Under the plan adopted 33 different corn panics were chartered, contemplating about 2,500 miles of line. Building went on rapidly until the Revolution of 1848, and then again after the accession of Napoleon III in 1851. The lines have from the beginning been laid down with the idea of avoiding all duplication and all waste of capital; they were surveyed and traced by government engineers, and each part stood in its proper and intelligent relation to the whole. Parallel lines were forbidden as a matter of course, and competition was pot conceived of as among the possibilities of the situation. By 1852 the number of independent systems had been reduced from 33 to 11, and in 1859 the 11 were reduced to six, of which five radiated from Paris. Each had a monopoly in its own terri tory. Competition running riot, the construc tion of needless lines as a mere speculation in the securities, rate wars, with their attendant iniquities, and the consequent wanton waste of money and effort in construction and operation are essentially unthinkable to a French railway engineer or official New construction is under taken only as required, and to meet the neces sities for more lines growing out of the devel opment of any particular territory. About 1859 it became obvious that a considerable amount of new construction was necessary in order to bring the railway system up to a proper stand ard of utility and efficiency, and in order to secure this construction, each of the six com panies, and each in its own district, undertook to construct a large number of branch lines.
The government took the initiative, and in order to facilitate this new work and to secure it promptly recours6 was had to a system of state guarantees of interest on the bonds upon which the money for the new construction was to be raised. This was the plan devised by De Franqueville. Money was, of course, easily raised by issues of bonds upon which the gov ernment guaranteed 4 per cent, this guarantee making the securities instantly marketable and extremely valuable. There was, accordingly, no wasteful financiering, no iniquitous jobs, no lack of funds, no foreclosures, no reorganizations, receiverships or squeezing of investors. In 1865 a further plan was proposed in the Chamber for the construction of a network of local roads not to belong to the six companies, and the munici pal authorities were given the right to subsidize such lines. Pursuant to this plan, several thou sand miles of these local lines were built throughout the country within the next five years. It was not, however, contemplated that they should be combined into systems which might interfere in any way with the monopoly of the six companies. They were designed to be feeders. However, after the war of 1871, the prohibition to combine was successfully evaded, and these local lines by a series of combinations began to be serious competitors in many places to the main systems. This made it necessary for the government to take the mat ter again in hand, and the problem was ulti mately solved by having the great companies take over the local lines within their territories severally, upon terms. In 1879, by a decree of July of that year in the Chamber of Deputies, De Freycinet undertook to raise a loan of 3,000,000,000 francs for the construction of about 10,000 miles of additional line. This plan has been slowly carried out since that time. There was at first some delay, but by the beginning of 1884 this last comprehensive scheme of railway development was settled upon, the leading points of which were these: first, that the state here after should confine its own railway operations to the small district in the southwest occupied by what is known as the state line; that isolated lines which the state owned in various parts of the country should be taken over by the one of the six great companies in whose territory it lay; second, that additional lines as needed should in future be constructed only by the companies in whose district they belong; third, that the state should guarantee each company a minimum dividend, and that when the amount available for dividends exceeded a certain per centage — the rate differing for each line — two thirds of the excess should go to the state. The limit, however, was placed so high that this provision has been practically inoperative. Thus, for example, on the Northern line, the guarantee minimum dividend its 13.5 per cent, while the poiht beyond which the state shares the excess is 22.1 per cent. In the case of the Paris, Lyons and Mediterranean, the guarantee minimum is 11 per cent, the state sharing in anything beyond 15 per cent, and so on, with slightly lower percentages for the other com panies.
All of the lines in France except the old state line in the southwest and the western line taken over by the state a few years ago to placate the Socialists, are owned and operated by private companies. They are concidis and become state property upon the expiration of the concessions. Meantime they are subject to a strict governmental super vision and control. The length open for traffic by the latest figures obtainable (1911) was 25,194 miles, which fully meets all the require ments of the country. Of this total mileage 5,559 miles are state railways. The original scheme was for the government to contribute about 250,000 francs per mile; and private enterprise to find about 200,000 francs per mile, thus dividing the expense and the ownership. The concessions generally were to fall in, first in about 40 and later on in 99 years. When this occurs — about the middle of the present century— the government will, it is claimed, become possessed of an asset in the shape of railway property sufficient in realizable value to pay off in full the national debt. In 1892 the French railways were conservatively valued at 16,000,000,000 francs. The original plans of construction and joint ownership were some what modified as time ran on. In the con struction of the French lines there has been less waste of capital and better results for cap ital than elsewhere in the world. French rail ways have cost less and come to more than any others on earth. It need not be argued that the French scheme put in practice would inevitably reduce the cost of construction to a minimum and would secure the best results for the least money. Passing by the matter of the state guarantee of interest and dividends, it may be said that the net earnings of the five private companies have been upon an average far be yond anything accomplished elsewhere in the world in that respect from railway operation. Furthermore, in face of the strong position of the French railways as monopolies, the govern ment notwithstanding exercises a sufficient con trol — one which is in many respects admirable and reasonable. The French plan, as is seen, forces the numerous independent companies to work in harmony with one another, while giving each of them an absolute monopoly in their own territory. It renders, therefore, the process of consolidation within that territory easy and inevitable. Whatever slight attempts have been made in the Chamber to check or prevent com bination or monopoly have been •promptly over ruled as contrary to the general scheme. This was particularly the case in 1875, when Phillip part, a Belgium capitalist, undertook to consoli date the local lines as against the six com panies; and even the state itself in the operation of its own lines in the southwest has never succeeded in breaking into the monopoly of the Orleans Company in that territory. While France prohibits effectively competition between her railway lines, she is constantly spending large sums in improving internal water com munication; and private carriers using these waterways without paying any 'toll carry off more or less traffic from the railways, and are allowed to do so. To make a summary state ment, we find the facts to be that in France the railway system was intelligently planned as a unit from the outset; that the lines were laid down by competent government engineers and constructed without paralleling; that in con sequence very little money was wasted in con struction; that competition did not enter into the scheme as originally devised, and that when it arose— notably through the consolidations of the network of local lines built between 1865 and 1870— it was suppressed by the govern ment; that railway investments have been al most uniformly profitable, and upon the whole much more profitable than in other countries; that freight rates are not excessive and that passenger rates are very low; that the public is well served, the passenger service especially being of the very best; that governmental regulation is not hampered or thwarted by the strength of the railways as monopolies; that no mischief and much good seems to have come from the elimination of competition between lines, and that upon the whole the French scheme secures a maximum of adequate, efficient and satisfactory service at a minimum of cost and friction.