I 8 STATE BORROWING. 



interest on borrowed or invested Capital, the Railways, 

 according to this restrictive view, are productive ; if the 

 working receipts fail immediately to wholly cover both 

 charges, they are deemed to be unproductive, a loss to 

 the country, and a menace to its financial stability. This 

 reasoning is obviously faulty. 



To the Country as a State, or to its Producing In- 

 dustries or Consumers, the whole of the freight charges 

 of a Railway, regarded as an item of State revenue — 

 even though covering working 'expenses and interest on 

 Capital — form the merest fleabite as compared with the 

 actual immeasurable indirect value, added to the 

 country's wealth-producing industries. 



The principal additions to the wealth of the country 

 due to Railways are derived as follows :— 



(i). By the saving of time and of cost of transit. 



(2). By giving commercial value to vast natural 

 products hitherto lacking value, owing to lack 

 of cheap modes of transit. 



(3). By the impetus given to the creation of fresh 

 wealth in areas formerly barren or unproduc- 

 tive. 



To estimate the " Wealth of Exchange " added to 

 any country — especially a State with vast areas of virgin 

 soils — would be a difficult matter. We may know this 

 wealth to be great in itself, and vastly of greater im- 

 portance than the possible revenues of the Railway in 

 itself as an undertaking, but we have no direct means 

 of ascertaining its value quantitatively. Items (2) and 

 (3) can only be vaguely guessed at. But the wealth and 

 other advantages gained by saving time and labour (i) 

 through the improvement in means of transport can be 

 very closely approximated. 



The gain from this hidden cause, although of neces- 

 sity not seen in the receipts of the Railway regarded 

 as an undertaking, becomes at once apparent when we 

 try to realise the difference in cost of transport as be- 

 tween the Railways now in operation and the more im- 

 perfect means in conunon use on bad roads prior to 

 their introduction. 



