twenty-five million francs? The project for a loan was elaborated, but a lender had to be found; moreover, the company had entered into conversation with the financiers of Vienna and Paris, and a veritable financial boycott was decreed. The Minister of Finance, M. Teneff, and the Minister of Foreign Affairs, M. Natchevitch, went together to Vienna in the hope of securing the loan. The financiers, however, threatened to demand the destruction of the work begun on the Tchirpan-Nova-Zagara line as a condition for the re-establishment of Bulgarian credit. The Bulgarian officials obtained but one offer: the renting of the line by the Eastern Railway Company at a ridiculous rental, which meant its indirect but eventual sequestration. They had to promise also that the construction of the parallel line should not be resumed, nor that the construction of any other similar line should be undertaken within twentyfive years. The convention was signed March 15, 1899. Still, the loan could not be realized; the government had to be satisfied with an advance sum of thirty million in the form of treasury bonds guaranteed by the tax on tobacco. And lastly, the Sultan having refused his consent to the repurchase of the concession, it became necessary to heed his decision since he was an interested third party.

The evident result of the negotiation had been to lead the Bulgarian Government to abandon the parallel line and to tie its own hands.

If, moreover, it had been possible to liberate Bourgas, it would have proven an inefficient palliative. For, the trouble was of a wider nature, it had its root in the very fact of foreign operation, according to M. Bousquet: 15

This company treats with the Bulgarian Government as one government does with another. It takes no account of the interests of the country through which it passes, or subordinates them to its own, organizes its services, and establishes its tariff's not with the view of bringing the greatest possible sum of advantages to those regions through which it operates, which, in a new country, should be the object of the administration of a state, but solely with the aim of increasing its receipts. One can not very well blame it for thinking above all things of the dividends

15 Bulgarian Railways, 1910.

of its stockholders, but it is obvious that the interests of a private exploitation do not generally comport with those of a good national

economy.

These economic grievances had exasperated the Rumelian population. To speak plainly, they complained of the unconventional ways of the employees, who could not speak Bulgarian, the little care the company took to please the travellers, the slow speed with which the trains moved, and even the unheard of pretension repeatedly manifested not to accept Bulgarian coin. From the Bulgarian Minister of Finance himself we have been able to gather a number of not lesser grievances: the poor condition of the railways, the notorious insufficiency of artistic buildings, the insufficient power of the locomotives, often incapable of climbing the steep hillsides of the Balkans. The storehouse at Moustapha-Pacha centralized the locomotives and railroad cars on Turkish territory, abandoning Bulgarian stations and letting staple goods accumulate. The danger would even have been greater in time of mobilization. The superstructures not being in condition to carry powerful machines, it became impossible for Bulgaria to transport her troops, and in particular her artillery and convoys. The economic servitude was developing a paralysis of the military power and became intolerable.

These conditions remained the same until within the most recent times; for, when the Turkish revolution broke out, a strike among the employees of the Eastern Railway Company was declared; and communication was completely interrupted. It was reported in Bulgaria that the strike had taken place by order, and that the strikers had received word to that effect from Constantinople. Since this happened about the time of the proclamation of independence, it seemed as if the Turkish Government desired the continuation of the strike which handicapped the Bulgarian Government greatly in the execution of its mobilization. But it was soon learned at Sofia that on the Turkish side of the system work had been resumed in part and that ammunition cars had reached the frontier. The Bulgarian Government, requested to do so by the company, caused the line to be occupied by the troops and replaced the personnel with the

In

officers of the engineer corps of the army (9/22 September, 1908). Shortly afterwards, when the strike had come to a sudden end, the company demanded that the operation of the road be put again into its hands; but this request was met with summary refusal. possession of the railways, the Bulgarian Government meant this time to remain in possession of them. It offered, to be sure, to come to an agreement as to an indemnity, but the company evaded acceptance of this proposition, and preferred to take the matter to Vienna and to Constantinople. The cabinet and the king having in the meanwhile proclaimed the country's independence, the railway question became only one of the features of a still greater difficulty.

It can not be denied that the government had in this matter dealt a real stroke of might which can be justified only by reasons of state. The Bulgarian ministry has ever since tried to make it appear as a measure of expropriation for the public good. This viewpoint might be sustained if one merely affirmed that the public utility of the measure was abundantly demonstrated. It is none the less true that the proffered indemnity lacked one of the essential qualities of expropriation indemnities: it may have been just, but it was not necessary. Besides, it did not constitute expropriation, but withdrawal of a concession; and we can not speak of expropriation when property is not involved. In the course of the long series of contentions engendered by this seizure, an attempt was made to make it appear that Turkey was the proprietor, and the company the tenant; but this was not so. The state is not the proprietor of the public domain; it exercises only the right of guardian or of superintendent whose one particular authority is the right to grant licenses of exploitation, and also to cancel such licenses if public utility demands it. Bulgaria could not have justified her acts except by proving that the eminent right of Turkey had passed into her hands at the time of the Rumelian revolution. To show this it would have been necessary to prove that at the time the transfer of sovereignty, that is to say, annexation had taken place; and this assumption Bulgaria has been unable to uphold in law. She has contended that the declaration of independence accomplished this transfer of sovereignty,

a contention which is inadmissible at a time when this unilateral act which, having nowhere been recognized, must be considered as not having taken place.

Nevertheless, the manner in which Turkey had exercised her right of concession being open to criticism, it became necessary to discuss the subject of a double indemnity, which Bulgaria acknowledged was due the Ottoman Government as grantor and the dispossessed company as grantee.

The first question to arise concerned the date of expiration of the concession. In a contract dealing with a concession, what is generally most important is the exact date when the concession is to begin and to end. But here it was different, since the concession which was granted the Eastern Railway Company was a singular one, a concession rewritten at five different periods, whose point of departure, hence whose duration, could be discussed.

In the first place, an original company, directed by Baron Hirsch, had obtained from the Porte, in 1869, a lease for ninety-nine years for the construction and operation of the railways, and had entered into a contract with the Austrian "Südbahn" for their operation. The proposition made by the building company not being accepted by the "Südbahn," Baron Hirsch formed the same year a separate operating company which should pay to the building company a rental, guaranteed by the Turkish Government, of 8,000 francs per kilometer railway. The building had but just begun when Baron Hirsch succeeded in modifying the agreement: the construction of the system contemplated was curtailed by cutting out all branch roads; and to the operating company he proposed a sharing of the profits to which the Turkish Government would not be a party until the day when all the lines should be completed, and fixing the date of the expiration of the lease at fifty years after said completion. But such became the course of political events that followed that the construction of the system never came to an end, thus leaving the date of the expiration of the lease undecided, and the clause regarding the division of the profits inefficacious. In 1880 the company was reorganized and its headquarters transferred to Zürich. And a little

time afterward, when Turkey was in need of money, the company made a loan to Turkey of twenty-three million francs at 7 per cent., on condition of a new division, final this time, of the profits.

This new arrangement of December 10, 1885, still refers to a lease for fifty years, but entirely omits to state the date of its beginning. Afraid that it would incur the hostility of the Bulgarian Government, the company in this contingency improved its opportunity when the Porte was again in need of money, and by a new agreement in 1893, approved by the Iradé of February 15, 1894, raised the previous loan of twenty-three million to forty million francs, in consequence of which it was stipulated that the railway system should now be considered as completed, and that the term of the lease should run for fifty years, beginning January 1, 1908. In reality we are here dealing not with a lease of fifty years, but with one of eightyfour years duration, if we bear in mind the year 1874 when all construction work ceased; but of seventy-eight years duration if we go back to 1880 which is the year when "The Company for the operating of Eastern Railways," was formed. Anyhow, in spite of the period of fifty years originally fixed for the lease, it can not be doubted that the Turkish Government is legally bound until 1958, since it has stipulated so expressly.

But while the Bulgarian Government acknowledges that it must indemnify the company for having been dispossessed, can it be said that it must accept the term of this lease? Has the Rumelian branch of the system at any time escaped control by the Government at Constantinople? This has been maintained in Bulgaria where the conventions of 1872-1874 and the convention of 1880 alone are held to oppose the Government of the Principality, that is to say, Bulgaria declares that the term of the lease covers a period of either sixteen or twenty-four years.

To sustain this view, it has been said that since 1879, the Sultan no longer had the power by himself to grant exploitation rights. This, in our judgment, is an error.

Article XXI of the Treaty of Berlin declares that the rights and obligations of the Sublime Porte regarding this particular railway