The Railroads and the State During the Nineteenth Century

The ascension of the railroad starkly illustrates the dichotomy between Britain and the United States and Continental Europe regarding the role of the State. In contrast with their British and American counterparts, French policy makers never viewed the railroad as a wholly private undertaking. Continental Europe considered the railroad as a public service and railroad fees and rates were often connected with the tax system rather than a payment for a service rendered; occasionally, the State treasury administered railroad finances. During the nineteenth century, the United States and Britain regulated railroad rates. In the United States the railways, like all other businesses, and until regulation intervened, charged what the traffic would bear. Small private railroad construction companies were born with a high mortality rate. Even during the building phase, contemporaries criticized the laissez faire state policy towards the railroads.