Special Report: Forming Networks in SwitzerlandBy André Kirchhofer, Jonas Steinmann
In the course of the 20th century the Swiss railway industry, which has to be considered an anomaly because of its division into a state sector and a so-called “private” one, got into financial difficulties, as did the railways in other countries. Almost all enterprises constantly operated at a loss and experienced low profitability as soon as they were deprived of their hitherto existing transportation monopoly by the upcoming motor carrier. But unlike other European countries, Switzerland has so far renounced to dismantle its railway system to a large extent. Even in the remote areas where freight and passenger traffic has become less profitable – and often very much so – over the decades, the network is still maintained in these days as it was built up in the 19th and the early 20th century.
Given the fact that fully private incorporations would have filed for bankruptcy on the same conditions, the paper focuses on the question of how Swiss railway policy dealt with the financial constraints of the private rail industry and, above all, why it did so. In answer to that, it has to be pointed out that the state constantly provided generous funding, which was due to the strong conviction that railway companies were absolutely indispensable to the equilibrated economic development of the whole national economy including the mountainous regions. On the other hand, the companies themselves did not always rely on these public grants (for which they were blamed by some scholars of economics), but tried for example to reform their tariff systems – with the disappointing result that they were deterred from doing so by some trade associations.