The treaties of 1869 and 1871 and the subsidies

The Bern conference and the convention of 15 October 1869

The decisive negotiations took place in Bern in September and October 1869. Representatives of Switzerland, Italy, the North German Confederation, Baden and Württemberg met at a conference chaired by the President of the Confederation, Emil Welti.¹ On 15 October 1869 Switzerland and Italy signed a convention on the construction and operation of a railway over the St Gotthard. The North German Confederation and the southern German states had taken part in the negotiations but did not sign. Germany acceded to the convention only after the foundation of the German Empire, by the agreement of 28 October 1871. The convention fixed the cost of the enterprise at CHF 187 million and its financing at CHF 85 million of state subsidies and CHF 102 million of capital to be raised by the company on the market.² Of the subsidies, Italy undertook to pay CHF 45 million and Switzerland CHF 20 million, while CHF 20 million were expected from the German states.³

The convention was an unusual instrument. Its parties were states, but its object was a railway that a private company would build and operate under Swiss concessions. The states paid their subsidies to the company in return for obligations that the company assumed towards them through its Swiss concessions and the supervision of the Confederation. The convention therefore combined three layers of law: international law between the contracting states, Swiss federal law on the supervision of railways, and the private law of the concessions and of the company's articles. The Swiss contribution of CHF 20 million was itself a composite. The cantons, the municipalities and the two great railway companies, the NOB and the SCB, pledged it in individual amounts, which the Gotthard committee collected. The federal budget itself contributed nothing until 1878. The Canton of Zug, for instance, promised CHF 250,000 on 13 May 1870 as part of the Swiss subsidy, on the condition that the enterprise was secured as a whole and that the line from Zug to Goldau was built.⁴

The network, the technical standards and the time limits

The convention defined the network that the subsidies were to finance. It comprised the lines Lucerne–Küssnacht–Immensee–Goldau, Zug–St Adrian–Goldau, Goldau– Flüelen–Biasca–Bellinzona, Bellinzona–Lugano–Chiasso and Bellinzona–Magadino– Italian border towards Luino, with a branch to Locarno. Its total length was about 263 kilometres.⁵ The convention also set technical standards that bound the company. The highest point of the line was not to exceed 1,162.5 metres above sea level, the minimum radius of curves was 300 metres and the maximum gradient 25 per mille, with 26 per mille allowed between Biasca and Lavorgo. These parameters determined the cost of the mountain sections. A summit tunnel at about 1,150 metres implied a tunnel of about 15 kilometres between Göschenen and Airolo and long ramps with spiral tunnels in the Reuss valley and the Leventina.

The time limits were precise. The lines in the Ticino plain, from Biasca to Locarno and from Lugano to Chiasso, were to be completed within three years, the other open lines within four and a half years and the great tunnel within nine years. The early completion of the valley lines in Ticino was a political concession to the canton, which wanted to see trains before the tunnel was finished. It also gave the company revenue during construction. The convention also obliged the company to run at least three passenger trains a day in each direction in summer and fixed maximum tariffs for passengers and goods: 50, 35 and 25 centimes per Swiss league (lieue suisse) for the three passenger classes, 14½ centimes per tonne-kilometre for ordinary goods and 5 centimes per tonne-kilometre for raw materials in full wagon loads. These tariff provisions gave the subsidizing states an interest in the commercial policy of the line that outlived the subsidies themselves.⁶

Notes

1. H. Etter, "Vom Bau der Gotthardbahn und den Männern, die dabei waren" (as above), for the conference under Federal President Welti with representatives of Switzerland, Italy, the North German Confederation, Baden and Württemberg; Verkehrshaus der Schweiz, entry "Gotthard-Vereinigung" (as above), for the conferences in Bern in September and October 1869. ↩
2. Swissvotes, short description of the vote of 19 January 1879 (vote no. 20), https://swissvotes.ch/vote/20.00/kurzbeschreibung-de.pdf, for the original estimate of CHF 187 million; Meister, Geschichte des Gotthard-Komitees (as above), for CHF 102 million from the capital market; Agreement of 28 October 1871 (as above), Art. 1, for the German accession. ↩
3. Federal Court, judgment no. 123 of 1 November 1889, Canton of Zug v. Gotthardbahn-Gesellschaft, https://www.servat.unibe.ch/dfr/pdf/c1015896.pdf, referring to the "Subvention von 20 Millionen Franken" that Switzerland undertook under the treaty with Italy of 15 October 1869; H. Etter (as above), for the shares of Italy (45), the German states (20) and Switzerland (20). ↩
4. Federal Court, judgment of 1 November 1889 (as above), for Zug's pledge of CHF 250,000 of 13 May 1870 and its conditions. ↩
5. Agreement between Germany, Italy and Switzerland of 28 October 1871 on the construction and subsidization of a railway over the St Gotthard, Reichsgesetzblatt 1871, no. 44, 376–389, reproducing the convention of 15 October 1869, Art. 1, in the edition of Wikisource, https://de.wikisource.org/wiki/%C3%9Cbereinkunft_zwischen_Deutschland,_Italien_und_der _Schweiz_wegen_Herstellung_und_Subventionierung_einer_Eisenbahn_ %C3%BCber_den_St._Gotthard; Art. 2 (technical standards) and Art. 3 (time limits). ↩
6. Convention of 15 October 1869, Art. 7 (minimum service) and Art. 8 (maximum tariffs), as reproduced with the agreement of 28 October 1871, Wikisource, https://de.wikisource.org/wiki/%C3%9Cbereinkunft_zwischen_Deutschland,_Italien_und_der _Schweiz_wegen_Herstellung_und_Subventionierung_einer_Eisenbahn_ %C3%BCber_den_St._Gotthard: "50 centimes par lieue suisse" (first class), "35 centimes" (second), "25 centimes" (third); "5 centimes par tonne et par kilomètre" for raw materials in full wagon loads; "14½ centimes par tonne et par kilomètre" for general goods on ordinary sections. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.