Capital was needed to found the railway company and build the Gornergrat Railway. When it came to procurement, the initiators relied on persuasiveness and the daily newspapers.
After the concession was granted in 1895, the difficult phase of raising money began. Friedrich August Volmar, a Bernese transport politician and professor of traffic law, writes in his Gornergrat Chronicle: “It wasn’t until 1896 that the initiators – including Gottfried Kunz, at the time a notary in Biel but who later became Chairman of the Board of Directors for many years and also a Bernese Cantonal Councillor – were able to secure construction financing of CHF 3.5 million (CHF 2 million in shares, CHF 1.5 million in bonds) in conjunction with the Swiss Bank Corporation and the Berner Handelsbank and found the joint-stock company of Gornergrat Railway with its registered office in Sion on 11 June 1896.”
Broad shareholder search
In order to find investors, the Gornergrat Railway placed full-page advertisements in various Swiss daily newspapers. In the advertisements, they explained the project, the financing and the prospects of success, among other things.
In an advertisement published in the Tagblatt newspaper of the city of St. Gallen in May 1896, they aimed to impress with the expected operating results: “The profitability calculation for the Railway is very simple, as it is based on the number of passengers transported by the Visp-Zermatt Railway to Zermatt.” For the first year of operation, the company expected around 30,000 travellers and income of CHF 316,000. Shareholders were promised a dividend of 6%.
Targets not reached until years later
In the first financial year of 1898, the railway was unable to reach its planned transport targets due to a 50-day delay in opening. The Railway transported only 10,590 people, the operating income amounted to CHF 86,000 and the loss CHF 18,000. No dividend was paid. By 1899, however, the Railway was already transporting 34,400 passengers, operating income had risen to CHF 270,000 and shareholders received a dividend of 3%. In 1899, the Railway thus partially reached its goals. The railway distributed a dividend of 6% for the first time in 1906.