIRD SERIES VOLUME 11 NUMBER 1 MARCH 1990

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r*i.I0IIILNAI,. !'IIANSIDOITT II ISTOTBITHIRDSERIES VOLUMEIT NUMBERI MARCHI99O

II

tlI

CONTENTS

Recent American research

Editorial

The education of American carr,i.a,ge makers, l gB0_19 t d Edward_ The priuatisation of the Brunswick State Railways in I Bd9_7 0John M. Kleeberg

ndon

Hulton-

The white sea-Bartic canar: a route to the Russian north Ian M. MatreyThe German National.Ra*way betueen the worrd, wars: mod,ernisation orpreparation for uar? Alfred i. Mierzejewski'see this amazing America':-the rong-d.istance bus ind,ustry,s use of ad,uertisingin itsfirst quarter ientury Margarei Walsh

BOOKREVTEWS q0Peter L' Payne on Transport in victorian Britainedited by MichaerJ. Freeman and Derek H. Aldcroft I

steven Tolliday on conspicuotu Productionby Donald Finlay Davis and The Automobilc Age byJamesJ. FlinkSheila Marriner on The Merchant S ehooners byBasil GreenhillTerry Gourvish on A Bibriography of Bnt,sh Ra*uay Htstory and supprementcompiled by George ottreyPhilip s. Bagweil onThe Railwalworkhops of Britarn, r8D-I985by EdgarJ. Larkin andJohn G- LarkinDavid Brooke o n Thames Tunner to chctnner Tunner edited.by will Howie and Mike chrimesStuart Cole on The History of British Bus Seruire.s byJohn HibbsSimon P. Yille on Deuon's Coastline and, CoasnlWatcrs edited by D. J. StarkeyM' c' Adams-webber on ottaua Riuer canak and, the Defence of British North Americaby Robert Leggetcorin ne Mu',ey on crosuirp: srate-owned wirhoul Tears rty w. .]. crosrand-Ta vror

Mancbester (Jniaersity press

ll

P. Duggan I

r2

29

40

6l

The priuatisation of the BrunswickState Railutays in 7569-20

JOHN M. KLEEBERG St. Catherine's College, Oxford

State railways and privatisationTh,e railways of the duchy of Brunswick,r arthough they extended over only27.?'8 km when privatised, occupied a central poJition in the North Germanrailway network. Their privatisation provides us with an insight into the activityof the German private railway companies, which, in terms Jf capital, were thelargest German companies before rgr4. when the prussian governmentacquired the major railways in rB79-82, it paid 506.3 million ,r.i.k, for thecologne-Minden Railway, bgl.l million marks for the Rhenish Railwaycompany and 633.8 million marks for the Berg-Mark Railway. By conrrast, thecompany with the largest market capitalisation or-, the Berlin bourse at the end of'1913 was the Deutsche Bank, then worth 496 million marks.2 yer because rheGerman states acquired these companies from lg75 onwards, they have beenunjustly neglected yh"l writing the history of German enterprises.3 Furrher-more, the Brunswick railway privatisation was part of a series of privatisations inGermany and Austria during the period lB54-73. These privatisations areinteresting for their parallels with the modern privatisation movement and intheir own right.

The earliest German advocates of railways, such as Friedrich Harkort andDavid Hansemann, envisaged a state-run system.a But before lB48 prussia 6idnot have the funds. Prussia needed the approval of the Diet before it could issuestate loans and the monarchs did not wish to dilute their power by summoningthe Diet. So Prussia let private investors build its first railways. Afier the defeatof the liberal revolution of 1848, the Prussian Trade and Finance MinisterAugust von der Fleydt extended state ownership and operation of the railnetwork. Until 1859 the Prussian Lower and UppLr Housis acquiesced in vonder Heydt's progrzrmme, but in that year both Hbrr"r rebelled and refused tovote further funds. The year 1859 was the watershed, when both prussia's Dietand bureaucracy decided on private in preference to state railways.5

The priaatisation of the Brunswick State Railways

Bavaria's policy on state versus private railways was no less erratic thanPrussia's. Althou$h lF (ana Germany's) first railway, Nuremberg-Fflrth, wasbuilt by a private -ompany in 1835, in a debate in the Bavarian Diet in 1841Premier carl von Abel declared, 'Never, gentlemen, will the government givethe chief lines of these railways into private hands, never and under noconditions.' But the poor financial performance of the Bavarian State Railwayturned public opinion against state management. In 1856 Bavaria reversed itspolicy and granted the concession for the Bavarian Eastern Railway, which, by1g7S,when public opinion changed yet again and the state took it over, had buiit770 km of track between Munich, Nuremberg and Furth im Walde.6

Austria's first railways were built by the stare, but in 1854-58 the FinanceMinister, Freiherr von Bruck, privatised the railways. Although there werecampaigns against private railways, notably that against the Northern Railwayconducted by the antisemitic leader Georg von Schonerer in 1884-85, Austria'spoor finances committed it to private railways.T

The most successful German state railways were those of the duchy ofBrunswick. Under the guidance of the brilliant civil servant August von Ams-berg, Brunswick pioneered the construction of railways in Germany. A fewscattered islands in Prussian and Hanoverian seas, Brunswick, in Amsberg'sopinion, could preserve its political. independence and its commercial import-ance only by making it cheaper to ship goods through Brunswick rather than

13

onlyman

actlvltythe

rnentfor the

ilway

, theend of

thebeen

rther-ln

andia didlssue

ngdefeatinister

railln von

toDiet

Minden Hannover Lehrte

HolznindenHaLberstadt

8ad Harzburg Ber

Ra I lvaysBelg-Hark Ralluay ConpanyBerIln, Pqtadam & ilagdeburg Railvay CompanyBrunEvick State RailraysCologne-Minden Rallyay ConpanyHanover-Altenbecken Railvay ConpanyHanoverian State Rallvays

(after 1865 ovned by Prussla)ilagdeburg-c6then-Ha11e-Lelpztg Railuay conpanyHagdeburg-Halberstadt Ral luay conpanyRoyal llestphallan Rallvay

(ovned by Prussla)

RhIne brldges

Fig. l.

ns areand in

WrElnEMEIa:-@rTlg

Tlttenberge

llo 1 fenbatte 1

The.lottrnaL oJ TransPort Htstory

around it. Amsberg advocated the construction of railways as early as 1824' In

1837 construction-t"gun on the Braunschweig-Wolfenbiittel-Bad Harzburg

line. Braunschweig-Wilfenbtittel opened on 1 December 1838; Braunschweig*

Harzburg on 3l dctobe. 1841. Th; to1ul cost of this line (after double-tracking

Braurscliweig-Wolf'enbtittel) was 3'5 million marks, at the very low cost of

76,858 marki per kilometre.sThe next ,tug" ,u, to build rail links to the systems of Prussia and Hanover'

This was accoiplished by building the Wolfenbtittel-Jerxheim-Oscherslebenlines (56 km, opined 1843) and the line from Braunschweig through vechekle

ro rhe Hanoveiian border (16 km, opened 1844), which cost Brunswick 6'4

million marks. The total amount invested in the state railways thereby rose to

l0 million marks, at a cost of 84,563 marks per kilometre' These two lines

completed Brunswick's share of the great through route from Berlin to cologne.

This'was completed in 1847, when cologne could be reached by travelling over

the Berlin pttsdam & Magdeburg Riilway to Magdeburg, then over the

Magdeburg-Halberstadt Rai"lway to Oschersleben, then over the Brunswick

Strt". nul#ays via Oschersleben, Jerxheim, Wolfenbtittel, Braunschweig and

Vechelde to ih" Hanoverian border, then over the Hanoverian State Railways to

the Prussian border at Minden on the Weser, and finally over the Cologne-

Minden Railway to Cologne, u'hence one could reach Brussels and AntwerP over

the Rhenish Railway, and from there London or Paris'

These lines were followed by the southern line, BorBum-seesen-Kreiensen,

60.6 km, opened in 1856; Kreiensen-Holzminden, 46'5 km, opened in 1865;

and Bor8um-Jerxheim,23.2 km, opened 1868. In total, 273'8 km of'railways

were built duLing the period of siate ownership.e Most of the capital rvas

raised by 3.5 peicent ind 4 per cent state bonds (Schuldscheinen), issued by

the Leihhaus (the Brunswick State Bank), for a total of 40'2 million marks.

Operating surpluses contributed another 16'7 million marks, so that the total

.upitat i.riert.d was 5G.9 million marks, or 207 ,952 marks per kiiom.etre. 'fo pay

Ua.t otd railway debts and build the new lines planned in 1867, the ducal

government issued through the Bank ftir Handel und Industrie in November

igOA u lottery loan of 3O million marks, to be fully amortised over fif ty-six years,

ended in 1924.10-fhe most profitable traffic on the Brunswick State Railways was the po-rtion of

the Berlin-iologre traffic over the section Oschersleben-Jerxheim-Wolfen-

btittel-Braunschweig-vechelde-Hanoverian border. This through traffic made

the Brunswick state"Railways one of the more profitable (]erman railways and

the most profitable German state railway. Until 1847 rnost of the income came

from pasiengers, but the income from freight soon surpassed it; by 1868 the

incoml frorifreight was treble that from passengers. The operating exPenses

were at first very- high: in 1839 they amounted to 60 per gent of the gross

income, in 1841 i" 95 per cent, but by 1851 the exPenses fell below 50 per cent

t4The priut

and stal

ruggedoperatirtable 1.

ThestArthurprivatisrcent.l I

companinvariatl848-61

Year

r839I 840I 841

18421 8431844I 84518461847I 848

AuerageSource.

Entstehr,

railwayaveragfiguretof the

Per cel

than t

Berl

Braun()ermz

The priuatisation oJ'the lJrunswich State Railuta,1s 15

and stayed around that figure, a remarkable accomplishment in view of therugged terrain of the Harz Mountains, where ,ru,ry lines were located. TheoPerating surplus, as a percentage of the capital invested, varied as shown intable l.

These results are vastly better than the record under private management, asArthur von Mayer has pointed out, because the averag. io. the divide-nds of theprivatised Brunswick Railway Co. between 1869 and tgga was a mere 2.51 percent.lr compared with rhe average dividends paid by German railwaycompanies calculated by Fremdling, the Brunswick Slate Railways paid a rerurninvariably worse than average in 1840-47 and invariably better thin average in1848-68; cornpared with the average return on capital invested of GeJman

Table 1 . Return on capital of the Brunsutck State Railways, 1 g 3 9_Gg

Year Year Year

Transport History

arly as 1824. In-Bad HarzburgBraunschweig-double-trackingery low cost of

a and Hanover.n-Oscherslebenrough VecheldeBrunswick 6.4

thereby rose tofhese two linesrlin to Cologne.,travelling overthen over thethe Brunswir:kunschweig andtate Railways tor the Cologne-C Antwerp over

ren-Kreiensen,:ened in 1865;km of'railwayshe capital wasnen), issued bymillion marks.r that the total)metre. To pay367, the ducal: in Novemberfifty-six years,

the portion ofheim-Wolf'en-;h traffic matlen railways and) income camet; by 1868 thetting expensest of the grosslw 50 per cent

I 8391840184 i1842I 8431844l 845I84618471848

5.921.701.12r'993.262.302.003.223.555.24

18491850l85ll 8521853I 854l 855l 856l 857I 858

7.988.04

10.5911.6513.47I 1.52l 1.2315.3610.078.22

I 8591860l86r1862l 8631864l 86518661867I 868

8.579.88

10.32I l.l0l 1.5214.3613.379.92

12.0510.2 l

Auerage: 1839-68 : 8.32 per cenr.Source. Arthur von Mayer, Geschichte und Geographie d,er Deutschen Eisenbahnen uon ihrerEnt.stehung bis auf die ()egenwart 1890 (Berlin, l8gl), p. 2g3.

railway companies, the Brunswick state Railways likewise paid worse thanaverage in 1840-45 and berter than average in lg46-68.t2 Although Mayer,sfigures are higher than those I have calculated from the available ur."rul ..[o.r,of the Brunswick railway administrarion, which are 9.3b per cenr for 1g65, 7.01per cent fbr 1866 and B'24 per cent for I867, these lowei figures are srill higherthan the national average.'3

Berlin-Lehrte and the rise of the Magdeburg-Halberstadt RailwayBraunschweig is a natural centl'e in the North German railway network: all earlyGerman railway theorists, such as Friedrich List and Friedrich Harkort, en-

16 The Journal of Transport Hi.story

visaged a line from Berlin to Hannover along the route Berlin-Magdeburg-Braunschweig-Hannover, but not a direct link between Berlin and Hannover.Unfortunately, the railway station in the city of Braunschweig was poorlysituated, and a terminus. Time and money were lost while the trains werereversed. The railway station, however, was a powerful catalyst of urban change,radically altering property values; and railway construction in cities is fearfullyexpensive.ta Because of this Braunschweig flinched from resiting and rebuild-ing the station until 1960, when the Deutsche Bundesbahn built an ugly newthrough station. rl'

With the Braunschweig railway station problem nowhere near a solution, adirect line from Berlin to Lehrte (a railway junction just to the east of Hannover)became'increasingly attractive. Until 1866 the kingdom of Hanover, solicitousfor the prosperity of Brunswick (since both Hanover and Brunswick were ruledby the Guelph dynasty) blocked the construction of a direct route betweenBerlin-Lehrte-Hannover.l6 Prussia's annexation of Hanover in 1866 elimirr-ated this opposition. The construction of the new route from Berlin to the westwas encouraged by a new pro-competition atmosphere in the Prussian andNorth German ministries. The free-trade tendencies of Bismarck's governmentwere reinforced by the appointment, in 1866, of Rudolph von Delbrtick asPresident of ttre Chancellor's office. Delbrtick's major economic counsellor, OttoMichaelis, was a noted advocate of laissez-faire.In particular, ()tto Michaelis wasamong the foremost advocates of the railway competition theory: the concessionof competing railway lines would bring freight rates down and pay forthemselves by the increased traffic. Bismarck was won over to this theoryand pushed for the construction of the Berlin-Lehrte Railr.vay by a privatecompany.lT

The extent to which the railway competition theory holds good is a matter ofsome controversy. Otto Blum, writing in 1933, claimecl that it had been shownto be untenable. A contemporary writer, Franz Ftirchtegott Perrot, argued thatwhat freight reductions there had been had come not frorn competition br.rtfrom the agitation of powerful pressure groups. The most recent word on thisquestion is that of Rainer Fremdling, who, in a cliometric stucly, concluded thatcompetition did indeed bring rates down as a result of vast increases inproductivity among railway companies.rs

The concession for the Berlin-Lehrte Railway was granted to a consortium ofBerlin banks, led by the Disconto-Gesellschaft and S. Bleichroder, who turned itover to the Magdeburg-Halberstadt Railway under a contract of l5 February1867. The Magdeburg-Halberstadt Railway was a small but. extremely profitablecompany, which had important through traffic on the line Magdeburg-Oschersleben, plus local traffic on the line Oschersleben-Halberstadt. Until1866 it was operated by the Berlin Potsdam & Magdeburg Railway Co. (BPM). Inthe 1860s it began to break loose from the reins of the BPM, acquire other

The prtut

railwaysBernbuttion prothe raihof the nto contitprograrfully at

Railway

The t'fhe Berail cen'two at tr

BrunsucomParearly s

industrwhich rprivatisThe n,

resembthe durlB7 3.22

discussand forand ke,

the Saa

most o.

war ofWestplgovernbecausBismarperforconstitsale o1

OneperfbrMusterwealth

t

Transport History

lin-Magrleburg-L and Hannover.veig was poorlythe trains wererf urban change,cities is f'earfullying and rebuild-rilt an ugly new

:ar a solution, atst of Hannover)nover, solicitous,wick were ruled, route betweerrin l866 elimin-erlin to the west,e Prussian and:k's governmenton Delbnick as

counsellor, Ottcr:o Michaelis was: the concessionr and pay forto this theory

ty by a privare

rd is a matter ofrad been shown:ot, argued that:ompetition butnt word on thisconcluded thatst increases in

l consortium of', who turned itrf l5 Februarymely profitable: Magdeburg-berstadt. Untilr Co. (BPM). Inacquire other

The priuattsation of the Brunswick State Railways 17

railways and builcl new lines. In 1863 it bought two smaller railways, Cothen-Bernburg and Magdeburg-Wittenberge; it also started an ambitious construc-tion programme, opening 172 km of new track by 1872. The agreement betweenthe railway and the Disconto-Gesellschaft in 1867 provided the railway with one

of the most important rolltes from Berlin to the west, plus the financial backingto continue its aggressive programme of acquisition and new construction. Thisprogramme culminated in 1872, when the Magdeburg-Halberstadt Railwayiull! acquired a much older rival, the Magdeburg-Cothen-Halle-LeipzigRaiiway, and took over the operations of the Hanover-Altenbeken Railway.re

The bidding war of 1869

The Berlin-Lehrte Railway caused the decline of Braunschweig as an importantrail centre: by 1899 thirty fast trains stopped at Hannover every day, and twenty-two at Magdeburg, but only seven stopped at Braunschweig.20 Anticipating this,Brunswick's civil servants began to consider selling the railways to a Privatecompany. Another reason was a new mood in favour of privatisation. In theearly stages of industrialisation many German states sought to encourageindustry by setting up state-run model workshops (Mwteranstalten), none ofwhich worked out very well. Many states thus had large industrial holdings. Theprivatisations of the 1860s and 1870s were as likely to involve these as railways.The neighbour of the duchy of Brunswick, the duchy of Anhalt, whichresembled Brunswick in size and in many industries (potash, lignite), privatisedthe ducal engineering works in lST2.2t Mecklenburg privatised its railways in1.873.22 Prussia first considered a major privatisation in 1863, when Bismarckdiscussed with Bleichroder selling off the state's holdings of mines, foundriesand forests in the Saar to a private company to raise money for the governmentand keep the state mines out of the hands of Napoleon III if Prussia had to cedethe Saar to France. This privatisation never went through.23 In 1866 Prussia soldmost of its shares in the Berg-Mark Railway on the bourse to raise funds fbr thewar of that year.2a Another privatisation rnooted in 1866, the sale of the RoyalWestphalian Railway to the Berg-Mark Railway, would have resulted in thegovernment relinquishins ownership but not the management of the railway,because the government operated and managed the Berg-Mark Railway.Bismarck wanted to sell these enterprises not because he believed they wouldperform better in the private sector, but to fund Prussia's wars during theconstitutional conflict. Suspicious of Bismarck's intentions, the Diet vetoed thesale of Westphalian Railways.2r'

One privatisation which dicl occur in the belief that the enterprise wouldperform better in the private sector was Prussia's sale in 1869 of a formerMusteranstalt, the ironworks Konigshtitte in Upper Silesia to investors, led by thewealthy magnate Count Henckel von Donnersmarck, who merged it with their

jt--

18 The J ournal oJ''l'ransport History

Laurahtitte to form the Vereinigte Konigs- und Laurahtitte. The history of theKonigshutte is a classic argument in favour of privatisation: under state

-u.rug.*.nt, it performed dismally; after 1869 it flourished.26In September 1866 the Brunswick State Ministry sent a proposal to the railway

commirree of the Diet for the sale of the state railways. The Ministry emphasisedthe changed situation now that Prussia had annexed Hanover. Prussia hadembarked on a policy of railway privatisation, as witnessecl by the proposed sa.le

of the Westphalian Railway to the Berg-Mark Railway Co. The competitionfrom private lines was increasing; the state debt was undesirably high. With so

large a proportion of Brunswick's budget revenue and expenditures determinedby the railways, the state budget was being sucked into a maelstrom of increas-ingly uncertain industrial speiulation; ur-ril thir it should avoid by all ntears.27

Although the Diet rejected this first attempt, the government did succeed inpushing through one privatisation in 1867, sellirrg the dur:al iron ore mines toih" Cologre private bankJ. 1,. Eltzbacher & Co.28 In 1873 it was the turn of theducal lignite mines, which became a very successful private company, theBraunschweigische Kohlen-Bergwerke.2e

Meanwhile the state debt burden continued to nlount. In 1866 the state

railway debr amounted to 30.5 million marks bonded debt (uerhriefte Schuld) ancl

6.4 million marks floating debt (noch nicht uerbrieJte Schuld) versus a general state

debt of 9.7 million marks. In 1868, to finance further expansion, the duchyissued a premium (lottery) loan through the Bank ftir Handel und Industrie.When the bank considered Brunswick's straitened finances and its increasingmountain of debt, it proposed to buy the railways to solve the problem. 'fhe

government required that if the bank purchased the railways it would have tofound a separate company, domiciled in the duchy of Brunswick, so as to keepcontrol and the revenue in the duchy. 'Ihe government reached an agreementwith the Bank ftir Handel und Industrie in March 1869.30

Rival banks soon sought to partake of this attractive piece of business. Themethod was simple: the rival consortium submitted a bid to the ducal gov-

ernment for the railways, and the Bank ftir Handel und Industrie was forcedeither to erlter a potentially disastrous bidding war or to let the rival into the

consortium. The president of the Bank ftir Handel uncl Industrie, Gustav

Mevissen, resigned himself to this when he noted during the bank's supervisoryboard meeting of l4 June 1869: 'Brunsw. railway [deal] has met with delays..

[Seek] undersianding wittr Bleichroder, Rothschild and Disconto-Geseilschaft.'3r'Ihe Disconto-Geseilschaf t first expressed an interest in acquiring the railways

in a letter of 8 April 1869. A month later its director, Adolph Hansemann, came

to Brunswick to conduct the negotiations in person. On iB July 1869 theDisconto-Gesellschaft formed a consortium rvith local businesslnen to bid fc-rr therailways. 'fhe consortium offered 30 million marks to be paicl in solid securitiesbearing a 5 per cent coupon, an annuity corresponding to the amortisation of

't'he priuatis

t.he state dtto it returnconslitute I

to another-l'he comp

'fhe ducthe railwallbrced itsAfter a mtreached a

on 27 Sep

ancl 2'6 nl

the loan ocapital ofund lndu& S<)hneNuretnbe[.ltzbacherrntl Indtcleutscheprivate bnranufacttrncl InduNtirnbertbatrkers,ancl augr(]ermanventures.n:rnre of

In theStlousbeAlbert (rarilwaysrailwayson 5 Jurtlifiy-eiglactual cl

cotrsor(ilStrousbefl-orn in<

In partiu'ays inl

Transport History

he history of thern: under state1.26

salto the railwayistry emphasised,er. Prussia hadte proposed sale'he competitionlv high. With soures determinedtrom of increas-by all means.27

, did succeed inon ore mines tor the turn of the: company, the

1866 the stateiefte Schuld) ands a general staterion, the duchyund Industrie.

d its increasins: problem. The: would have tok, so as to keepI an ap;reement

I business. Thethe ducal gov-trie was forcede rival into thelustrie, GustavLk's supervisoryLet with delays.Gesellschaft.'3 t

ng the railwaysISemann, came

July 1869 then to bid for thesolicl securitiesrmortisation of

T'he priuatisation ol the Bru"rtswick State Ra,il,utay

the state debt, and any profits above 6 per cent (which would have cor-responcled[o a return of 13.95 per cent). In acidition the Disconto-C].esellschaft prornisecl toconsl.itul.e and operate a separzrte compzrny for the railwavs and not to sell themto another part|, which could have rnacle a quick profit of'about 3 rnillion marks.'fhe company would have a share capital of' 33 rnillion marks.

The ducal sovernment rejected this offer on the sround that the profits f romthe railways woulcl nevel'exceed 6 per cent.'i2 Instead, the Discor-rto-(]esellschaftforced its way into the consortium led by the Bank fur Handel und Industrie.Af ter a month of hard b;rruaining the f)isconto-Gesellschaft and the consortiumreached a tentative agreenlent on 16 August 1869; they signed a final contractor.27 September I869.'I'he terms of the contractwere 30 million marks downand 2.6 million nrarks annuity fbr sixty-four years (to cover the debt service onthe loan of lBOB). 'fhe consortium was to Ibrm a separate company with a sharecapital of 36 million marks. The consortium consistecl of the Bank frir Handelund Industrie, the Disconto-Gesellschaft, S. Bleichroder, NI. A. von Rothschild& Sohne (the Frankfurt horrse of Rothschild), 't'heodor von Cramer-Klett inNurembers, the Nlitteldeutsche Creditbank in Meiningen and Jacob LobEltzbacher in Cologne.33 The Disconto-Gesellschaft and the Bank fiir Handeluncl Industrie were the two largest Clerman joint-stock banks. The Mittel-deutsche Clreditbank n,as a smaller joint-stock bank, donrinated by the Frankfurtprivate bank Gebrtider Sulzbach. 'Iheodor von Cramer-Klett was a Ieadingmanufacturer of railrvay coaches who rvorkcd closely with the Bank frir Handelund Industrie; his company eventu:rlly becarne the Nlaschinenfabrik Augsburg-Nrirnberg (MAN).3+ Bleichroder- was one of the most prominent l]erlin privatebankers, whose clients inclucled Bism:rrck.35'Jacob Ldb Eltzbacher ran a ,youngand aggressive Cologne private trank, which was a major market-rnaker in rvestGernran rnining shares (Kuxert), and participated in a number of'Brunswickventures, most notably the privatisation of the ducal iron ore mines under thenarne of the Harzer Werke.:"i

In the rneantirne, Germany's leading railway contractor, Dr Bethel HenryStrousbers, ofI'ered to purchase the rzrilwuys.37 On 1,1 May 1869 the bankerAlbert fkrhen of Hannover expressecl an interest in leasing or buying therailways on behalf of the Hanover--Altenbeken Railway Co. Infbrmed that theraihvays were not being offered for lease but for sale, a committee led by Cohenon 5June 1869 submittecl an offer of 30 million marks clorvn plus an annuity forfif ty-eight years of 2'B million marks. On 21 August Cohen revealecl thzrt theactual operator behind the deal was Dr Strousbers. Whereas the bankconsortium was out to make a qLrick profit on the deal, Cohen asserted,Strousbers could of fer this higher price because of the synergv that rvould resultfrom incorporatine the railways into his netn'ork of'numerous other holdines.In particular, Strousberg wanted to incor-porate the Brunswick State Rail-ways into his extensive (on paper) railway network in Lolr,er Saxony: the

l9

20 The Journal of Transport History

routes Hannover-Hamelin-Altenbeken, Lohne-Hildesheim-Braunschlr,,eigand Braunschweig-Vienenburg. Finally, on 6 September 1869 Cr-rhen hanclerlover an offer in Strousberg's name of 34.5 million marks down and a 2.7 millionmark annuity for fifty-eight years.

The Brunswick state government, however, rejected this offer because thesolid enterprise of the Brunswick railways would be tacked on to numerousflimsy ones; Strousberg was notorious for his shoddy construction u,ork and thegovernment feared vertical integration with Strousberg's other interests. Thisdanger was real, since from l84B the Brunswick State Railways had obtainednearly all their locomotives from the works of Georg Esestorff in Hannove1-Linden and in 1868 Strousberg bought this Iocomotive works. In addition,Strousberg owned numerous iron ore mines and ironworks in the HarzMountains. Strousberg was at the same time a major client, supplier and, ascontractor of the Hanover-Altenbeken Railway, cornpetitor of the BrunswickRailways. The ducal government saw Strousberg as over-extended. Althoueh hisrailways in East Prussia had by no means prospered (mosr were nor piyirrgdividends), Strousberg was still expanding his empire: he was building thiHalle-Sorau-Guben Railway; he u'as building railwavs in Hanover, Hurigaryand Romania; and he hacl undertaken the renovation of the clocks of Antwerp.3SThe civil servant Christian Zimmerman concluded his report with an analysii ofStrousberg which turned out to be remarkably accurate:

Dr Strousberg is regarded as a rich man; if'he actually is one is impossible t9deternrine. 'fo constantly enter into new urrdertakings is no proof'of actu;l rvealth: itis quite possible that a great entreprenel,rr has clebts more than equal to his fbrttrne.Dr Strousberg is an extraordinary manif'estation. who is already often describecl as aphenornenon; for the Ordinary the laws apply lvhich govern nor"mal m:rnifestationsand whose effects are generally known; the Exlraorclinary is incalculable arrdtherefbre reqr-rires particular caution.3e

Public opinion and the sale

Numerous interests in the duchy protested against the privatisation; during thesummer the socialists and radical democrats held rallies asainst the sale.aOlhegovernment countered these attacks with its own propaganda. The engineerHermann Scheffler, who had opposed privatisation in l866 but now came tosupport it, wrote a pamphlet in defence of the sale. Acknowledging that therewas widespread opposition among the public, mostly among the workingclasses, particularly railway employees, he nevertheless came down in favouron the ground that the railways could be operated more efficiently by the pri-vate sector:

In certain things a private company is able to achieve a greater economy ofexpenditures and labour than the State can. This is a natural consequence of the

The prit

grearbusirformburefinar

This d

cuttingopposiSO AMC

but wilthe bu

Thetion anobjectrpetitiorprodurmanurThe prefiner

The

The tutime ironly dibuy th,eight y

even hto DuGesellsthe Bnleadinlalso m:the Tapoppe(offer a

acceptmilliontherebconsorto raistdown

1

f Transport History

m-Braunschweigi9 Cohen handedanda2.7 million

lffer because theon to numerous.ion work and theer interests. Thisays had obtained'ff in Hannover-rks. In addition,:ks in the Harzsupplier and, as

>f the Brunswickled. Although hiswere not paying,vas building rhernover, Hungary:ks of Antwerp.3sith an analysis of

e is impossible tcr

of actual wealth: itual to his fbrtune.lten described as a

nal manifestationsincalculable and

rtion; during thet the sale.ao Thea. The engineer)ut now came todging that thererg the workingdown in favourently by the pri-

ater economy ofnsequence of the

The priuatisation of the Brunswick State Railways 21

greater freedom and independence with which a private company can organize itsbusiness procedures, whereas the state administration is more bound to abstractforms, to pre-existing arrangements. to conformity with the other brarrches of thebureaucracy, in general to an overall scheme of things which often does not permitfinancially advantageous dispositions.ar

This debate continued in the columns of the Braunschueiger Tageblatt. Thecuttings in the Brunswick state archives leave the general impression thatopposition to the sale was fairly widespread among the populace, although less

so among the upper bourgeoisie of wealth and education; the Diet was scepticalbut willing to be convinced; the Tageblafi neutral but inclined towards the sale;the bureaucracy the most enthusiastic for the sale.a2

The local business community regarded the prospective benefits of competi-tion and private enterprise with fear and lrembling. The Chamber of Commerceobjected because it feared the sale would lead to increased freight charges. Itpetitioned the government to assure special consideration for the followingproducts: grain, milled products, pulse and seeds, coal and coke, sugar, spirits,manure, pig iron, processed iron, rails, cast-iron products, ores and minerals.The products mirror the duchy's industrial mix: sugar-beet farms and sugarrefineries, ironworks and mining in the Harz Mountains.a3

The bidding war reopens

The turmoil of public opinion was Strousberg's natural element, and he lost notime in renewing his offer, bettering it and making it more widely known. Notonly did Strousberg renew, on l9 November 1869, his offer to the Ministry tobuy the railways for 30 million marks down plus a 2'B million annuity for fifty-eight years, he also sent a copy to the Diet's railway commission.aa Strousbergeven had one of his pawns, the Hanoverian civil servant Klenck, appeal directlyto Duke William. Klenck emphasised in his petition that the Disconto-Gesellschaft and the House of Bleichroder had directly competing interests tothe Brunswick State Railways: they had been, as Klenck rightly pointed out, theleading interests behind the plans for the Berlin-Lehrte Railway.a5 Strousbergalso made certain that discussion of his offer appeared in the press. An article inthe Tageblall of 8 December stated that although Strousberg was 'a suddeniypopped-up Croesus . . . whose purchases border on the fabulous', his higheroffer and his promise of unimpeachable security made it advisable that the stateaccept his offer.a6 On 30 December Strousberg increased his offer to a 34-5million mark down payment with an annuity of 2'6 million marks per year,thereby making his offer comparable, and clearly higher, than that of theconsortium led by the Bank ftir Handel und Industrie. In addition, he proposedto raise the capital of the company he would form to 20 per cent higher than thedown payment, or 41.4 million marks. This new offer he also communicated to

-

22 The Journal of Trctnsport Hi.story

the Diet. Finally, on 26 January 1870, he reaffirrned and amended his off'er,whereby the capital of the new company would be only 37'5 rnillion rnarks.l7The ducal government wanted the margirr between the down payment and thecapital of the new railway company to be as narrow as possible, so as to reducethe amount of watered stock.

A far more serious threat to the consortium, since Strousberg was not takenseriously in authoritative circles, was that the BPM and the Berg-Mark Railu'aysnow entered the bidding war, offering a down payment of'33 rnillion marks andan annuity of 2.6 rnillion marks for sixty-four years. -fhe raihtays said ttreywere able to offer so much more because they planned to make their moneyby operating the railways and not from the initial share premium rvhen thecompany was floated on the bourse.ae As Prussian companies they enjoyed thefavour of the Prussian government, and the Berg-Mark Railway had the addedvirtue (in the eyes of Prussian officials) that it was managed by the Prussian state.On 6 .|anuary 1870 Ruclolph von Delbrtick remarked to Frieclrich von Liebe.Brunswick ambassador in Berlin, that he resarded a sale to the Berg-MarkRailw'ay as rnost desirable, even more so than a sale to the BPM. Liebe supposedthat what Delbrtick meant was that upon completion of the bridge over theRhine at Dtisseldorf the Bers-Mark Raihvay would be best situated to competewith the Cologne-Minclen Railway. If it reached an agreernent with the BI'M,the two railways would have their own lines from one end to the other of thatvital route Berlirr-Cologne, and could compete most effectively against theBerlin-Lehrte line, a prospect which correspondecl exactly to Delbrtick's anclMichaelis's ideal of railrvay competition.ae

The railways' re-opening of the bidding war threw .fulius Schwabach,Bleichroder's partner, into a panic when he heard of it. On the evening of 17

January 1870 he rushed to Liebe and dictated a memorandum fbr Liebe toreport back to Braunschweig. He particularly cornplained about the re-emergence of the BPM and the Berg*Mark Railwa,v. The latter was alreadyrepresented by Hansemann; the former appeared to have strong support in theDiet. Last Tuesday in Braunschweig, Schwabach said, the consortium hadattempted to reach an agreement with the railways, with Magdeburg-Halber-stadt being included as well; an interesting addition in view of the closeconnections of the Disconto-Gesellschaft and Bleichroder to Magdeburg-Halberstadt. These negotiations came to nothing. Schwabach fherefore ursedthat the government recommend the Diet to approve the contract with the Bankfrir Handel und Industrie with the following amendments: that the downpayment be increased to 33 million marks; that the share capital of the companyto be formed be no more than 36 million marks; and that 3 million marks of theproceeds of the shares be reserved to provicle the company with workingcapital.5o

On 21 January 1870 the Diet voted, by thirty-three to eleven, exactly along the

l-he prit

lines o

paymglBPM."railwayrailwayHalberterritotHandeSUCCCE(

claimsof therailwalof succ

were aCl.esells

out inNEW CC

Halberbankirthe deof thecontra

The

In Octthe Dthe MCo., tBraunRailwimarksacquir

ThtmanaitookoperaIutterc()mPBerlirlines:weig-

T'ransport History

:nded his ofl'er,million marks.aT)ayment and the, so as to reduce

g was not taken-Mark Railwaysillion marks andilways said theyke their moneynium when thehey enjoyed ther had the addede Prussian state.rich von Liebe,the Berg-MarkLiebe supposedrridge over thetted to competewith the BPN,I,

re other of thately against theDelbrtick's and

us Schwabach,r evening of 17n for Liebe toabout the re-er was alreadysupport in the

)nsortium hadeburg-Halber-,, of the closer Magdeburg-terefore urged, with the Bankrhat the down,f the companyn marks of thewith working

actly along the

The priuatisaLion oJ the Brunswick State Railruals 23

lines of Schwabach's proposal; in favour of privatisation, but with the downpayment increased to 33 million marks. The Diet also favoured a sale to theBPM.51 A month and a half of hard bargaining followed, and the Brunswickrailway privatisation, which had begun as a contest of banks, became a contest ofrailway companies. Two railway groups which competed directly, Magdeburg-Halberstadt/Berlin-Lehrte and the BPM, were fighting for control of the railwayrerritory which lay between them. On 3 February 1870 Parcus of the Bank ftirHandel und Industrie reported to Zimmermann that although they hadsucceeded in getting the Disconto-Gesellschaft and Bleichroder to drop allclaims on behalf of the Magdeburg-Halberstadt Railway Co. (a clear indicationof the extensive power which these banks had to act on behalf of thatrailway), the negotiations with the other two railways still showed little prospectof success.52 Agree-ent was finally reached on 5 March. Schwabach's proposalswere all adopted. The BPM, the Berg-Mark Railway and the Berliner Handels-Gesellschaft were brought into the consortium. Strousberg, of course, was leftout in the cold. The consortium also agreed to sell a controlling interest in thenew company to the two railway companies. This, and the fact that Magdeburg-Halberstadt was not brought into the consortium, highlighted the defeat of thebanking consortium in its attempt to gain control of the Brunswick Railways, andthe defeat of'the ducal government's attempl to keep control and managementof the railways within the duchy. The duchy and the new consortium agreed a

contract to sell the railways on 8 March 1870.5'3

The Brunswick Railway Company

In October 1870 a consortium made up of the Bank ftir Handel und Industrie,the Disconto-Gesellschaft, the Berliner Handels-Gesellschaft, S. Bleichroder,the Mitteldeutsche Creditbank, Theodcir von Clramer-Klett, J. L. Eltzbacher &Co., the private banks Gebr. Lobbecke and Lehmann Oppenheirner (both ofBraunschweig), and the Berlin Potsdam & Magdeburg and the Berg-MarkRailways formed the Brunswick Railway Co. It was capitalised at 36 millionmarks; of this the two railways each took 12 million marks; in 1872, theyacquired the outstanding 12 million, so they had all the shares.

The railways were operated for the benefit of the company, although actuallymanaged by the state, from l January 1869; from I January 1871 the companytook over the actual management of the railways, which had 273'8 km inoperation plus Seesen-Gittelde-Prussian border and Braunschweig-Konigs-lutter-Helmstedt under construction. From the start the company faced severe

comperirion from the Magdeburg-Halberstadt Railway, especially from the lineBerlin-Lehrte (opened 1871). The Brunswick Railway Co. responded with twoiines: Seesen-Gittelde-Prussian border (15'5 km, opened 1871), and Braunsch-weig-Konigslutter-Helmstedt (42 km, opened 1872), whictr shortened the link

24 The Journal of TransPort History

to Berlin via the BPM. The company built the lines Neuekrug-Langelsheim and

Langelshei.rr_Gorta. i;P.";g ,l nlZl ro serve the Harz mining districts. A

further line, Langelsh"i-_Gosla.-Grauhof, opened^in -1882.

Finally, a small

branch from Einbeck to Sal'derhelden opened ^1]?7j;

With these new lines the

Brunswick Railway co. reached a rotal le'ngth of 356'5 km, compared with 273'8

km in operation o., ilur,rury 1871; an inc?ease of 30 per cent'54 The cornpany's

dividencl record, "t ;;;Jntage of equity capital' *ut aS shown in table 2'

Table 2. Diuid.ends of the BrurcuickRaitway Co'' 1869-8)

Year

18691870187 It8721873

5.526.671.5

3.00

t87418751876r877I 878

02.02-52.16r.7

1879I 880l88lI 8821883

2.31.670.830.83t.4

'fhe Prru,

the lackThe res

1'1 millthe con

1873, (

ThecontrolRailwaBrunstmateriand c

revenlWrisbtechnisupertwo riworthcomPBrunRailvtheirlengtrailr,ltheYRail'origraihButtheithis

C

no!Rai

Jotbolopres

sure'18

atRr

Auerage: 1869-83 : 2'54 Per cen! ^-Sources.Saling'sBdrsenpapiereforl886-87'p'765;Y.uytt:GeschichteundGeographiederDeutschen Eisenbahnen,i.'za7 .Where th" ,o.,'r... conflict, the figtrre has been taken from

ffi;;, except for 1869, where Saling supplies no frgure'

Gross revenues rose until 1871 but sank after that because of the competing

lines, in particular g..ri.r-L.rtrte. This was Part of a general decline in profits

for Germa, ,uit*rfr i"it't ytutt t872-74' ui-t*pt"ts' especially for coal' iron

and labour, rose more quickly than revenues'55 Th. B',,'*ick Railway Co. still

produceda6_7p.,..,'.returnonthephysicalcapitalinvested,butsincetherailway corrrpan/ *u, .upitulised at u nigi". figure than the actual capital

invested the real return wis 4 per cent. As, however, most of this return went to

;;y;h. 2.62 millior, -u.t ar,.r.,ity, the dividends usually fell below 4 per cent,

and in l8T3 and r gia ,h".. *... .ro dividends at all' One of the reasons for the

bad performance in lB73-7awas high operatingexpenses - 65'6 per cent in

lg73 and 60 per...rt in 1874-whicf, p.oUuUty t-"fltitt the extraordinarily high

;;g;", iron an^d .rui p'itt' 'l.'h: peak of the boom rather than incompetent

;;"";;.-.nt.u6 rtre [.,,"t*ltrt Raitway 99' ul:" locked itself into long-term

supply contracrs ar the wrong time. In 1873 the crash hit the iron industry'

ravaging the miningurra .-.Tring industries of the Harz Mountains; one iron

ore mining co*pl&, the Harzei Union' went bankrupt in lBJg The-' iron

industrywasamajorcustomeroftheBrunswickRailwayCo.,whichStoodfirmlyin the protectionist, CamP: in its annual report fclr 1874, management ascribed

ansport Hi.story

rgelsheini andg districts. Anally, a smallnew lines the

ed with 273'8he cornpany'sn in table 2.

The priuatisation of the Brunswick State Railways 25

the lack of business confidence to the impending abolition of the pig-iron tariff.The result was a rapid drop in profits, which fell from an already unsatisfactory1.1 million marks in 1872 (barely enough to pay a 3 per cent dividend, althoughthe company's statute envisaged a 4 per cent minimum) to 265,406 marks in1873, oi a drop of 75 per cent.57

The railway needed a capital infusion from the two railway companies thatcontrolled it. In October lB73 Count Gortz-Wrisberg, Chairman of the DucalRailway Commission, reviewed the troubled situation of the railways. TheBrunswick Railway Co. had been caught between increasing expenditures formaterials and excessive costs in building the new extensions, on the one hand;and competition, especially from the Berlin-Lehrte Railway, cutting intorevenues, on the other. In addition to these fundamental problems, Cortz-Wrisberg also discovered that the Brunswick Railway Co. was guilty of severaltechnical legal violations, relating to the minimum shareholding required ofsupervisory board members. All these problems could have been solved if thetwo railways had agreed to alienate some of their shares; only 108,000 marks'worth of a total of 36 million was required to comply with the law. Thecompanies resisted, fearing a diminution of their control. So long as theBrunswick Railway Co. had been doing well the BPM dnd the Berg-MarkRailway Co. had no reason to complain, and most important of all, neither didtheir supervisory boards; they were willing to operate the company at arm'slength. Once dividends began to fall, however, the supervisory boards of the tworailways were willing to infuse more capital only in exchange for more control:they wanted six apiece of the eighteen supervisory board posts of the BrunswickRailway Co. Gortz-Wrisberg remarked that this alteration would violate theoriginal principles which lay behind the privatisation: namely, to keep therailway independent and to retain as much control as possible within the duchy.But the participation of the two railways in the privatisation in the first place andtheir subsequent purchase of all the shares outstanding had already underminedthis principle.5s

Gortz-Wrisberg and the railways reached agreement in March 1874. Eventsnow took an unexpected turn: citing the radical change which the BrunswickRailways were about to undergo, namely the shift of authority out of the duchy,

Johannes Miquel and Julius Schwabach resigned their seats on the supervisorvboard. In this they were joined by the two local bankers Lobbecke ancl

Oppenheimer.ue As partners of the Disconto-Gesellschaft and S. Bleichroderrespectively, Miquel and Schwabach represented more than their banks on thesupervisory board of the Brunswick Railway Co.; they were also shadowrepresentatives for the Magdeburg-Halberstadt Railway Co. In the periodl87O-74 the competing lines BPM/Berg-Mark and Magdeburg-Halberstadtattempted to find a modus uiuendi in the neutral councils of the BrunswickRailway Co. The wide-ranging proposals of 1873-74 of the BPM and Berg-

2.3r.670.830'831.4

Geografthie deren taken from

re competlngne in profitsbr coal, ironlway Co. still>ut since thectual capitalturn went tor 4 per cent,Lsons for the, per cent inlinarily highncompetentD long-termtn industry,rs; one iron). The ironrtood firmly:nt ascribecl

26 T-he J ournal of T'ransport HisLory

Mark Railway would drag the Brunswick Railway Co. into their camp and forge

a competing monolithic route between Berlin and Cologne. Magdeburg-Halberitadt could no longer seek a cornpromise: the--only answer was war'

Miquel and Schwabach hid no choice but to resign.oo

To help put the company back on its feet again, the Brunswick Railway Co'

issued 9.6 million marks of 4.5 per cent senior bonds, returning to the company

9.15'million marks, or a price of slightly more than 95 per cent; the dur:al

government took 3 million marks of this, the rest went to the railway companies.

in 188 I the Brunswick Railway Co. issued 3'4 million marks of 4 per cent bonds.

When the railway was taken over by Prussia, the company was capitalised with 36

rnillion marks of' ordinary shares, l3 million marks of senior boncls, plus an

annuity capitalised 'at 50'2 million marks, a total of 99'2 million marks, or

278,226 marks per kilometre.Subsequent annual reports of the company printed its results beside those of

the othei two railway companies, a clear indication of its subsidiary status. Theclividend payment never again scaled the heights of 1869-71. Railway scandals

following the collapse of Strousberg in 1871 and poor financial perlormanceafter 1872 led to a revulsion against private railways. -fhe individual Cerrnan

srates began to take over the railways. Prussia acquired the Berlin Potsdam &

Magdeburg Railrvay Co. in 1879 and the Berg-Mark Railway Co. in 1882, and so

haJvirtually the entire share capital of the Brunswick Railway Co. Under the law

of 23 February lBB5, Prussia took over operation of the Brunswick Railu'ays as

from l.|anuary 1884.'fhe actual operation passed to the Pnrssiatt state railways

on I April 1885.6r

Conclusion

In Germany, 1860*73 was the heyday of laissez-faire. Privatisation formed part of'

this movement. In some cases, such as the Konigshtitte and the Braunsch-

weigische Kohlen-Bergwerke, privatisation was an outstanding success. -fhe

Brunswick Railu,ays showed more mixed results, but this was due to high

gearine, fierce competition and unfavourable economic conditions, rather than

irr.o-p.t"nt private management. The contest over the Brunswick State

Railwzrys not only lays bare the rivalries between the various banking groups butalso strows the power and independence of the railway compzrnies. The state

take-over of ttt-ese giant companies removed a major financial power and

strengthened the relative position of the banks, which hencefbrth were the most

heavily capitalised (]erman companies.

Notes

I I am using the English forms (Brunsu,ick, province; the German lbrms (Braunsctrweig, Hann-

Hanover) to ..-[tr to the duchy, kingclom and over) to refer to the cities.

The prruattsa

2 W. Dlbritrheinisch-westflzur Geschithte d

V ereines deutsr'ht

I ahrbuch dcr Ber-hurh

Jiir Banhit3 M. Kitche

1815-1911 (r9onlv NttrembtSombart, Die d,

und im Anlangpp. 2:18-47. d

((,lllpanY b\ r4 C). von M

der ersten de

bahrnt'esen (Be

f)tnid Han^sem'

5 A. Bergetder Hetdt (Lei

6 G. Scheireisenbahnen (S

7 R. Charnl9I6), PP.1Vlana (New

8 MthlenfW. M. Wunc(Ciremlingen,

9 A. vondeutsthen Eis

(Berlin, 1891

l0 /bid.' PItrrtg des Ba

Nlittc dcs lll(;i)ttilrgen' r

p63I I MaYer12 R. Fre

.schaftsuaclxtt137. 145.

13 Betrieb

Eistnbahnen

PP. 35, 68;14 clf. J.

Victoria.n Ci

railwaYs orGlasgow an

15(). I(Oldenburgsthueig 196

16 Wun<17F. P

I872), P. Il8 Blun

Pditih. P. !' 19 Denl'Abwehr d

gegen die13 March l

Amtes, BoEisenbahneEisenbahn'

osport History

tp and forgevlagdeburg-er was war.

Railway Co.he companyt; the ducal'companies.cent bonds.ised with 36rds, plus anl marks, or

ide those ofstatus. Theray scandalserformancetal GermanPotsdam &882, and sorder the lawRailways as

ate railways

ned part ofBraunsch-ccess. There to high'ather thanwick Stategroups butThe state

tower and'e the most

hweig, Hann-

'lhe prhtatisation of the Brunswick State Railway

2 W. Diibritz, 'Entstehung und Aufbau desrheinisch-westfiilischen Industriebezirks', Beitrdgezur Geschichte tler Technih und Industrie. lahrbur'h des

Vereines deutscher Ingenieure, XV (Berlin, 1925), p. 72;

Jahrbuch dtr BerLiner Bijrse 191111915. Ein Nachschktgt-buth filr Bankiers und Kapitalisten (Berlin, I91t1).

3 M. Kitchen, T'he PoliticaL Economl of Germanl1815-1911 (1978), pp. 46-56, for example, mentionsonly Nuremberg-Fiirth and Leipzig Dresden; W.Sombart, Die deutsche Volhsutirtschaft im 19. Jahrhunderlund im AnJttng des 20..f ahrhundarts (Darmstadt, 1954),pp. 238-47, does not mention any private railwaycompany by narne at all.

4 O. von Miihlenfels, 'Die Entstehungsgeschichteder ersten deutschen St.aatsbahn', Archir Jiir Eisen-bahnuesen (Berlin, 1889), p. 42n; A. Bergengriin,Daaid Hatxemann (Berlin, 1901), pp. 144, 167.

5 A. Bergengrir, Staatsminister AugLSt Freiherr xonder Hellt {Leipzig. lg0tir. pp. 167-92.

6 G. Scheirrgriiber, Die Kdniglich Bayri-schen Staats-

eisenbahnen (Stuttgart, 1975), p. 7.

7 R. Charmatz, Minister Freiherr uon Bru.ch (Leipzig,I916), pp. 117-19; C. E. Schorske, Firt-dc-siicleVianna (New York, 1980), p. 128.

8 Mtlhlenfels,'Entstehungsgeschichte', p 60;W. M. Wunderlich. Die erste tleut.st:lrc Staatsei-senbnhn

(Cremlingen, l9B7), pp. 23-6.9 A. von Mayer, ()evhichte und ()eographie der

deulschen Eisenbahnen bi.s auf die Gegenuart 1890(Berlin, 189I), pp. 277 Bl.

l0 lbid., pp. 282-3; R. N{ittendofi, 'Die Entwick-lung des Bankverkehrs in Bt-aunschweig von derNIitte des ltl. Jahrhunderts bis lB66', Universitv ofGottingen, rechts- und Staatsrviss, Dr Diss., 1920,p. 63

ll Mayer, Deutsch,e Eisenbnhnen, p.287.12 R. Fremdling, Etsenbahnen und deutsches Wirt.

schaftsutachstum 1840-1879 (Dortmund, 1975), pp.137, 145.

l3 B etiebsresultate der H erzoglich B raunschweigtschen

Eisenbahnen xorn Jalre 1865 (Braunschweig, 1866)'pp. 35, 68; 1866, pp. 36,74; 1867, pp. 36, 7a.

14 Cf. J. R. Kellett, The Impact of Railuays on

Victoian Cities (1969), which studies the effect ofrailways on Birmingham, Manchester, Liverpool,Glasgow and London.

l5 O. Blum, Das Ei:enbalmnetz Niedersach.sens(Oldenburg, 1933), pp. 54,15; Hauptbahnhof Braun-schweig 1960 (Braunschweig, I960).

16 .Wunderlich, Staatseisenbahn, p. 31.l7 F. Perrot, Deutsche Ekenbahnpolitih (Berlin.

1872), p. 23; Blum, Eisenbahnnetz, p. 7Bn.l8 Blum, Eisenbtthnnetz, p. 78n; Perrot, Eisenbahn-

politth, p. 58; Fremdling, Ekenbahnen.l9 Denkschrift des Handelsministeriums zttr

Abwehr der Angriff'e des Abgeordneten Laskergegen die Eisenbahnverwaltung', Spenersche Zeitung,13 March 1873, in Politisches Archiv des AuswirtigenAmtes, Bonn, [AAa. 17 adh. secreta.; Mayer, Deutsche

Eisenbahnen, pp. 397-8; K. Wiedenfeld, Deutsche

Ekenbahn-Gestalter (Berlin, 1940), pp. 24, 39.

20 H.-J. Querfurth, 'Wirtschafts- und Verkehrs-geschichte', in R. N{oderhack (ed.), BrauuchueigrscheLandesgeschichte im iiberblick (Braunschweig, l97g),P. 83.

2l O. Glagau, Der Biirsen- und Griindungs-Schuindelin Deutschland (Leipzig, 1877), pp. 97-9.

22 Mayer, Deutsche Eisenbahnen, pp. 69 82.23 F. Stern, Gol.d and lron (New York, 1977), pp.

38 9, 69, 74, 76-7.24 Stern, Gold and lron, p. 85; H. Fiirstenberg, Carl

Fiirstenberg : Die Lebensgeschichte eines deutschen Banhiers(Berlin, l93l), pp. 49 50; H. Mtinch, Adolph uonHaruernann (Munich, I932), pp. 116-19.

25 Niedersiichsisches Staatsarchiv in Wolfenbtittel(henceforth Nds StA Wolf.), 23 Neu, Fb. 1, Nr. 1343,fos 1-5; Berliner Borsen-Zeitung, 23 August and 22September 1866, in Nds StA Wolf., l2A Neu, Fb. 7a,Nr. 368I; Das Bergtsch-Mtirhisclrc EienbahrUnternehnten in seiner Entuichlung utihrerul, der er.sten 25. JtLhred,es Betriebes (Elberfeld, 1875), p. 233.

26 O. Stillich, Eken- und Stahl-Industne (Berlin,1904), pp. 200 26.

27 Nds StA Wol{., 23 Neu, Fb. I, Nr. 1343, fos I5. 8 r1.

28 A. Kriiger, Das Ki)lner Ba.nkiergeuerbe uom Endedes 18. Jahrlnrnderts bk -1875 (Essen, 1925), p. ti5.

29 BKB 187) 197) (lJelmstedt, 1973), p. 28.30 W. Siebenbrot, Die Braunsclruteigische Staatseisert

bnhz (Braunschweig, i93B), p. 99.3l Historisches Archiv der Stadt Koln, Bestand

1073 (NachlaB Mevissen). Nr. 102a.32 Nds StA Wolf., I2A Neu, Fb. 7a, Nr. 3669;

Siebenbrot, Staaheisenbuhn, p. 103.33 Nds StA Wolf'., l2A Neu, Fb. 7a, Nr. 3669, ancl

23 Neu, Fb. 1, Nr. 1343, fo. 39 NationaL-Zeitung, 19

August ltl69; Aktiontir, 21 November 11J69.

34 J. Biensleldt, Freilrcrr Dr. T'h. uon Cram.cr-Klett(Leipzig, 1923).

35 Srern, (iold and lron.36 Kriiger, Kblner Bankiergeuerbe, pp. 84-7.37 Nds StA Wolf., I2A Neu, Fb. 7a, Nr. 3669.38 On Strousberg see G. Reitbock, 'Der Eisen-

bahnkonig Strousberg und seine Bedeutung frir dasEuropiiische Wirtschaftsleben', B eitrrige zur Geschichteder Technih und Indrctrie, XIV (Berlin, l92a), pp. 65-84; M. Ohlsen, Der Euenbahnkdnig Bethel Henry Strous-berg: Eine preupische Griinderhariere (East Berlin,l 987).

39 Nds StA Wolf.,23 Neu, Fb. 1, Nr. 1343, fost50-7.

40 Georg Eckert, 'Der Arbeitertag in Bad Harz-burg und der Kampf gegen die Privatisierung derBraunschweiger Staatsbahn', Archir ftir Sozialge-schithte, III (Hannover, 1963), pp. 465-95.

4l H. Scheffler, }be, den Veihauf der Braursch-weigischen Eienbahnen (Braunschweig, 1869), pp. 5,28. 33-4. Nds SrA Woll.. l2A Neu, Fb. 7a, N r. 364 l.

42 Braurcchweiger Tageblatt, 4 June, 25 September,26 October, I December, 8 December, l6 December,21 December 1869, Nds StA Wolf., l2A Neu, Fb. 7a,Nr.3681.

27

28

43 Nds StA Wolf., l2A Neu, Fb. 7a, Nr' 3595'

44 Nds StA Wolf., 23 Neu, Fb. I, Nr' 1343, fos

129-3 l.45 Nds StA Wolf., I2A Neu, Fb. 7a, Nr' 3641'

46 Braumchueiger Tageblatt, 8 December 1869;

Nrls StA Wolf., i2A Neu, Fb. 7a, Nr. 364I.47 Nds StA Wolf., I2A Neu, Fb' 7a, Nr' 3669 and

23 Neu, Fb. I, Nr. 1343, fos 252-8'48 Nds StA Wolf., l2A Neu, Fb. 7a, Nr' 3669 and

23 Neu, Fb. I, Nr. l3rt3, fos 216-bl'49 Nds StA Wolf., l2A Neu, Fb. 7a, Nr' 3634;

Bergisch-Mtirkische Eisenbahn, pP. 26, 30, 274'

50 lbid.5l Eckerr. 'Arbeitertag. P. 173

52 Nds SrA Wolf., l2A Neu. Fb. 7a. Nr' 3595'

The J ournal of TransPort Histotl

53 Nds StA Wolf.,23 Neu, Fb. l, Nr' 1343, fos

356-U8.54 Mayer, Deutsche Eisenbahnen, pp' -284-6;

Nds

StA Wof., 23 Neu, Fb. I' Nr. 13'13, fos 461-7'55 Der Ahtirncir, 17 November 1872; Fremdling,

Eisenbahnen, pp. 141-3.56 Nds StA wolf., 12A Neu, Fb. 7a, Nr. 3626 and

3633; Mayer, Deutsche Eisenbahnen, pp' 286-7'57 Nds StA Wolf., 87 Neu, Nr. 28'58 Ncls StA Wolf., l2A Neu, Fb. 7a, Nr' 3626 and

3633.59 lhid.. and 87 Neu, Nr. 28.

60 Mayer, Deutsche Eisenbahnen, pp. 28F76l Nd; StA Wolf., 87 Neu, Nr. 28; Mayer, Deutsche

Eisenbahnen, p. 287.

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