9
Socialism in Six Colonies
The Aftermath
Jonathan Pincus
In 1890 the Australian colonies collectively operated by far the largest
government-built, government-owned, and government-operated railway sys-
tem in the world.^1 That year was marked by a severe economic downturn
sparked by the Argentinian government’sdifficulties in meeting guarantees to
the private railways that British capital hadfinanced. Such capital had also
financed railways in Australia, Canada, India, and in the USA. But only in
Australia was government then a significant owner of railways—making all
capital and operational decisions, with profit or loss assumed by the taxpayer.
Other substantial government-owned or operated rail systems were in Germany,
Canada, and little Belgium, thefirst the result of nationalization after the war
with France in 1870, and further nationalizations in the 1880s. But for perspec-
tive, the USA and Great Britain, with scarcely any publicly owned lines, around
the First World War accounted for over half of the world’s railway capital and
activity (Acworth 1920). In many countries with substantial private rail systems,
governments provided assistance through rights of way, land grants, monopoly
charters, tax concessions, cash subsidies, subscriptions to capital raising, and
guarantees of interest and dividends; and often government reserved the power
to regulate freight rates and fares or to demand repayment of assistance, if profits
were deemed excessive. But in Australia governmentsownedand built them.
Australia, then, followed its own special way, and continued doing so: for
although through the first half of the twentieth century other nations
(^1) In 1891 Australia had over 15,000 km of track (Ergas and Pincus 2014, p. 228). The other large
state railways were Canada’s Intercolonial Railway, of about 1,100 km, and that of Prussia, which
by 1886 had, largely by nationalisation, reached a length of 20,050 km (Bradford 1907, p. 69).