From private railways to the SBB, 1883–1902

Accounting as the key to nationalisation

Escher died at Belvoir on 6 December 1882, a few months after the Gotthard line had opened without him.¹ His death removed the most formidable defender of private railways, but it did not settle the question of ownership. That question turned, as the concessions of the 1850s had foreseen, on the right of the Confederation to buy the lines at fixed dates and on the price it would have to pay. The price depended on accounts that the companies themselves kept. Every attempt at purchase therefore began with a dispute about accounting.

The Confederation approached the problem through legislation. A first federal accounting act for the railways, of 21 December 1883, standardised the financial reporting of all companies and met demands that Parliament had raised for years. A second accounting act, of 27 March 1896, went further. It required separate accounts for each line, defined which items could be counted as invested capital and referred disputes over the interpretation of the concessions to the Federal Court, thereby creating a reliable basis for calculating purchase prices.² For the lawyer, the accounting acts are the most interesting part of the story. They show that the decisive instrument of public policy was a set of technical rules on the valuation of assets and the measurement of earnings, drafted by experts who understood that whoever controlled the numbers controlled the price.

The failure of 1891

The first attempt at nationalisation came from the Federal Council member who had become Escher’s principal adversary in the Gotthard affair. Emil Welti proposed that the Confederation acquire the Centralbahn, financed by a federal loan of 100 million francs. Casimir von Arx supplied the calculations, deriving a purchase value of 86.25 million francs from the average earnings of ten years multiplied by 25. Parliament approved, but in the referendum of 1891 almost 69 per cent of voters rejected the purchase, and only the four cantons served by the Centralbahn voted in favour. Welti resigned immediately after the defeat.³ What the electorate refused in 1891 was a generous price for one company’s shares without a clear plan for the network as a whole. The idea of a state railway as such remained open.

Welti’s successor, Josef Zemp, an advocate of nationalisation, entered the Federal Council in 1891. In January 1892 the National Councillor Theodor Curti and the Councillor of States Auguste Cornaz submitted motions asking for a comprehensive study of railway reform and of the possibilities of purchase. Zemp assembled an expert commission that included Casimir von Arx, Konrad Cramer-Frey, Eugen Escher and Robert Moser, which prepared the legislative groundwork for the next attempt.⁴

Guyer-Zeller, the voting-rights act and the strike of 1897

The Nordostbahn itself supplied the decisive arguments for nationalisation. In June 1894 a financial group led by the Zurich industrialist and financier Adolf Guyer-Zeller, who had bought up shares on the market, gained control of the company’s management.⁵ The episode alarmed public opinion because it showed that a network of national importance could be captured by a stock-market operation. The Confederation reacted with a federal act of 1895 on voting rights in railway companies, which restricted voting rights to registered shareholders and guaranteed the Confederation representation on the boards of the railways.⁶ The measure is a Swiss precedent for the registration of shareholders and the limitation of anonymous voting power, themes that reappear in company law and in the modern debate on the transparency of legal entities.

In March 1897 the employees of the Nordostbahn went on strike after management had refused to honour wage agreements. Some 5,000 workers stopped the trains for about two days and secured better working conditions and higher wages. The strike damaged Guyer-Zeller’s reputation and strengthened public support for nationalisation. Guyer-Zeller himself is better remembered today for his last project, the Jungfraubahn, which he initiated in 1896.⁷

The Purchase Act of 1897 and the referendum of 1898

The federal act of 15 October 1897 on the acquisition and operation of railways for the account of the Confederation and on the organisation of the administration of the Swiss Federal Railways was designed to avoid the mistakes of 1891. It covered all five main companies. It set out the purpose of the state railway: a unified tariff system, the repayment of the capital within about 60 years and the use of surpluses exclusively for the improvement of transport, so that the railways could not be exploited as a source of general federal revenue. The purchase was to be made preferably under the terms of the concessions, although negotiated settlements were permitted. Compensation was to be based on 25 times the average net earnings of the preceding ten years where that figure exceeded the invested capital. The act also created the organisation of the new enterprise, with a board of 55 members, a general directorate and five district directorates.⁸

A referendum was called against the act, which led to a campaign of great intensity. The supporters, who included the Radical-Democrats, the Social Democrats, the Grütli association and the trade unions, campaigned under the slogan “Die Schweizer Bahnen dem Schweizer Volk” and promised better timetables and lower fares. Federalists, the Bernese conservatives and many voters in western Switzerland opposed the act as centralist and too expensive. On 20 February 1898 the electorate approved the act by 386,634 votes to 182,718. The two-thirds majority was achieved with the highest turnout recorded up to that date.⁹ Seven years after the rejection of the Centralbahn purchase, the same electorate had endorsed a far larger transaction, because it was presented as a coherent national project with a transparent basis for the price.

The birth of the SBB and the price of the network

The purchases were executed between 1900 and 1909. After the Confederation had bought the Centralbahn in November 1900, its trains ran for the account of the Confederation from 1 January 1901. When the Nordostbahn came under the new administration on 1 January 1902, that date came to be regarded as the official birthday of the Schweizerische Bundesbahnen.¹⁰ The Vereinigte Schweizerbahnen followed in 1902, the Jura-Simplon in 1903 and the Gotthard railway in 1909. According to the HLS, the five main companies brought 937 kilometres of the Jura-Simplon, 771 kilometres of the Nordostbahn, 398 of the Centralbahn, 269 of the Vereinigte Schweizerbahnen and 273 of the Gotthard railway into the new enterprise.¹¹

The prices were substantial. Röll gives 189.8 million francs for the Centralbahn, 265.6 million for the Nordostbahn, 90.7 million for the Vereinigte Schweizerbahnen, 358.4 million for the Jura-Simplon and 217.1 million for the Gotthard railway. The shareholders of the Nordostbahn received 80 million francs in 3.5 per cent federal railway bonds. Including premiums over the original invested capital, the total commitment for the purchases up to 1915 amounted to 1.189 billion francs. The HLS notes that the purchase price of more than one billion francs was charged to the newly created SBB, leaving the general federal budget untouched. By 1914 the consolidated debt of the federal railways had reached 1.56 billion francs at an average interest rate of 3.53 per cent, which required 55.1 million francs a year in debt service. The original repayment period of 60 years was later extended to 100 years, while the debt burden hampered the SBB until a federal act of 1944 provided relief.¹²

Railway finance remained a business of the capital market after nationalisation, with a new issuer. Where the market had once held shares and bonds of five private companies, it now held the bonds of a federal enterprise whose debt was among the largest in the country. The conversion of Nordostbahn shares into federal railway bonds is emblematic. Escher’s shareholders, who had borne the risk of private enterprise, became creditors of the state. The Zurich banks that had once placed railway shares now placed and traded federal railway paper.

Notes

1. HLS, “Escher, Alfred” (cited above). The HLS records that he declined, citing his health, the invitation to the celebration of the tunnel breakthrough in 1880 and the opening ceremonies of 1882. The Zentralbibliothek Zürich, “Alfred Escher” (cited above), states instead that he was not invited to the breakthrough ceremony; the two accounts are not easily reconciled. ↩
2. Röll, “Schweizerische Eisenbahnen” (cited above), section on the accounting laws. On the drafting of the 1896 act and the role of the Solothurn financier Casimir von Arx, who chaired the preparatory commission, see “Der steinige Weg zur Staatsbahn. Vorgeschichte der Bahnverstaatlichung”, archiventis-wissenschaft.ch, 2021, https://www.archiventis-wissenschaft.ch/view/data/9046/2021-06-28%20Der%20steinige%20Weg%20zur%20Staatsbahn.pdf (author not stated in the version consulted). ↩
3. “Der steinige Weg zur Staatsbahn” (cited above), section on the failed Centralbahn purchase. The document stresses that the piecemeal approach of buying a single company, without a comprehensive plan for a federal network, contributed to the defeat. ↩
4. HLS, “Eisenbahnen” (cited above), section “Alpenbahnen und Rückkauf/Verstaatlichung”; “Der steinige Weg zur Staatsbahn” (cited above), section on the new momentum of 1892–1898. ↩
5. “Der steinige Weg zur Staatsbahn” (cited above). Bahndaten, “Schweizerische Nordostbahn” (cited above), describes Guyer-Zeller as having gained control through speculative purchases. ↩
6. “Der steinige Weg zur Staatsbahn” (cited above), which describes the act as a direct response to the Guyer-Zeller takeover. ↩
7. HLS, “Schweizerische Nordostbahn (NOB)” (cited above); the duration of 41 hours is given in Wikipedia (en), “Swiss Northeastern Railway” (cited above); “Der steinige Weg zur Staatsbahn” (cited above), section on critical events; Presence Switzerland, “Weltmeisterin im Zugfahren” (cited above). ↩
8. Röll, “Schweizerische Eisenbahnen” (cited above), section on the law of 15 October 1897. ↩
9. Wikipedia (de), “Volksabstimmungen in der Schweiz 1898”, https://de.wikipedia.org/wiki/Volksabstimmungen_in_der_Schweiz_1898; SBB, “Geschichte”, company.sbb.ch, https://company.sbb.ch/de/ueber-die-sbb/profil/geschichte.html. Wikipedia (de), “Geschichte der Schweizer Eisenbahn” (cited above), gives the number of no votes as 182,716; HLS, “Eisenbahnen” (cited above), section “Alpenbahnen und Rückkauf/Verstaatlichung”. ↩
10. SBB, “Geschichte” (cited above). The HLS dates the start of operations of the general directorate in Bern and the five district directorates in Lausanne, Basel, Zurich, St Gallen and Lucerne to 1 January 1901: HLS, “Eisenbahnen” (cited above). ↩
11. HLS, “Eisenbahnen” (cited above). The HLS article on the Nordostbahn gives the company’s network at the time of the takeover as 853 kilometres, a figure that presumably includes lines operated but not owned by the company. ↩
12. Röll, “Schweizerische Eisenbahnen” (cited above), sections on acquisition prices and capital structure. Röll dates the effective acquisition of the Nordostbahn network to 1901 for accounting purposes, while the SBB treats 1 January 1902 as the date on which the company came under federal administration. HLS, “Eisenbahnen” (cited above), for the charging of the purchase price to the SBB and for the relief of 1944; Bahndaten, “Schweizerische Bundesbahnen”, https://bahndaten.ch/content/bahnen-detail/151/schweizerische-bundesbahnen, for the repayment period. ↩

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 September 2025.