ts 
6. It is apparent from these 
statistics that the capital employed, 
judged by the earnings, which, during 
the past five years, have on the aver 
age only provided about 3% per cent. 
interest on it, cannot be considered ag 
worth its nominal amount as an in- 
come-earning asset. On the other 
hand, it is only fair to bear in mind 
hat more than two-thirds of the ‘cost 
of construction was incurred prior to 
the increase in the general level of 
prices consequent upon the war, and 
that, therefore, the capital value of 
the railways to-day is probably higher 
than the amount expended in their 
sonstruction, even after making due 
allowance for depreciation. It is well, 
also, to remember that at the time of 
the construction of the majority of the 
railways, neither the present coscs of 
labour nor the present rivalry of 
motor services could reasonably be 
anticipated. Further, it is necessary 
to remember that in the development 
of a new country with distances so 
vast as those in Australia, railway con- 
struction may have been in the past 
iustifiably undertaken as an alterna- 
tive to road construction, i.e., as a 
provision for transport essential to the 
development of the country, but which 
might ‘not become directly remunera- 
tive for long perieds, and, indeed, 
might ultimately only become in- 
lirectly remunerative, as is the case 
with roads. Finally, it must be 
remembered that the railways have 
sometimes been made to serve State, 
rather than business purposes, by 
:arrying goods at unremunerative 
rates, and thus subsidizing the indus- 
‘ries affected. . 
7. It must not be inferred from 
what we have just said that we 
entirely approve of the policy adopted, 
but we wish to avoid the reproach of 
criticizing after the event, and we 
recognize that it may have been 
reasonable for Governments in the then 
existing conditions, subject as they 
were to pressure from all sides to pro- 
vide railway facilities for the purpose 
of development, to undertake the con- 
struction of some lines which have 
been long in reaching a paying stage, 
and may indeed never arrive ihere. 
But whatever may have heen +he 
14992 
notives governing past railway con- 
truction, we recommend for the 
uture, especially having regard to the 
»ossibilities of motor transport, that 
10 further construction of State rail- 
vays should be undertaken except 
Jfter a full investigation by some in- 
lependent authority, and unless it is 
hen considered that the proposed rail- 
vay is the most efficient method of 
roviding the requisite transport 
‘acilities, and likely to give within a 
‘easonable period, either directly or 
ndirectly, a commercial return upon 
he capital invested. 
8. We are not unmindful that argu- 
nents can be advanced for the con- 
struction of railways for such purposes 
1s saving stock hy their transport 
‘rom pastoral areas during periods of 
irolonged drought. We would instance 
he proposals made in the Report of 
he Federal Pastoral Advisory Com- 
nittee, dated 18th May, 1928, for a 
“ailway to join Blackall in Queensland 
vith Charleville, and for a further 
ailway to join Cunnamulla with 
3ourke in New South Wales. The 
rest estimate that we have received 
of the probable cost of a line from 
3lackall to Charleville is abcut 
22,000,000, and it is very hard to sup- 
rose, since it would have very little 
reight to carry except in times of 
irought, that what it would have to 
:arry in such times could come uny- 
vhere near to paying for the cost and 
naintenance of the line. A calculation 
f the freight charges which would 
1ave to be made per head for the 
rarriage of sheep in such times, if the 
-ailway line was to be self-supporting, 
vould reveal the economic difficulty of 
-he project. 
9. We therefore think that any such 
laim should be resisted unless the 
vasboralists who are thereby to be 
enefited are themselves prepared to 
ruarantee a fair return year by year 
m the capital employed in the con- 
struction of a railway for such a pur- 
sose. They are the persons who are 
rimarily benefited, and the com- 
nunity at large should not be ex- 
rected to pay for what in effect 
umounts to an insurance of their stock 
wgainst periods of drought. Here we 
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