The Most Valuable Asset of the Reich: A History of the German National Railway, Volume 1, 1920-1932

By Alfred C. Mierzejewski

The largest enterprise in the capitalist world between 1920 and 1932, the Deutsche Reichsbahn (German National Railway) was at the center of events in a period of great turmoil in Germany. In the first detailed history of this important organization, Alfred Mierzejewski presents a sophisticated analysis of the Reichsbahn's operations, finances, and political and social roles. In addition, he uses the story of the Reichsbahn to gain new perspectives on modern German economic and political history.

Mierzejewski describes and analyzes the beginnings of the national railway in Germany and the problems that it faced. He examines the Reichsbahn's noncapitalistic, "commonweal" approach to economic management and shows how the railway was used to hold Germany together, especially in the face of Bavarian particularism. Mierzejewski's account also provides unparalleled insight into Germany's reparations policies, demonstrating that Germany was fully capable of paying the Dawes annuities and that the government's claims that reparations paid by the Reichsbahn hurt both the railway and Germany were groundless. A second volume will cover the period from 1933 to 1945.

• Language: English
• Publisher: The University of North Carolina Press
• Release date: Mar 30, 2014
• ISBN: 9781469620206

Alfred C. Mierzejewski

Alfred C. Mierzejewski is professor of German history at the University of North Texas. His previous publications include The Most Valuable Asset of the Reich: A History of the German National Railway (Volumes 1 and 2) and The Collapse of the German War Economy, 1944-1945: Allied Air Power and the German National Railway.

Book preview

The Most Valuable Asset of the Reich

The Most Valuable Asset of the Reich

A History of the German National Railway

Volume 1

1920-1932

by

Alfred C. Mierzejewski

The University of North Carolina Press

Chapel Hill and London

© 1999 The University of North Carolina Press

All rights reserved

Set in Minion multiple masters type

by Tseng Information Systems, Inc.

Design by Charles Ellertson

Manufactured in the United States of America

The paper in this book meets the guidelines for permanence and durability of the Committee on Production Guidelines for Book Longevity of the Council on Library Resources.

Library of Congress Cataloging-in-Publication Data

Mierzejewski, Alfred C.

    The most valuable asset of the Reich : a history of the

    German National Railway / by Alfred C. Mierzejewski.

        p. cm.

    Includes bibliographical references and index.

    Contents: v. 1.1920-1932—

ISBN-13: 978-0-8078-2496-2 (cloth : alk. paper)

ISBN-10: 0-8078-2496-8 (cloth : alk. paper)

1. Deutsche Reichsbahn (Germany)—History—20th century. 2. Railroads and state —Germany—History—20th century. I. Title.

HE3080.D4M535            1999

385'.06'543—dc21       98-53440

CIP

10 09 08 07 06 6 5 4 3 2

THIS BOOK WAS DIGITALLY PRINTED.

Contents

Preface

Acknowledgments

Abbreviations

Part I. The Deutsche Reichsbahn as a State Enterprise, 1920-1924

1. The Creation of the Deutsche Reichsbahn, 1918-1920

2. The Deutsche Reichsbahn, April 1920-August 1923

3. The Deutsche Reichsbahn Enterprise, August 1923-October 1924

Part II. The Deutsche Reichsbahn-Gesellschaft as a Semipublic Enterprise, 1924-1932

4. The Deutsche Reichsbahn-Gesellschaft and the Dawes Plan

5. The Deutsche Reichsbahn-Gesellschaft in the Period of Stabilization and Prosperity, October 1924-1929

A. Relationship to the Reich

B. Organization

C. Operations and Traffic

D. Personnel

E. Capital: Rolling Stock

F. Capital: Fixed Plant

G. Financial Reform

H. Financial Affairs

6. The Deutsche Reichsbahn-Gesellschaft and the Depression, 1930-1932

A. The DRG, the Young Plan, and the End of Reparations

B. The DRG’s Operations

C. The DRG and the Government’s Struggle against Unemployment

D. The DRG’s Reaction to Modal Competition

Conclusions

Appendix

Notes

Bibliography

Index

Tables

  2.1. Summary of DR Passenger Operations and Traffic, 1920-1924, 53

  2.2. Summary of DR Freight Operations and Traffic, 1920-1924, 53

  2.3. Reichsbahn Operating Results, 1920-1923, 54

  2.4. Reichsbahn Debt, 1 April 1923, 55

  5.1. Summary of DRG Freight Operations and Traffic, 1925-1929, 160

  5.2. Operating Ratio by Traffic, 1928-1938, 161

  5.3. Business Ratio by Traffic, 1928-1938, 161

  5.4. Summary of DRG Passenger Operations and Traffic, 1925-1929, 168

  5.5. DRG Labor Productivity, 191

  5.6. Deutsche Reichsbahn-Gesellschaft Employee Productivity, 192

  5.7. Profile of DRG Personnel Expenses, 1913, 1925-1929, 194

  5.8. DRG Vehicle Acquisition Expenditures, 1925-1929, 196

  5.9. The Steam Locomotive Fleet of the DRG, 1925-1929, 198

5.10. The Freight Car Fleet of the DRG, 1925-1929, 210

5.11. The Passenger Car Fleet of the DRG, 1925-1929, 212

5.12. DRG Track Renewal, 1925-1929, 216

5.13. Capital Budget of the DRG, 1925-1929, 228

5.14. DRG Renewal Expenditures, 1925-1929, 229

5.15. New Construction and Additions Funded through the Capital Account, 1925-1929, 229

5.16. DRG Spending for Expansion of Capital Assets, 1925-1929, 229

5.17. Summary of the DRG Operating Account, 1924-1929, 265

5.18. DRG Cash Flow, 1924-1929, 265

5.19. Participations of the DRG as of 31 December 1929, 276

  6.1. Summary of DRG Passenger Operations and Traffic, 1930-1932, 314

  6.2. Summary of DRG Freight Operations and Traffic, 1930-1932, 315

  6.3. DRG Track Renewal, 1930-1932, 323

  6.4. DRG Operating Results, 1930-1932, 326

  6.5. Capital Budget of the DRG, 1930-1932, 333

  6.6. DRG Renewal Expenditures, 1930-1932, 333

  6.7. DRG Spending for Expansion of Capital Assets, 1930-1932, 334

A.1. Basic Characteristics of the Deutsche Reichsbahn, 359

A.2. Basic Operating Statistics of the Deutsche Reichsbahn, 360

A.3. Basic Financial Information Concerning the Deutsche Reichsbahn, 360

A.4. Operating Accidents of the Deutsche Reichsbahn, 361

A.5. Organization of the Deutsche Reichsbahn, January 1921, 361

A.6. Organization of the Deutsche Reichsbahn-Gesellschaft, September 1925, 362

Figures, Maps, and Illustrations

FIGURES

5.1. Comparison of Cost of Shipping 1 Ton of Coal 100 Kilometers, 1929, 158

5.2. Comparison of DRG Tariffs and Prices, 159

5.3. Comparison of Third-Class Passenger Fares, 1929, 166

5.4. Comparison of DRG Pay with Pay in Comparable Industries, 189

5.5. Comparison of DRG Real Wages and NNP, 190

5.6. DRG Rail Weight, 222

MAPS

1. The Reichsbahn Divisions, 1927, xxi

2. Main Routes of the Deutsche Reichsbahn-Gesellschaft, 1929, xxii

ILLUSTRATIONS

Wilhelm Groener, 2

Carl Friedrich von Siemens, 82

Preface

This is the story of the largest enterprise in the capitalist world in the years between 1920 and 1932, the Deutsche Reichsbahn (German National Railway).¹ However, its importance derives from more than the sheer size of the Reichsbahn. It arises primarily from the fact that the Reichsbahn was at the center of events in a period of great turmoil in German history.

The Deutsche Reichsbahn was conceived primarily as a response to the centrifugal forces that threatened to tear apart the Weimar Republic during its early years. The great railway reaching every part of the nation was assembled with the express purpose of countering Bavarian particularism and breakaway tendencies in the Rhineland, while reassuring the people of East Prussia, separated from the Reich by the Polish Corridor, that they remained part of the German fold. The way that the Reich government and the states handled railroad unification and the structure that they gave to the Reichsbahn reflected the unstable compromise between the advocates of a centralized state and the proponents of federalism in Germany after World War I.² As with the general settlement, the distribution of power within the Reichsbahn favored central authority, although concessions were made to regional desires for the retention of some traditional prerogatives. Its strong policy-making headquarters were dominated by Prussian officials, though with a significant admixture of southwest Germans. The Reichsbahn, however, decentralized responsibility for operations and customer service and maintained the local character of its regional operating divisions. Bavaria, as was the case in general political matters, received special privileges that permitted it to retain the trappings of sovereignty while enjoying very little of its substance.

The Reich and the states also intended that the creation of the Reichsbahn would help solve the fiscal and operating problems that had plagued the state railways during the last years of their existence. Chapter 2 discusses how Reich transportation minister Wilhelm Groener, who was responsible for the Reichsbahn, tackled these difficulties and, in so doing, describes an aspect of his career that has hitherto been almost completely ignored.³ It shows how he welded the disparate elements of the Reichsbahn together into an effective operating organization and brought it to fiscal solvency, and how he offered a vision for its relationship with the government that foreshadowed the arrangements made in 1923, 1924, and 1939. In addition, chapter 2 gives a new, more accurate account of the attempt by the Reich Association of German Industry to reorganize the Reichsbahn in 1921 and 1922.⁴ It shows that, in fact, the association proposed creating a mixed enterprise fully compatible with the prevailing German corporatist system and illuminates the prejudice against private enterprise that prevailed in Weimar Germany. The first two chapters also provide strong evidence contradicting the argument made by Carl-Ludwig Holtfrerich that the inflation of 1920-22 was beneficial to Germany.⁵ In fact, the Reichsbahn suffered immensely from the government’s policy of expanding credit and printing money to put people to work and was not an effective instrument for creating jobs or stimulating economic growth. It was hampered by employees who produced little and who disrupted its operations, which led to poor service. To create employment in heavy industry, it bought more locomotives than it needed, leading to a diversion of resources from more pressing needs such as refurbishing track. Excessive locomotive acquisitions burdened the Reichsbahn’s capital account, caused an age imbalance in its locomotive fleet, delayed the introduction of new forms of motive power, and preserved unnecessary capacity in the locomotive building industry. Inflation economics also prevented the Reichsbahn from charging adequate tariffs. Recovering from these problems necessitated massive layoffs of useless personnel, which were not understood by the public, and major cuts in orders for engines and other types of rolling stock. A lasting legacy of the unnecessary hirings was an excessive pension bill that reduced the Reichsbahn’s financial flexibility for over two decades. These findings support the argument made recently by Niall Ferguson that Germany lost more than it gained from the inflation, and present a clearer picture than that drawn by Gerald Feldman in his massive but analytically equivocal history of the early years of Weimar.⁶

Chapter 5 demonstrates clearly that the Reichsbahn was fully capable of paying reparations without harming either itself or Germany.⁷ This striking finding contradicts the current scholarly consensus based on emotional analyses of macroeconomic evidence, most notably the recent book by Bruce Kent, and the classic forerunner of all of this literature, The Economic Consequences of the Peace by John Maynard Keynes.⁸ Yet, the novelty of the findings presented here does not end with this. This account clearly shows that the Reichsbahn benefited from its incorporation in the reparations apparatus. Reparations, along with the loss of its land transportation monopoly, compelled the Reichsbahn to develop more effective cost accounting mechanisms and to improve its financial accounting and reporting procedures. In taking these steps, the Reichsbahn was submitting itself to the discipline of monetary measures of operating efficiency and the capital market. In other words, it improved its internal efficiency and reduced its misallocation of social resources. This was precisely what the Allies sought. The Reich government and most Reichsbahn officials fiercely resisted these changes because they understood that the more efficient market mechanism would restrict their ability to use the railway for commonweal purposes. An examination of the Reichsbahn’s operating, financial, and accounting policies and the resistance to changing them shows that the Prusso-German form of organized, commonweal capitalism differed in significant ways from the more individualistic, money-oriented market capitalism practiced in the Anglo-Saxon economies, especially the U.S. economy. This part of the Reichsbahn story demonstrates that, although the struggle to make Germany pay for the damage that it had inflicted on its neighbors during World War I was very important, reparations simultaneously triggered an equally significant clash of economic cultures.

Chapter 6 shows that the Reich government did not hesitate to use the Reichsbahn to engage in countercyclical spending on a substantial scale from the outset of the Great Depression, not coincidentally, after Allied supervision of the railway had ended. The discussion offered here of the Brüning government’s countercyclical policy confirms Knut Borchardt’s assessment in some respects but undermines it in others.⁹ Chapter 5 provides evidence to support Borchardt’s contention that Weimar had become a state that heavily used subventions and redistributive policies to achieve social goals. It also shows that between 1924 and 1930 the Reichsbahn’s labor bill rose faster than its labor productivity, confirming Borchardt’s claims in this regard. Chapter 6 provides an accurate picture of the size of the job creation and economic stimulation plans that were discussed by the Brüning cabinet, showing clearly, as Borchardt contends, that they were too small to reverse the slide of the economy. This account also confirms Borchardt’s claim that Brüning tried to have institutions other than the Reich government use their credit to fund jobs programs, especially in 1931. However, this account contradicts Borchardt’s assertions in some important respects. Borchardt contends that excessive wages resulted in a lack of investment capital, which in turn weakened the German economy, causing unemployment. Chapter 5 demonstrates that, far from lacking capital, the Reichsbahn was in fact very well endowed with physical plant and rolling stock. It disposed over sufficient retained earnings, hidden reserves, and credit to fund its modest investment requirements. The liquidity problems that the Reichsbahn faced from 1927 to 1929 were actually due to its own misguided capital spending and tariff policies. Much of the investment capital that it did posses was misallocated due to government pressure to support the rolling-stock industry and to build lines and stations that were not operationally necessary. Borchardt also argues that countercyclical plans were first proposed in the spring and summer of 1931 and that no expansionary policy was followed until the summer of 1932. In fact, the Reich proposed that the Reichsbahn undertake a sizable jobs program to be funded by credit in June 1930. Interestingly, chapter 5 highlights Borchardt’s failure to take into account the countercyclical spending program undertaken by the Reich government in 1926, although he stresses the importance of the recession that took place in that year. This program was an important precedent for what was actually done in 1930 and 1931. The gaps and inaccuracies that this history exposes in Borchardt’s case suggest that analyses based on global statistics should be used with caution and that only microeconomic analyses can present a clear and reliable picture of what actually happened and what might have been done differently. This study also refutes Jan-Henrik Peters’s claim in his recent history of the Reichsbahn’s personnel policies that its personnel expenses were excessive and were the cause of the railway’s supposed lack of investment capital.¹⁰

This book provides a new view of the railway’s relationship with its modal competitors. In chapter 6, it depicts the Reichsbahn’s reluctance to compete against truckers for freight business due to the commonweal attitudes of its career officials and the difficulty that they had in comprehending the nature of the threat to their share of the freight transportation market. Ultimately, the Reichsbahn attempted to divide the market and to suppress price competition through a cartel, fully in keeping with the traditions of the commonweal economy and its corporatist organization.

The overall analysis presented here draws on the notion proposed by the new cultural history that autonomous national cultures shape decisively national economic policies.¹¹ According to this perspective, political and business cultures differ as a result of the various historical experiences of nations. The implication is that economic policy making is not always rational. The new theory supports the contention that a distinct German business and economic culture both set the goals that the Reichsbahn pursued and shaped how it attempted to achieve them. The examination of the record presented here shows that many of the policies implemented by the Reichsbahn were irrational—that is, they hindered the achievement of the goals ordained for the railway by the German people. Moreover, in pursuing culturally defined goals, the Reichsbahn unwittingly harmed Germany’s economic and political well-being, largely because those goals were incompatible with well-known market-oriented prescriptions for economic success.¹² This finding in turn leads to the observation, contrary to the contentions of the new cultural historians, that general rules for economic growth and prosperity do exist, but that they are frequently violated more or less consciously to a greater or lesser extent, leading to varying degrees of suboptimal economic performance among nations. In short, this book combines market-oriented economic concepts with the renewed realization that distinct business and economic cultures exist that transcend economic rationality. The result is an original and incisive analysis that gives meaning to the narrative that composes the bulk of the book.

A fundamental component of the analytical framework supporting this history, and flowing logically from the comments made in the foregoing paragraph, is the contention that the German economy was a commonweal institution organized on corporatist lines.¹³ The commonweal view was a composite of anticapitalist attitudes from the left and antimodernist, antisecular beliefs from the right, particularly from agrarian and ecclesiastical sectors. It was reinforced by the Prussian notion of the authoritarian welfare state, the concept that the state was responsible for the collective well-being of its citizens. The bureaucratic expression of this philosophy had been the Prussian and other state administrations organized on a cameralistic basis to promote the prosperity of the people and therefore of the state itself. These governmental forms were reinforced by the widely held opinion that the group was more important than the individual and by the religious and socialist deprecation of money as a dehumanizing institution and profit as inherently unfair. Politicians and officials of both the Reich and state governments and the majority of the Reichsbahn’s own administrators embraced these values. Consequently, they rejected economic measures of the viability of individual services and, to the extent that they concerned themselves with financial matters at all, saw only the overall solvency of the enterprise as desirable. The railway thus perceived its mission as assisting various economically defined groups in achieving their goals. It sought to shield groups from technological or locational disadvantages to allow all groups to participate equally in national economic life and to reduce disparities in standards of living among them. These deeply held attitudes explain much of the Reichsbahn’s behavior. They led to the dissipation of resources and, ironically, did not improve the general welfare of the German people.

This account incorporates a wealth of new information drawn from archival materials and contemporary industry publications, most of which have never been cited before. The most important storehouse of that information was the Reichsbahn’s own files preserved, at the time that this book was prepared, at the Bundesarchiv Koblenz and the Bundesarchiv Abteilung III, Aussenstelle Coswig (Anhalt). These records are very extensive and extremely revealing. They are now housed at the new Bundesarchiv facility at Berlin-Lichterfelde. The Groener Papers held at the Bundesarchiv-Militärarchiv in Freiburg-im-Breisgau are especially useful for the period 1920 to 1923, providing an excellent insight into the work of this great man. The documents kept by the Bayerisches Hauptstaatsarchiv in Munich supply valuable new information concerning Bavaria’s actions relating to the creation of the Reichsbahn and the Dawes negotiations. The papers of Carl Friedrich von Siemens kept by the Siemens-Archiv in Munich provide useful information, though less than they might have had access to them been unrestricted. The files of the Prussian state government, formerly held by the Geheimes Staatsarchiv Preussischer Kulturbesitz in Merseburg, yielded worthwhile information concerning the creation of the national railway in Germany. Finally, in addition to other archival sources, contemporary industry periodicals, especially the excellent in-house publications of the Reichsbahn, offer the researcher a vast array of useful information that should not be overlooked.

In sum, this book is intended to be more than the story of a railway. While providing a record of the Reichsbahn’s activities between 1920 and 1932, it also uses the Reichsbahn as a pathway to gaining new insights into modern German economic and political history, employing new information organized using a balance of new and traditional analytical concepts.

Acknowledgments

No publication with the scope and depth of this history of the Reichsbahn could be written without the support of many people and organizations. I received generous financial support from the Fulbright Commission, which allowed me to spend ten months in Germany visiting various archives. This grant was absolutely essential for the completion of this work. I also received monetary support from the German Academic Exchange Service and on two occasions from the National Endowment for the Humanities. I would like to thank the staffs of these three organizations for their efficiency and the assistance that they provided me, which went far beyond financial matters.

This book is testimony to the vital importance of archives and archivists to historical research. I would like to begin by thanking the members of the outstanding staff of the Bundesarchiv, Koblenz, for their excellent support of my efforts during my stay with them. I would especially like to acknowledge the help of Dr. Rest, Herr Scharmann, and Frau Jacobi. At the Bundesarchiv Aussenstelle in Coswig (Anhalt), I received the greatest imaginable help from that institution’s director, Frau Wessling, and her two skilled, energetic, and friendly subordinates, Frau Redlich and Frau Wittkowsky. The latter two made my stay especially pleasant and helped me find documents that I would otherwise have overlooked. In Potsdam, and later in Berlin-Lichterfelde, I was assisted by Herr Roeske and his staff. I was also ably supported by the staff of the Bundesarchiv-Militärarchiv in Freiburg-im-Breisgau. I would like to thank Dr. Lehmann and his staff at the Geheimes Staatsarchiv Preussischer Kultur-besitz in Merseburg for allowing me to see Prussian state records at their facility. In Munich, Hans-Liudiger Dienel and Helmuth Trischler provided me with a warm welcome and expert assistance at the Deutsches Museum. Herr Hartmut Korn provided me with the benefit of his extensive expertise and energetic help during my stay at the Bayerisches Hauptstaatsarchiv. Professor Dr. Wilfried Feldenkirchen and Herr Bien helped me with the Carl-Friedrich von Siemens Papers at the Siemens-Archiv. Monika Deniffel made my work at the Institut für Zeitgeschichte productive and pleasant.

I was also welcomed at other archives in Germany. Frau Dr. Angela Keller-Kühne and her staff made working at the Archiv fur christlich-demokratische Politik in Sankt Augustin rewarding. I would also like to thank the staff of the Auswärtiges Amt archives in Bonn and at the Deutscher Gewerkschaftsbund in Dusseldorf. I also profited greatly from the assistance given to me by the staff of the Staatsbibliothek in Berlin, the staff of the Rheinische Landesbibliothek in Koblenz, and the staff of the library of the Universität Dortmund, home of the collection of the Deutsche Gesellschaft fur Eisenbahngeschichte. At the archive of the Reichsbahndirektion Berlin I was assisted by Frau Christa Müller, its chief, and Frau Vera Schmäh. At the Reichsbahndirektion Halle (S) archive, Herr Klaus Wiebelitz gave me expert help in using his very extensive and valuable holdings. My thanks also go to Frau Bettina Harlein of the Landesmu-seum für Technik und Arbeit in Mannheim and to Christopher Kopper of the Georg-August-Universität Göttingen. Finally, I would like to extend my special thanks to Alfred Gottwaldt of the Deutsches Technikmuseum in Berlin, who not only gave me the benefit of his extensive knowledge of the Reichsbahn but also helped me in many other very important ways.

I would like to thank the staff of the Public Records Office, Kew, London, for its quick response to my request for copies of documents and Mr. Tim Hughes for helping me obtain them.

In the United States, I was assisted by George D. Arnold and Robert Forman of the American University Archives, Barbara R. Dailey of the Baker Library, Harvard University, and Virginia L. Smyers of the Pusey Library, also at Harvard. Nanci Young guided me through the Eberstadt Papers at the Mudd Library of Princeton University. Judith Ann Schiff and William R. Massa Jr. assisted me during my stay at the Sterling Library, Yale University. D. W. Wright provided valuable assistance during my use of the J. P. Morgan Jr. Papers at the Pierpont Morgan Library in New York. I would like to thank R. Russell Maylone for allowing me to see the Charles Dawes Papers at Northwestern University in Evanston, Illinois, and Sigrid Pohl Perry for helping me use them. I would also like to acknowledge the assistance that I received from the staff of the New York Historical Society. I received especially valuable help from the staff of the library of the University of Illinois at Urbana-Champaign. Finally, but certainly not least, I would like to thank Robert Burkhardt and his staff at the Athens State University library in Alabama.

I would like to thank my wife, Carolann, for tolerating my long absences, both physical and spiritual.

Abbreviations

The following abbreviations are used in the text. For abbreviations used in the notes, see pages 363-64.

AEG Allgemeine Elektrizitätsgesellschaft (General Electric Company) AG Aktiengesellschaft (joint-stock company) Beko Betriebskostenrechnung (Operating Cost Account) BIS Bank for International Settlements BP Beschleunigter Personenzug (accelerated passenger train) Bw Bahnbetriebswerk (locomotive shed) DBB Deutscher Beamtenbund (German Civil Servants Federation) Deka Deutsche Kreditsicherungs-Aktien-Gesellschaft (German Credit Assurance Company) DEV Deutscher Eisenbahnerverband (German Railroaders Association) DIHT Deutscher Industrie- und Handelstag (German Chamber of Industry and Commerce) DNVP Deutschnationale Volkspartei (German National People’s Party) DR Deutsche Reichsbahn, 1920-1924 (German National Railway) DRB Deutsche Reichsbahn, 1937-1945 (German National Railway) DRG Deutsche Reichsbahn-Gesellschaft, 1924-1937 (German National Railway Company) DVKB Deutsche Verkehrs-Kredit-Bank (German Transportation Credit Bank) DWV Deutsche Wagenbau-Vereinigung (German Car Builders Association) EAW Eisenbahnausbesserungswerke (Railway Repair Works) EBD Eisenbahndirektion (Railway Division) ED Eisenbahndirektion (Railway Division) FD Ferndurchgangszug (long-distance express train) Fobu Fortbildung des Buchungswesens (Development of Bookkeeping) Gbl/GBL Generalbetriebsleitung (General Operating Office) GD Generaldirektor GDW Geschäftsführende Direktion für das Werkstättenwesen (Managing Division for Workshops) GM gold mark GmbH Gesellschaft mit beschränkter Haftung (private limited liability company) GV Gruppenverwaltung (group administration) HV Hauptverwaltung (Main Administration) Hw Hauptwagenamt (Main Car Office) ICC Interstate Commerce Commission KKB Kunze-Knorr-Bremse KPEV Königlich Preußische Eisenbahn-Verwaltung (Royal Prussian Railway Administration) K-Tarif Konkurrenztarif (competitive tariff), Kraftwagenwettbewerbstarif (motor vehicle competition tariff) KVD Kraftverkehrdeutschland (German Trucking Company) KVG Kraftverkehrsgesellschaft (motor truck company) LCL less-than-carload freight (Stückgut) Leig Leichter Güterzug (light freight train) M mark MICUM Mission Interalliée de Contrôle des Usines et des Mines (Interallied Mission to Supervise Factories and Mines) Obl Oberbetriebsleitung (Higher Operating Office) RAW Reichsbahnausbesserungswerke (National Railway Repair Works) RBD Reichsbahndirektion (National Railway Division) RdI Reichsverband der deutschen Industrie (National Association of German Industry) Régie Régie des Chemins de Fer des Térritoires Occupiés (RCFTO) (Administration of the Railways of the Occupied Territories) RM Reichsmark RVM Reichsverkehrsministerium (Reich Transportation Ministry) RZA Reichsbahn-Zentralamt (Reichsbahn Central Office) SPD Sozialdemokratische Partei Deutschlands (Social Democratic Party of Germany) TN Technische Nothilfe (Technical Emergency Service) VDEV Verein Deutscher Eisenbahnverwaltungen (Association of German Railway Administrations)

Map 1. The Reichsbahn Divisions, 1927

Map 2. Main Routes of the Deutsche Reichsbahn-Gesellschaft, 1929

Part I

The Deutsche Reichsbahn as a State Enterprise, 1920-1924

Wilhelm Groener, Reich transportation minister, 1920-23 (Bildarchiv preussischer Kulturbesitz via Alfred Gottwaldt)

Chapter One

The Creation of the Deutsche Reichsbahn, 1918-1920

In March 1919 a Bavarian yardmaster reported to his superiors the chaos that reigned in his yard. Freight cars sat idle for weeks before being put into trains, and theft of freight was rampant. The introduction of the eight-hour day had led him to hire one hundred former soldiers to compensate for the reduced work time of his regular employees. However, the soldiers lacked railway experience and accomplished little. As the yardmaster described the situation: The order that we had earlier on the state railways will be absent for a long time. The personnel are only interested in earning as much as possible and having a lot of free time, not in intense, dedicated work. At every opportunity, they turn to the union, which then, through the divisional headquarters, applies heavy pressure on the virtually powerless supervisors.¹

The circumstances that he described in Bavaria were, far from being the exception, quite common. They were the result of the upheaval prevailing in Germany in the wake of military defeat, the fall of the Hohenzollern monarchy, the ensuing revolutionary struggle to reshape German society, and the disruption that these events caused in the economy. These problems expressed themselves within the railways in the form of deferred maintenance and poor labor morale.

The decline of the railways’ stations, track, bridges, and yards was a direct result of heavy use and the reallocation of resources to military purposes during the war and the collapse of scheduled maintenance after the armistice. Probably the most serious aspect of this problem was the deterioration of track. The quality of roadbed and the track laid upon it significantly influenced the speed and safety with which traffic could be carried and the size of the annual maintenance budget. Prior to World War I, the seven state railways had maintained their track at a high standard. During the war, maintenance declined due to the higher priority for steel given to armaments production and the diversion of men to the military and their replacement by less skilled and less willing labor.² After the end of hostilities and with the onset of domestic political and social unrest, line maintenance declined precipitously. During the five years from 1910 to 1914, the state railways renewed an average of 4,162 kilometers of track annually, or about 5.12 percent of their main-line track. During the war (1915-18), they renewed 2,934 kilometers or about 3.46 percent per year. In 1919 only 968 kilometers were renewed, just 1.28 percent of main-line track.³ After the reduced maintenance of the war, the virtual collapse of track renewal in 1919 raised the prospect of seriously reduced train speeds and an increase in accidents.

The state railways also suffered a general decline in the serviceability of their rolling stock. As a result of the armistice, they were compelled to turn over to the Allies 4,529 locomotives, 7,560 passenger cars, and 117,212 freight cars in early 1919. All were examined by Allied inspectors to ensure that they were in good repair. In effect, the best vehicles available to the state railways at the end of the war were relinquished to the victors. In the spring and summer of 1919, due to the implementation of Article 371 of the Treaty of Versailles, which required that the railways in the territories ceded by Germany be adequately equipped with rolling stock, an additional 3,056 locomotives, 4,651 passenger cars, and 75,776 freight cars were handed over. Later, more vehicles were lost when the Saar and part of Upper Silesia were separated from Germany. Overall, 7,944 locomotives, 12,933 passenger cars, and 212,818 freight cars were lost by the German railways as a result of the peace settlement by mid-1922.⁴ The Reich government, to compensate for these losses and to create jobs, purchased thousands of locomotives and cars between 1919 and 1923, more than replacing the vehicles given to the Allies. But poor labor morale negated these gigantic acquisitions. In 1913, 19.1 percent of the locomotives owned by the seven state railways were undergoing repairs and scheduled maintenance at any given time. This figure began to rise in 1916, reaching 33.7 percent in 1918, then jumping to 43.8 percent in 1919.⁵ Put differently, approximately 12,000 locomotives were unavailable for operations.⁶ Many of them were only a few months old. The cause of the vast increase in the number of unserviceable locomotives was the decline in the effectiveness of the locomotive sheds (Betriebswerke) and the Railway Repair Works (Eisenbahnausbesserungswerke, or EAW). Here, the main problem was the dramatic fall in labor productivity.

The repair shops were responsible for completing heavy repairs and scheduled heavy maintenance on the railways’ rolling stock. In Prussia in 1913,70,300 men worked in these large, factory-like facilities. By the end of 1919 their numbers had grown to 160,000. Yet during 1919 the number of locomotives available for service had fallen from 13,200 to 12,600, although about 1,160 new locomotives had been delivered, and 600 locomotives had been repaired by private contractors. The EAW repaired 750 locomotives weekly during the summer of 1919, but only 665 per week in November, and 520 in the first two weeks of January 1920.⁷ The cause was a dramatic decline in labor productivity due to poor morale and political unrest.

The major fall in the productivity of the Prussian repair shops was symptomatic of the morale problems confronting all of the German state railways in 1919. The government’s demobilization decrees of 1918 and 1919 required that railroaders returning from the military be given their old jobs back and prohibited laying off their replacements.⁸ In addition, railroaders from the territories lost by Germany were also entitled to employment. In 1913 the seven German state railways employed 741,082 people. Adjusted for the new borders of 1919, they would have had 692,714 employees. By the end of 1919 the state railways actually carried 1,122,505 people on their payrolls, a 51.5 percent increase over 1913.⁹ In Prussia alone, instead of the 450,000 people who had worked for the railway before the war, 800,000 were on the payroll in August 1919.¹⁰ Many of these people were sent out on track maintenance gangs where it was thought that their lack of railway experience would be least detrimental. But, as the statistics have shown, that proved illusory. Others were assigned to the EAW where their unwillingness to work and political preoccupations led discipline to disintegrate and output to fall.¹¹ The railways attempted to placate the workers by agreeing to cooperate with the newly formed works councils and by offering monetary incentives for satisfactory performance. Yet insubordination, strikes, and calls for equalization of pay among all employees, especially in February and March 1919, nullified these measures and reduced output.¹² As a report written on 2 November 1919 by Social Democratic and Democratic railway officials put it, respect for supervisors had disappeared.¹³

The serious collapse of morale among workers and lower- and middle-level management combined with deferred maintenance caused a major decline in the railways’ delivery of transportation services. The loss of rolling stock due to the armistice and reparations did not play a role. The decline in rail service in turn exacerbated the economic and political problems facing the young Weimar Republic. A look at the largest of the state railways, the Royal Prussian Railway Administration (Königlich Preufßische Eisenbahn-Verwaltung, KPEV) shows what happened.

The KPEV owned 67.25 percent of all rail lines and 74.7 percent of the locomotives and moved 88.6 percent of rail freight traffic in Germany in 1913.¹⁴ In the five years from 1909 to 1913, the KPEV had generated an average of 508.3 million train-kilometers annually. Yet in 1919 it delivered only 286.2 million train-kilometers, 43.7 percent less.¹⁵ Car turnaround time, the period between loadings, rose from 2.6 days in 1913 to 4.4 days in 1919.¹⁶ Cars were being used less, thereby reducing the effective transportation space available to shippers. While fewer trains were being run and fewer freight cars were being loaded, however, the accident rate actually increased. In 1911 the German railways suffered 4.45 accidents per million train-kilometers. This figure was 142.25 percent higher in 1919.¹⁷ Not only did the railways produce less and suffer more accidents, but they used the diminished resources at their disposal inefficiently. The critical factor here, again, was low labor productivity. The number of personnel per kilometer of line provides a crude but accurate measure of a railway’s labor intensity. This index had risen from 13.1 in 1913 to 18.9 in 1919, or by 44.3 percent.¹⁸ The use of motive power gives another indication. Compared with output in 1913, a locomotive of the German state railways produced 45.7 percent fewer kilometers of service. Yet in 1919 the number of personnel needed to produce 100,000 locomotive-kilometers had increased by 178.8 percent. Put differently, labor productivity as measured in locomotive-kilometers run to move revenue traffic had fallen by 64.2 percent since 1913.¹⁹ At the same time, locomotive coal consumption was 50 percent higher than in 1913 due primarily to the wasteful use of fuel by the engine crews.²⁰ The result of the combination of falling mine output and declining locomotive efficiency was a shortage of coal in industry and among the railways. Before World War I, the state railways had kept stocks of coal sufficient for seventy days of operations. During the summer of 1918 the railways had an average coal stock equivalent to thirty-six days consumption. By November 1919 the stocks had withered to just seven days.²¹ Overall, coal movements on Germany’s railways in 1918 were 21 percent lower than in 1913. Freight traffic was 22.75 percent lower and fell further to 42.7 percent lower in 1919.²² The poor morale of the railways’ bloated work force had caused a major decline in the quality and volume of transportation that the railways delivered to the German people, which in turn contributed to the country’s economic crisis.

The fall in the railways’ internal efficiency and their inability to move traffic transformed their finances. Prior to World War I, the state railways, especially the KPEV, had earned substantial surpluses. Those moneys had been transferred to the state treasuries or returned to the public in the form of reduced tariffs. In 1913 the seven state railways together earned a surplus of 1.002 billion marks and achieved an operating ratio of 70.04.²³ Adjusted for Germany’s new borders, they would have earned a surplus of 852.5 million marks.²⁴ The Prussian-Hessian railways had an operating ratio of 69.21, while the Royal Bavarian Railways achieved an operating ratio of 71.62.²⁵ In contrast, in 1919 the Länderbahnen suffered a combined loss of 4.07 billion marks, yielding an operating ratio of 151.8.²⁶ Germany’s state railways had declined from profitable enterprises that had supported the finances of their owners to losers that required massive and growing subsidies while delivering inadequate service. They had become a part of the crisis that threatened to tear Germany apart in the wake of military defeat and in the midst of political and social revolution. Yet the new national government saw in them an opportunity to solidify its own grip on power. The solution that the Reich government envisaged was the unification of the state railways as a single system under its ownership and control. The maladies afflicting the state railways, especially their growing deficits, eventually convinced the states to relinquish their prized possessions to the new republic.

As Johannes Bell, the first Reich transportation minister, recalled later, there were three major reasons for nationalization of the state railways in 1920. One was to create the economic basis for the rebuilding of the German nation-state. Second, the personnel, organized into unions, earnestly wanted nationalization. Finally, and of decisive importance in determining the timing of the transfer, the states could no longer bear the growing deficits being incurred by their railways.²⁷ The idea of having a single railway serving all of Germany was not new, though, until the catastrophic circumstances of 1919, it had always been overshadowed by the particularistic tendencies of the various states. As early as 1833 Friedrich List had proposed creating a single system of railways to promote German political unity and stimulate economic growth. In 1846 the Association of German Railway Administrations (Verein Deutscher Eisen-bahnverwaltungen, or VDEV) was formed to coordinate the technical and managerial policies of the private and state railways of the time. With the unification of Germany in 1871, a single set of operating rules was issued by the VDEV. Bismarck saw the railways as a means to reinforce the unified state that he had recently created and, in 1873, proposed a law to bring the various state and private lines under the control of the new Reich government. However, the states, particularly Bavaria and Saxony, defeated Bismarck. Therefore, he resorted to the alternative of having the state of Prussia, which he dominated, take over the privately owned lines within its territories beginning in 1879. The other states quickly followed this example. Over the next two decades, the states consolidated their individual systems and competed for traffic. Small steps toward coordination were taken such as the agreement of common operating and traffic rules and procedures for the exchange of cars. Finally, in 1896 Hessen signed a treaty with Prussia that administratively combined their two systems the following year.

In 1902 and 1903 Baden and Württemberg initiated talks aimed at a possible merger with the Prussian-Hessian system.²⁸ In September 1904 other states expressed an interest in joining these negotiations and an initial meeting of the parties concerned took place in January 1905.²⁹ At this early juncture, the Bavarian government condemned railway unification, staking out a position that it would maintain consistently through the 1920s.³⁰ Nevertheless, the gradual coordination of the activities of the state railways continued through agreements to end competition for freight traffic and to standardize passenger tariffs, signal rules, and operating procedures, culminating in April 1909 in the formation of the German State Car Association (Deutscher Staatswagen-verband).³¹ On 12 April 1912 the slow movement toward unification was stopped by the powerful Prussian minister of public works, Paul von Breitenbach, when he proclaimed that a proposal to allow the unrestricted movement of freight cars throughout Germany was as far as Prussia would go.³²

World War I dramatically changed the railway situation in Germany. On 1 August 1914 the state railways were brought under military control in order to assure the coordinated use of rolling stock and personnel for the war effort.³³ The advantages derived from this arrangement were so clear that some began thinking again that the unification of German railways was a worthwhile proposition. In 1915 Wiirttemberg took the initiative and proposed creating an association of German railways.³⁴ Again, von Breitenbach opposed placing the state railways under Reich authority.³⁵ He saw a unified national railway as an impossible dream. Because the railways were the most important means available to the states to promote the growth of their economies and to sustain their limited sovereignty, they could not relinquish full control over them. Von Breitenbach doubted that the Reich had the financial wherewithal to maintain the railways adequately. Most important, he feared that a national railway would become a tool of the democratically elected Reichstag with its powerful socialist faction. The result would be a decline in military preparedness and a serious financial weakening of the railways due to mismanagement. He also predicted that operating expenses would increase dramatically as pay would be standardized at the highest level prevailing before the fusion.³⁶

Confirming von Breitenbach’s apprehensions, sentiment in the Reichstag for the unification of Germany’s railways under the Reich grew. The culmination of this movement was a Reichstag resolution calling on the Reich government to form a committee to study the financial implications of railway and inland waterway unification on 26 March 1917.³⁷ The Prussian government reacted by preparing a substitute plan that it hoped would forestall nationalization. Wilhelm Hoff of the Prussian Ministry of Public Works proposed a federation (Bund) of German railways that would coordinate the finances of the existing state railways while leaving the sovereignty of the states untouched.³⁸ While Hoff was perfecting his plan, the Reich Interior Ministry assigned the Reichstag unification resolution to a parliamentary committee where, it hoped, the initiative would die.³⁹

Because of the dilatory treatment of its resolution, on 22 April 1918 the Reichstag renewed its call for the creation of a commission to study the nationalization of Germany’s railways and waterways.⁴⁰ Two days later, Prussian emissaries met clandestinely with representatives of Baden and Wiirttemberg to discuss Hoff’s Bund scheme. Then, on 9 June 1918, von Breitenbach secretly proposed the federation plan to the other railway states. In his cover letter, von Breitenbach emphasized Prussia’s continued opposition to railway unification and nationalization. He advocated instead increased cooperation at the operating and financial levels to achieve the same benefits as nationalization while preserving the sovereignty of the states. He proposed an association subordinate to a headquarters chaired by Prussia. Policy would be established by a conference of governmental representatives. A treasury would be created with i billion marks at its disposal gathered from contributions from the prosperous systems. The fund would be used to support the railways that were losing money, thereby eliminating one justification for unification. Remaining competition for traffic would be eliminated.⁴¹ To promote his plan, von Breitenbach held a meeting with representatives of the other railway-owning states at Wiesbaden on 28 and 29 June 1918. In his address, he emphasized that the Länderbahnen would retain their independence under his scheme. The formal plan that he submitted to the states would allow members to decide individually whether they would implement any particular measures taken by the federation.⁴² During the discussion, Prussia, Saxony, and Bavaria all made clear their opposition to the creation of a national railway.⁴³

The government in Munich fully articulated its policy in a briefing to the Bavarian king on 2 July 1918. It recommended that Bavaria participate in von Breitenbach’s proposed association, while preserving complete freedom of action. To this end, the federal administration and the government conference would have to be rejected, the latter because it would reach decisions by majority vote, thereby raising the likelihood that Bavaria would be overwhelmed. Bavaria would also oppose centralized acquisition and standardization of rolling stock in order to assure employment for its own industries.⁴⁴

A revised version of the Prussian railway federation proposal was on the table as the German armies retreated in the west, the armistice was signed, Kaiser Wilhelm II abdicated the Prussian and German thrones, and civil unrest spread through Germany in the fall of 1918. As the state railways disintegrated and their deficits mounted, the perspectives of the state governments changed. The crucial actor was Prussia. It became clear to the Prussian government that German national unity was in jeopardy and that railway unification enjoyed broad popular support. So Prussia altered its position slightly, but significantly. On 23 December 1918 the new head of the Ministry of Public Works, Wilhelm Hoff, suggested to the Prussian cabinet that the Reich buy the state railways. The concession was small because Hoff also proposed that the states retain sovereignty over their systems. The Reich would only set traffic and operating rules, and, conveniently, assume the railways’ debts.⁴⁵ During January 1919, as the losses of the state railways mounted, support for the Hoff’s proposal grew among the other states.⁴⁶

The Reich government, seeing the decline of the railways, the growing disruption of the economy, and its loosening grip on the country, then took action. The cabinet decided to nationalize the state railways if possible even before the new constitution was ratified, and charged Hugo Preufi, Otto Lands-berg, and Matthias Erzberger with handling the negotiations. Erzberger, who took the lead in the group and was responsible for finances in the interim Reich government, anticipated signing individual agreements with each state that owned a railway.⁴⁷ In a meeting with Prussian representatives on 10 March 1919, Erzberger stressed that the wave of strikes and civil disturbances required the immediate unification of the railways under the Reich. He was convinced that the National Assembly, then writing the new constitution, would support this action. He then offered to purchase the KPEV and asked the Prussians to name a price. Hoff replied that he opposed an immediate takeover and had not thought about the price. The Prussian finance minister, Albert Südekum, in contrast, had already stated a fairly low sum during an informal conversation in Weimar. In response to objections from Hoff, Erzberger said that all of the state railways had to come under the Reich, though Preufi raised the possibility of not waiting for Bavaria.⁴⁸ Erzberger also stated that he hoped to complete nationalization by 1 April 1921. Hoff argued that such a complicated action could not be accomplished so quickly. He also warned Erzberger that the 700,000 employees of the KPEV were politically unreliable. Combining them with the personnel of the other state railways would create a body large enough to launch a general strike that would bring down the government.⁴⁹ Then, in a meeting on 12 March 1919, the Prussian cabinet decided to relinquish its railways, but rejected Erzberger’s proposal for a rapid transfer, suggesting instead that 1 April 1924 be set as a deadline. In this meeting, Hoff also laid down conditions for the sale. The railways must continue to be managed according to commonweal principles, the officials would retain their rights, and if the railways were sold or leased to another party by the Reich, Prussia would have the right to repossess its portion.⁵⁰ Here Hoff enunciated issues that would dog both the unification process and the united German railways for years, even if Prussia would not be the party that would press them. Then, in a meeting of the railway states on 18 March, Baden and Württemberg gave urgency to the talks by proposing to move the fusion forward to 1 April 1920.⁵¹ Their initiative found no support among the other states, but it did provide the Reich with an opportunity to pursue its goal of the earliest possible unification.

Through the winter and spring of 1919, the National Assembly worked on a new democratic constitution for Germany. By mid-March it had agreed that the Reich should assume ownership and control of the publicly owned railways. Yet it could not agree to a deadline for the transfer.⁵² In separate negotiations, the National Assembly decided that the states would forfeit the power to impose income taxes, their most important source of revenues, and thereby lose their ability to offset the deficits of their railways. This decision greatly increased the incentive for the states to transfer their systems, or at least the financial responsibility for them, to the Reich.

With civil unrest sweeping the country and railway service failing, the Reich government of Philipp Scheidemann decided on 19 March 1919 to set target dates of 1 October 1920 for reaching an agreement on nationalization and 1 April 1921 for the completion of the transfer.⁵³ Erzberger told representatives of the Prussian Ministry of Public Works on 20 March 1919 that the Reich would proceed without Bavaria if necessary. He also intimated that, in practice, nationalization would mean the absorption of the other railways by Prussia.⁵⁴

In the face of popular demands, growing civil unrest, economic chaos, and the rising railway deficit, the Prussians gradually changed their position again.⁵⁵ On 7 April 1919 the Prussian government reluctantly accepted the 1 April 1921 deadline.⁵⁶ The new Prussian cabinet under Paul Hirsch had ousted Hoff and named Rudolf Oeser minister of public works on the condition that he wholeheartedly support nationalization.⁵⁷ In a meeting with Reich representatives on 25 April 1919, Oeser tentatively agreed to the 1 April 1921 target date set by the Reich cabinet.⁵⁸

In the meantime, the Reich had made its Office for the Administration of the Reich Railways responsible for nationalization, and negotiations at Weimar on the new constitution continued.⁵⁹ Sentiment in the National Assembly was strongly in favor of nationalization. On 28 April 1919 Erzberger presented to the cabinet the final draft of the articles providing for the transfer of sole ownership of the state railways to the Reich by 1 April 1921. The draft provided that if agreement could not be reached through negotiations, a court of arbitration would decide on compensation and the Reich would simply appropriate the railways.⁶⁰ Then, on 10 May 1919 Chancellor Scheidemann charged Erzberger and Preufi with preparing a detailed transfer plan.⁶¹

On 21 June 1919 the new Reich chancellor Gustav Bauer appointed Johannes Bell of the Catholic Center Party head of the Reich Office for the Nationalization of the Railways and Reich colonial minister. On 27 June Bell was also appointed head of the Reich Railway Office, which had observed the operations of the state railways since Bismarck’s abortive unification effort during the 1870s. He was charged with forming the Reich Transportation Ministry (Reichsverkehrsministerium, or RVM) to exercise control over the railways for the national government.⁶² During July 1919 he began planning for the organization of the new ministry.

While the Reich government was moving to create the organizational structures needed for unification, the Allies and the National Assembly acted to shape the railways’ future. The signature of the Versailles treaty on 28 June 1919 partially defined Germany’s obligations stemming from the war. Article 248 of the treaty made Germany’s railways, as well as its other government assets, collateral for reparations. Since the Allies were unable to agree on a final amount, though, the issue was not pressing. On 7 July the National Assembly discussed the railway provisions of the new constitution in detail and passed them in their third reading on 29 July.⁶³ They, along with the rest of the constitution, went into effect on 14 August 1919. Article 89 called for the national government to assume ownership and control of all of Germany’s public railways, and to operate them as a unified system in a commercial (kaufmännische) manner. Article 92 provided that the national railway be organized as an independent enterprise that would pay its operating expenses and service its debt from its own revenues. This provision was a compromise between those who wanted the new railway to be an independently managed, government-owned enterprise and those who wanted it to be an integral part of the Reich administration to assure the influence of the Reichstag over matters such as tariffs and pay, and as a possible prelude to the socialization of the German economy. Consequently, the railway budget would appear as a separate section of the national budget prepared by the Reich Finance Ministry. Article 171 established 1 April 1921 as the deadline for the transfer.

With the new constitution in place, the Reich cabinet approved Bell’s plan to bring the RVM into existence on 13 September 1919. The ministry formally took up its duties on 1 October.⁶⁴ Bell then turned to the urgent matter of negotiating the transfer with the states. He held a meeting with the railway ministers of the seven states at Leipzig on 18 September 1919. He told the gathering that railway unification was necessary for the economic, fiscal, and social healing of the fatherland. Württemberg and Baden, as always more keen than the other states to unify Germany’s railways, called again for bringing the transfer forward to 1 April 1920. The states, unable to agree among themselves what should be done, asked the RVM to hammer out a proposal. The Transportation Ministry agreed, while Württemberg offered to prepare a draft agreement.⁶⁵

The finance ministers of the railway states then met in Bamberg to coordinate their positions on 23 September 1919. They accepted the 1 April 1921 deadline for unification, though only with great apprehension. They feared that the Reich would never actually pay the purchase price, that unification would make the railways more vulnerable to paying reparations, and that the officials would use unification to extort pay raises from them.⁶⁶ In effect, the states wanted to let the Reich pay their debts for them and bear the burden of operating their troubled railways, while they retained actual ownership.

The most stubborn opponent of effective unification was Bavaria. The Bavarians hoped to carve out a privileged position for themselves and retain full sovereign control over their railways. They began by demanding that a special undersecretary of the RVM be named who would sit in Munich and be responsible for the Bavarian system. On 26 September 1919 the Reich cabinet rejected this demand. It proposed instead that the head of the operating division located in Munich be allowed to supervise the other divisions in Bavarian territory as well as his own. If necessary, he could be given an impressive title and receive a pay increase. If the Bavarians agreed to this idea, Carl Stieler of the Württemberg railways would then become undersecretary in the RVM.⁶⁷ The Bavarians accepted this proposal so that they could obtain more far-reaching concessions later. They pursued a strategy of demanding special privileges in order to weaken the unification that they could not prevent. The Reich cabinet countered by attempting to satisfy the Bavarians with the form, though not the substance, of a special position. This policy, in turn, encouraged other states to seek similar privileges for themselves.

Implementing the Reich’s strategy, Bell visited Munich on 2 October and Stuttgart shortly thereafter. He visited Munich again on 28 October. During both visits to the Bavarian capital, in order to move the unification process forward, he assured the Bavarians that a major railway office would be located in Munich, that contracts would be given to the Bavarian rolling-stock industry, primarily Krauss and Maffei, and that Bavarian officials would be able to serve in their own districts. Oeser criticized these concessions and wanted state boundaries to be ignored when setting the limits of the railway’s operating divisions. He pointedly called for open discussions with all parties present.⁶⁸

While he struggled with the states, Bell completed the bureaucratic framework to manage a unified railway. By late October he had named Stieler as his general representative and state secretary and created a headquarters organized into three sections in the Linkstrasse 44 in Berlin. The railway administrative section prepared for nationalization, while the railway supervisory section, based on the former Reich Railway Office, focused on legal issues, international affairs, and peace treaty matters such as reparations. The Traffic Section attempted to overcome the transportation emergency by allocating freight among the various modes.⁶⁹

Despite the efforts of the RVM, the transportation crisis that gripped Germany worsened in the fall and early winter of 1919. Bell and Oeser responded by further centralizing control of the railways, waterways, and roads. The RVM absorbed the Office for the Administration of the Reich Railways and the Reich Railway Office on 8 November 1919.⁷⁰ Oeser resorted to organizational measures that had proved themselves during the war. On 15 October 1919 he created the General Operating Office East (Generalbetriebsleitung Ost, or Gbl Ost) in Berlin modeled on the Gbl West in Essen that had been formed in 1916 and was located in the Prussian Ministry of Public Works.⁷¹ A Gbl South was then organized in Wiirzburg by the Bavarian Ministry of Transportation on 20 November 1919. It was made responsible for all of the Bavarian operating divisions and the divisions in Karlsruhe, Stuttgart, Mainz, Erfurt, and Frankfurt am Main.⁷² The Gbl’s were subordinated to the RVM in Berlin.

A step on the road toward early unification came in a meeting between the Reich government and the minister presidents and transportation and finance ministers of the states in the Reich Chancellery on 21 November 1919. After a long discussion, Oeser admitted that the obstacles to unification in April 1920 as suggested by Baden and Württemberg would be the same as in April 1921. Therefore, he proposed creating a committee to explore accelerated nationalization with the best target date being 1 April 1920.⁷³ Bell quickly exploited this opportunity by presenting a unification plan with a timetable to the Reich cabinet on 26 November 1919. He would expand his ministry by absorbing the railway sections of the Prussian Ministry of Public Works and the relevant sections of the ministries of the other states. The operating divisions would continue their work as before. The 1920 budget for the national railway would simply be a composite of the seven state railway budgets. An agreement for transfer of the railways to the Reich would be negotiated in such a way as to ensure that the Reich would assume ownership of the Länderbahnen with all of their rights and obligations. Current procurement contracts would be fulfilled. The legal rights of the state railway employees would be assured and their pay scales left unchanged. The Reich would assume the states’ railway debts and pay a fair sum in compensation. These matters would be discussed by a committee chaired by the Reich on which all parties would be represented. The cabinet accepted Bell’s plan.⁷⁴ Bell had moved decisively to ensure that the Reich controlled the nationalization process. Yet, in a discussion with parliamentary representatives on 29 November 1919, Oeser, perhaps having second thoughts, raised major doubts about the wisdom of an early unification and insisted that the states participate in the management of the railways even after the Reich had gained control of them. He too doubted that the Reich could afford the purchase price, thus opening the door to postponement.⁷⁵

On 4 December 1919 Bell chaired a meeting in Berlin of representatives of the RVM, the railway states, and the railway employees unions. He stressed that the Reich cabinet had set 1 April 1920 as the target date for nationalization and reminded the delegates that the loss of the war and the confusion caused by the revolution made unification essential. After 1 April 1920 the Reich would have sole power to levy income taxes; therefore, only it would be in a position to bear the losses that the railways would suffer for the foreseeable future. The transportation emergency added impetus to the need to unify. Bell explained that the Prussian Ministry of Public Works would manage the Reich railways under the control of a Reich official. National railway unity, he emphasized, could not be allowed to suffer at the hands of local interests. However, he planned no radical centralization. Instead, the new national railway would have a decentralized organization manned by local personnel. A group would be formed in Bavaria,