Looking at the historical development of the German railroad network, one can identify several stages of development. The primary stage involves the period when the original concept of building railways evolved and the first linkages of local importance were realized. This chapter shows that the development of the German railways was a sober economic affair of local interests. Until the 1830s, the German economy was clearly dominated by agriculture, with up to 80% of the workforce engaged in food production. A critical point was reached in the 1920s when the railways came under competitive pressure from road haulage. The rise and fall of the German railway system suggests some interesting conclusions. The growth of urban agglomerations and conurbations was connected with the building of the railway system. The railways became the necessary precondition of economic development and proved to be very profitable themselves.