The Right of Federal Supervision. 
83 
trains; but ties rot, rails rust, axles run dry, grades are washed 
away whether much or little business is done. A great invest¬ 
ment AND A RELATIVELY LARGE WORKING FORCE IS NECESSARY FOR 
even A minimum of business. In fact, from seventy to seventy- 
five per cent, of the expenses are constant 18 and independept of 
the volume of the traffic; so that any possible economy during 
business depressions can effect only about twenty-five per cent., 
or the variable factor in the expenses. It is along these lines 
that the statement can be maintained that a railroad is not like 
an ordinary business. And this once established, railroad legis¬ 
lation (e. g., on the question of pooling) must set up for itself 
tasks very different from those encountered by legislation on 
soap factories. 
The Germans 19 early discovered and acted upon the premise 
that a railroad is different from an ordinary business. They 
soon recognized the limitations of the laissez faire doctrine when 
applied to railroads. The fundamental railroad law of Prussia 
is the law of November 3, 1838, which in all its essentials is the 
law of to-day. It grew out of the discussions and negotiations 
on the first applications for concessions, especially out of the 
careful investigations and statesmanlike considerations preceding 
the granting of the Magdeburg-Leipzig charter, which in turn 
was based upon “ Grundbedingungen der Erlaubniss zu offentlichen 
Eisenbahnen durch Privatunternehmungen.” By this law 20 the 
state, acting through the Minister of Public Works, has the right, 
after the expiration of three years from the first of January next 
following the opening of the road, to supervise, approve or dis¬ 
approve (1) all tariff schedules, (2) any proposed change in exist¬ 
ing rates, and (3) the establishment of tariff instructions and 
regulations, exceptional and differential rates. However, the 
three-year limit is practically void because of the reservations 
which the state makes in granting concessions. 21 These regula- 
18 Consult Ranh , Eisenbahnstarifwesen, Wien, 1895. 
19 Stephenson, the father of the locomotive, is credited with the state¬ 
ment, “Where combination is possible competition is impossible.” 
20 §§36-40. 
21 Consult § § 1 and 46 of the law of 1838 ; circular letters of July 30, 
1874, and May 2, 1887; Erlass des Ministers der Offentlichen Arbeiten 
of March 2,1895. 
