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Rh operation; of approving contracts involving more than five hundred thousand francs; of ratifying the appointments of chiefs of service, and the fixing of their compensation within the limits of the law and the budget; of the determination of the general conditions on which persons employed shall be engaged; and of examining propositions relative to the construction of new lines and the modifications that may be needed in legislation respecting the federal railroads. It further had the naming of a permanent commission charged with the preliminary examination of affairs—of six members—of which its own president was the chairman.

The general direction was composed of from five to seven members to be named by the federal council, sitting at Berne, holding office for six years, and having its president and vice-president chosen by the federal council. To it, subordinate to the federal authorities and the administrative council, was given the work of management, the preparation of the annual budget, the establishment of the accounts, the making of the report of management, the preparation of the business to be submitted to the administrative council, the carrying out of the directions of that body, the preparation of regulations, tariffs, and time schedules; the control of the receipts from working and the material; with the making of agreements subject to the ratification of the administrative council, and the appointment of functionaries who are directly responsible to it.

The federal system was divided into five arrondissements, localized at Lausanne, Basle, Lucerne, Zurich, and St. Galle; with at the head of each arrondissement an arrondissement directory of three members appointed by the federal council, each administering the arrondissement of which it is in charge. These directories were each supplemented by an arrondissement council of four members appointed by the federal council and from eleven to sixteen members by the cantons constituting the council. The creation of these supplementary councils was a concession to the federalists, but more apparent than real, for the functions conferred upon them were extremely modest, and consisted in giving their opinion on questions relating to the railroad service, approving of the annual budgets and accounts prepared for submission to the general directory, determining upon all credits not exceeding one hundred thousand francs not provided for in the annual budget, approving the reports of the arrondissement directories, and the right conferred upon each of them to appoint one member of the administrative council.

The organization of the future federal railroads, therefore, notwithstanding the apparent concessions to the cantons, was strongly centralized. All important decisions were placed under the control of the general direction and the arrondissement directions, the