Railways in Australia, as in many other countries, were built to a variety of gauges, depending upon the industry involved, geography of the area, perceived relative costs, engineering preferences, and political considerations. The result in Australia was a transportation nightmare with change-of-gauge, and transhipment hassles, both within and between states.
There are many stories about how 4' 8.5" (1435mm) was chosen as a gauge but most relate to the ruts in the old Roman roads, the result of chariots and later wagons built to be hauled by two horses working side by side. More credible, the gauge likely resulted from one of the first railed systems which had a gauge of 5' to the outside of the railhead and operated with outside flanges. However an inside flange works far better, and when wheels were reversed the result was an inside gauge of 4' 8.5".
George Stephenson chose 4' 8.5" for the first British mainline railway because it was the standard for the colliery railways where he had worked. This gauge was eventually mandated as a 'standard' by the British government.
The adoption of a 'standard gauge' resulted from the need for interchange of goods and equipment from one system to another. While what was the 'standard' in any country might be different, the adoption of 4' 8.5" as a more or less world standard was the result of industrialisation, economics, and politics.
In general, the broader the gauge, the greater the stability and the wider (and heavier) the load that can be carried safely. The actual weight that can be carried on a particular rail gauge is then a function of the number of wheels, the weight of the rail and the quality of the related track structure. A broader gauge requires a more extensive roadbed and a larger turning distance, thus a greater cost.
Narrow gauges... ranging from roughly 12" to 3' 6"... were adopted as a lower cost alternative, particularly for industrial and development railways. The narrow gauge mountain railways (Colorado and Darjeeling, for example) are perhaps the best known to the general public but narrow gauge railways were found in many areas of the world, even as common carriers.
The choice of gauge had far reaching implications for the size of equipment, capacity of wagons and carriages, tractive power of locomotives, etc. Many of the world's narrow gauge railways might use a different gauge if built today, but their survival into the modern world indicates many of their limitations have been overcome.
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