My dear P.M.,

I have found myself lately spending a good deal of time with Sir
Charles Nathan [1] on the North Australia Scheme, which I think is
progressing slowly. [2] It occurs to me that the development of
the 100-ton tracked roadless train [3] is opportune and may be a
distinct factor in the transport side of the question. Indeed, I
think it will not be far from the truth to say that practically
the whole problem of North Australian development is a transport
one. The anticipated capital expenditure on the railways in North
Australia is appalling and they will not pay a penny of even the
interest charge for very many years, which will mean a big
interest bill to offset against the development. The problem seems
to me to represent a first-rate opportunity to develop the
roadless train, which promises to be able to fulfil the transport
requirements of the North for many years.

McDougall [4] tells me that the Empire Marketing Board has today
agreed to find 60,000 (one half) of the development cost of the
roadless train. It will be, I expect, 2 or 3 years before the idea
reaches a practical stage. All I want to suggest now is that we
should not commit ourselves firmly to this big railway scheme
until we know what the performance and the promise of the roadless
trains are to be.

Sir Charles Nathan is in the state of mind that he visualises the
roadless train as suitable as a feeder for distances of a couple
of hundred miles for a main Railway, but he cannot see it taking
the place of the main Railway. That is as may be. If the roadless
train is of any use at all, it could provide a skeleton transport
service over the whole of North Australia, carrying quite
sufficient tonnage to serve the needs of the Territory for some
years at least, and at an inappreciable capital cost as compared
with the formidable millions that a railway would entail. As you
know, the cost of 6d. per ton mile is being aimed at as an
economic cost figure for the roadless train. Even if the interest
charges of a railway were to be borne by the Commonwealth
Government, I expect that 4d. a ton mile would mean an additional
loss.

I feel strongly that we should, if necessary, contribute
substantially towards the development of the roadless train so as
to expedite the practical stage of having a machine in Australia
to experiment with. And, further, that we should have well in our
minds the possibility of exploiting this roadless train scheme to
the utmost, both in North Australia and elsewhere where
developmental railways are needed to go in advance of settlement
to encourage and promote it.

I am, Yours sincerely,
R.G. CASEY