§ 220. “Acquisition…of any Railways.”
The railway question was one of the first practical problems which received the attention of the Federal Convention at Adelaide. It was generally admitted that the railways, being the arterial channels of communication between the colonies, were intimately connected with trade and commerce, and that it would be useless for the Constitution to declare that trade and commerce between the States should be absolutely free if the States were allowed to continue to impose preferential or differential railway
― 644 ―
rates, which would materially interfere with the freedom and equality of trade. It was also perceived that the railways were valuable assets, associated with and forming the main tangible security for the public debts of the colonies; and that the transfer of the railways from the States to the Commonwealth might have to be accompanied by the transfer of the public debts.
Two propositions were formulated in the course of debate; the first was that the Commonwealth should, within a specified time, and regardless of the wishes of the States, take over and federalize the public debts and the railways; the second was that the railways should remain the property of the States, and should be managed by them, but that they should be subject to limited federal control, so as to prevent any derogation from freedom and equality of trade, and so as to guard against preferences and discriminations in traffic rates and traffic arrangements, which might indirectly prejudice that freedom and equality. The Convention accepted the solution of the problem suggested by the policy of limited federal control, which is expressed in secs. 98, 99, 101, 102, 103 and 104, of this Constitution.
A distinct proposal was submitted by Mr. J. T. Walker, that “the Parliament shall take over the whole of the railways of the several States, excepting Tasmania and Western Australia if they desire to be excepted, and each State shall be charged with any deficiency or credited with any net profits on the working of such railways.” The resolution found so little support that it was withdrawn. (Conv. Deb., Adel., p. 1176.)
At the same time it was considered prudent to authorize the Federal Parliament at any time to acquire the railways of a State, with the consent of the State, on fair and reasonable terms, and also to allow the Parliament to construct or extend railways within a State with the consent of the State. This idea, first suggested by Mr. R. E. O'Connor (Conv. Deb., Adel., p. 60), was afterwards presented by Mr. W. McMillan, in the form of the sub-section which is now under consideration. (Conv. Deb., Adel., p. 1199.)
The subjoined return, prepared by Mr. J. J. Fenton, Assistant Government Statist of Victoria, shows the mileage and cost of railways in the various colonies up to the year ending 30th June, 1899:—
| — | Miles. | Capital. | Revenue. | Cost of Working. | Interest. |
| £ | £ | £ | £ | ||
| New South Wales ... | 2,707 | 37,992,276 | 3,145,273 | 1,690,442 | 1,377,950 |
| Victoria ... ... | 3,143 | 38,974,410 | 2,873,729 | 1,716,441 | 1,472,090 |
| South Australia ... | 1,870 | 14,042,007 | 1,073,155 | 634,755 | 503,705 |
| Queensland ... | 2,746 | 18,670,208 | 1,373,475 | 784,811 | 768,333 |
| Western Australia ... | 1,355 | 6,427,370 | 663,220 | 712,329 | 207,257 |
| Tasmania ... ... | 438 | 3,585,040 | 178,180 | 141,179 | 140,881 |
| Total ... ... | 12,259 | 119,691,311 | 9,307,032 | 5,679,957 | 4,470,216 |
By virtue of this sub-section the Federal Parliament may, at any time, take over the whole or part of the railways of a State subject to the conditions (1) that the State through its legislature consents, and (2) that the terms of the acquisition and transfer are arranged to the joint satisfaction of the Government of the Commonwealth and the Government of the State concerned. In this manner the whole of the State railways could, eventually, be transferred by the States to the Commonwealth.
― 645 ―
51. (xxxiv.) Railway construction221 and extension in any State with the consent of that State:
HISTORICAL NOTE.—The report of the Committee of the Privy Council in 1849 proposed that the General Assembly should have power to make laws as to “The formation of roads, canals, and railways traversing any two or more of the Colonies.” (See p. 85, supra.) The report of Wentworth's Committee in 1853 contained a similar provision (See p. 91, supra) Wentworth's Memorial in 1857 proposed that the Federal Assembly should have power with respect to the gauges of connecting railways. (See p. 94, supra.)
At the Adelaide session in 1897 Mr. McMillan proposed a new sub-clause: “Railway construction and extension with the consent of any State or States concerned.” This was agreed to. (Conv. Deb., Adel., p. 1199.)
At the Melbourne session, a suggestion by the Legislative Council of New South Wales, to insert “but only” after “extension,” was negatived. Mr. Deakin called attention to the vagueness of the word “concerned,” and the sub-clause was amended to its present shape. Mr. Reid objected to the whole sub-clause, unless restricted to defence purposes, as a dangerous temptation to the Commonwealth, but after debate withdrew his opposition for the time being. (Conv. Deb., Melb., p. 163–80.)