problematic climate and the onset of drought. The company had limited
knowledge of the land or its economic potential. The potential to build a
port in the shallow coastal waters of the Gulf was limited, to say the least.
Yet other attempts to facilitate private investment through the land-grant
model supported by government guarantees failed to get off the ground in
NSW and Victoria, forcing the burden for railway development onto the state
(Ergas and Pincus 2015).
Government entry into railways in Australia to the exclusion of private can be
explained in ad hoc terms (Butlin 1959, p. 40). The consequence for the pattern
of railway development, however, was profound, as John Foster Fraser observed
in 1911. In Australia, railways followed settlement; in North America it led it.
In 1891 the Victorian Minister for Lands told the Select Committee upon
the Settlement of the Mallee Country:
I am afraid it is hardly practicable that the railway should precede settlement....The
country has been always anxious to have some guarantee that there would be a fair
traffic when the line is opened, but I think they should go on simultaneously...there
would be no difficulty in getting an increased price for the land where there was a
guarantee of railway construction and water conservation. (Cited in Dunsdorfs
1956, p. 163)Political, rather than economic, considerations came to the fore.‘The taxpayer
has tofind the money; naturally he wants the railway to come near him’,
wrote Fraser (1911, p. 163). Variations in rail gauges, in some cases even
within states, presented a further obstacle to national development:
The present lines were constructed with as little consideration for the benefit of the
whole continent as a railway in Finland would be built with consideration for the
benefit of Italy...
That the confusion of present system is detrimental to pastoralists, agricultural-
ists and traders generally will not deny. As there is no competition, there is no
choice of routes, and the State Government does much as it likes.
(Fraser 1911, pp. 109–11)Cost, logistical barriers, and the failure to use railways to drive new settlement
meant that, by the turn of the century, Australia was far less able than the USA
and Canada to adapt to bulk handling.
13.5 Elevator Tycoons
The contrast in railway development in the two continents is matched by a
closely connected contrast in the deployment of grain elevator.
The story of grain elevators in the USA might be said to start with Frank
H. Peavey arriving in Sioux City, Iowa, in 1866 with a dollar in his pocket,
Nick Cater