ABSTRACT
One of the most important reasons for the railways' financial collapse has been the lack of any countervailing force within the organisation to offset the understandable pressure which builds up from the operating departments for investment in the latest and most modern types of equipment. A self-finance obligation would help to ensure that the railways developed more effective internal procedures to appraise such investments, and to eliminate those whose returns would be insufficient to justify their costs. If some special investment opportunity were to arise for which the railways were unable to provide the necessary finance, it would always be open to the Government to pass a special enabling Act, and for the Board to borrow from the market without a Treasury guarantee. The most obvious candidate is that part of the railways' traffic which originates and/or terminates at rail-owned terminals.
