The Impact of Railways on Spain’s Economic Modernization
Railways: Ideas: The theme of the text is to encourage the introduction of the railroad in España. The hierarchical main ideas: “Leadership is for government, but it also allows for private initiative.” Whoever wishes to obtain some concession should not apply only to the government but must adhere to a series of conditions. “The government guarantees a number of benefits to those who wish to invest in this medium of production. Taking into account the uniqueness and selection of the articles, the main ideas of each of them are pointed out. Article 4 indicates that the construction of railways, when service can usually be done either by the government or by individuals and companies. This reflects one of the basic principles of progressive liberalism to “liberalize” the sector, although it is indicated (Article 6) that to do so, one must request permission from the government itself, in whose hands is the concession. “The clear intention of the government to encourage the railroad is clearly seen in Article 8, which approved various forms of subsidy for those companies or individuals that decide to do so. Specifically, it identifies three: working with the government itself, returning part of the capital invested, or assuring a minimum capital investment. Article 19 refers to ensuring that foreign capital is employed in the railway under the protection of the state itself to be exempt from retaliation, confiscation, or seizure during periods of war. “Article 20 includes a series of concessions or benefits for companies that obtain a building permit: the public arena as required; having the same benefits as the residents while they are raising the railroad; authority to establish and operate quarries to obtain as much stone as needed; collect tolls and transport, and especially duty-free materials (raw materials, machinery, energy sources, etc.) that are imported from abroad, not only during the construction of the line but in the ten years following. Finally, all railways have a particular gauge that has to be one meter and 80 centimeters. We know that the European gauge was shorter. The fear that the railway would be used as an instrument of invasion led to this decision, which would burden the economy for many years.
3. CONTEXT One phase of the government of Isabel II was the progressive biennium (1854-1856). Initiated by the general pronouncement on Vicálvaro O’Donnell, the military coup was radicalized after the publication by the rebels of the Manifesto of Manzanares, which garnered broad popular support and urged other generals to join the rebellion. Finally, the coup succeeded and led to the formation of a government headed by the progressive Espartero. Although short-lived, it achieved fruitful results. We emphasize the general confiscation of Madoz in 1855 that ended the repayment process, with the assets of the municipalities. A new Constituent Cortes began developing a more progressive constitution that was not implemented, and finally, steps were taken to promote the country’s economic modernization, such as the Railways Act of 1855. During the second half of the nineteenth century, Spain, like many other countries, experienced intense activity around railway construction. At the beginning of that period, only the line from Barcelona to Mataró, 28 km in length, had been opened in 1848, followed by the Madrid to Aranjuez three years later. The laws from 1855 to 1877 governed the development of buildings. The first, enacted during the progressive biennium, was the Railway Act of 1855, which was a key driver of network development. This Act facilitated the recruitment of foreign capital needed to carry out the construction, even at the expense of sacrificing the interests of some sectors of Spanish industry, such as steel. Under this law, the concessions would be granted by law, and it also established a grant program to procure the necessary resources (Law on Banks of Issue and Credit Societies, 1856). Under this Act, the Society of Real Estate Credit (after which they were the Pereire), Spanish Society Commercial and Industrial (Rothschild), and General Credit Company of Spain (Guillot) were designed to stimulate industrial development. These companies eventually focused on the railways, dedicating 40% of their investments to this sector.