Popular objections to the overhead system are not, of course, quite dead. Every tramway proposal in districts where the trolley has not already penetrated is still opposed on the ground of disfigurement and danger. This opposition serves as an index to the severity of the struggle which the advocates of the trolley system had to encounter before they made it almost universal in large cities. But the dislike of the public for a questionable novelty was not the sole reason why electric tramway enterprise was backward in Great Britain.

It is not strictly accurate to say that electric tramway enterprise was backward. The enterprise was there, in spirit, but circumstances were very much against it. Tramway schemes are controlled by special legislation which was passed before electric traction was contemplated; and this legislation has not been amended in any material degree to suit the altered conditions brought about by the use of electricity.

The Tramways Act, 1870—which is the master Act of the situation—was framed at a time of reaction against public monopolies. Before that time, gas, water, railway, and other companies had been granted statutory powers in perpetuity; and when a local authority wanted to take the supply of gas or water into its own hands, it had to buy the existing undertakings at the valuation put upon them by the owners themselves. There were frequent complaints about excessive purchase terms, and also about extortionate rates charged by the monopolist companies. Consequently, when horse tramways came on the scene, the legislature determined to put the new 'monopoly' on quite a different basis. The Tramways Act provided, first, that no application for tramway powers would be so much as considered if it did not gain the consent of the local authorities interested; second, that the period of tenure should be limited to twenty-one years; and third, that the local authorities should have the option, at the end of the period or at seven-year intervals afterwards, of buying the tramway undertaking at the 'then value' of the plant (rails, horses, cars, depots, etc.) without any allowance for compulsory purchase, goodwill, future profits or any other consideration whatsoever.

This Act was passed with the very best of intentions. It had the advantage of substituting, for the costly and clumsy procedure by Private Bill, the simple and cheap process of applying to the Board of Trade for a 'Provisional Order' which would acquire the full force of an Act when ratified (in a more or less automatic way) by Parliament. But in spite of its good intentions it proved a serious stumbling-block, especially when electric traction was proposed.

The effect of the limited tenure system, with compulsory expropriation on what were called 'scrap-iron' terms, was to make the companies very reluctant to spend one penny more than was absolutely necessary during the concluding years. Capital expenditure on improvements in equipment was regarded as out of the question, since there was not sufficient time to recoup the difference between first cost and the 'then value' at the purchase period. Money was grudged for the upkeep of track, the repair and painting of cars, and the hundred and one items of expense which are essential to a well-conducted tramway. System after system fell into a state of shabby gentility, hoarding money against its inevitable end.

This was the condition when, in the middle eighties, electric traction was suggested. The public, suffering from the decay of the tramway service, but not realising that the cause lay with an Act devised for the public benefit, expected the tramway companies to adopt the new mode of propulsion. But as the conversion to electric working involved track-work costing several thousands of pounds per mile, and new cars costing several hundreds each, together with a large generating plant and new car depots, the change was commercially impossible to companies which were forced to retain their old horse equipment in order to realise something for the shareholders in the day of expropriation. From these causes there arose a demand that the municipalities should take over the tramway systems and do what the companies appeared too slow to undertake.

Thus a strong impetus was given to municipal tramway enterprise. But this impetus did not remove the causes of delay. The local authorities had good economic reasons for waiting until the existing tramway leases ran out and so enabled purchase to be made upon the most advantageous terms. They were also obliged to move very cautiously in adopting so radical and so novel a change as electric traction. Municipalities are not speculative traders, who are ready to take risks after a rapid expert investigation of a new policy. Further, no municipality likes to accept the decision of another as valid for its own district.

The consequence was that each municipality thought it necessary to get its own expert report on the subject and, in many cases, to send its own deputation to inspect Continental tramway systems. These preliminary studies, with debates in Council chambers and newspaper columns, with public meetings of encouragement or protest, and with the erection of experimental lines, took up so much time that little of a substantial nature was done until several years after engineers were ready and willing to carry out the conversion of large systems of horse tramways to electric working.

The municipalities, however, were not the only forces at work. Towards the year 1896, when a large number of tramway leases were running out, a considerable amount of business was done by private capital in buying up horse tramways with a view to conversion and also to extension far beyond the limits of the existing routes. The essential condition of the success of such enterprise was, of course, the renewal of the tenure of the tramways for at least another twenty-one years. Here—and in the accompanying applications for extensions of route—the true inwardness of the Tramways Act was shown. Everything was in the hands of the local authorities. They had only to withhold their consent, and nothing could be done. And this power of veto enabled them to drive any bargain they pleased with the promoters of tramway schemes.

Most electric tramway proposals covered the areas of several local authorities, so that negotiations had to be entered into with each in turn. The municipalities, being the guardians of the public interests, considered it their duty to impose the heaviest conditions which the promoters could be induced to accept, rather than abandon the enterprise. It was a case of Hobson's choice in every parish. In some instances direct payments for wayleaves were demanded. In others the promoters were forced to bear the cost of street widenings and other 'public improvements' which were not always necessary for tramway purposes. In nearly every town the fares and stages were determined by the local authority—on the strength of the veto, not on commercial principles. The cost of construction was frequently increased by onerous conditions regarding the standard of overhead wire and track work. Under the Tramways Act, tramway companies were compelled to maintain the roadway between the rails and also outside for a space of eighteen inches—a provision which was sensible enough when horses were used. But the condition was not only enforced within these statutory limits when the promoters were about to use a form of traction which spared the road surface; it was extended in numerous cases to an obligation to pave the entire roadway and to maintain it—often with expensive wood paving where macadam had previously been considered quite good enough for the traffic.

One effect of this state of affairs was delay. The preliminary negotiations with local authorities—the interviews with mayors, aldermen, councillors, town clerks, and borough surveyors, to say nothing of the 'frontagers' along the line of route—usually occupied far more time than the actual construction of the tramways. They were also much more troublesome, since it was within the power of a single local authority in a central position to 'hold up' a complete scheme, while most districts had strong local patriotism and wanted a municipal system to themselves. Very little is known by the general public of the anxiety, difficulty, and expense attending such negotiations with local bodies divided into parties or cliques and furnished with an absolute power of veto. Looking back on the history of electric traction, it really seems extraordinary that engineers and financiers had the patience to undertake this work and carry it through. Their reward, as will be seen, was not great in a pecuniary sense; and, as regards reputation, they are generally accused of being extravagant, avaricious, and wanting in enterprise.

The ultimate effect was that the actual cost of electric tramways exceeded the estimates prepared on the basis of Continental and American experience. The more prolonged and difficult the negotiations preliminary to a scheme became, the greater the expense. And the conditions imposed by local authorities as the price of their consent loaded the capital account of electric tramway undertakings with items which had no direct concern with the tramway. The Board of Trade assisted the increase in cost by prescribing a standard of construction which was higher than that allowed in other countries. The net result has been that while electric tramways were expected to cost about £9500 per mile, they have actually cost over £12,000 per mile.

The revenue side of the account has also been affected by the power of veto. A local authority has no hesitation in imposing low fares and long stages (with high wages and short hours for employees) upon a tramway company seeking its consent. The standard usually adopted is that of large urban systems with dense traffic, so that systems in scattered districts are often unfairly treated. In municipal systems themselves the fares are apt to be determined by the promises of councillors at election times rather than by the simple consideration of a fair price for improved traffic facilities. Workmen's fares, for instance, are a dead loss on practically every tramway system. Every now and again there is an agitation for halfpenny fares, for the extension of stages, for cheap rates for school children, for free transport for the blind, and so on. A leading municipal tramway manager once remarked that it was almost impossible for men in his position to resist the pressure for such concessions, especially at local election periods. The chairman of the Highways Committee of the London County Council recently stated that never a day passes without some appeal for concessions in tramway fares.

Most of the large urban systems are under municipal control, and therefore they have the rates in reserve, as well as the most favourable traffic conditions, to encourage them in giving the public more and more for less money. But the tramway companies, working for the greater part in less thickly populated areas, with no extraneous means of making up losses, are put in a difficult position when similar concessions are forced upon them. The upshot is that the average return on the capital of electric traction companies amounts to only 3·41 per cent. Better profits were, in fact, made in the horse tramway days; and the electric traction industry is a fine example of the way in which the enterprise of engineers and capitalists may bring little comfort to themselves but enormous benefit to the public, which shows its gratitude by asking for greater blessings at their expense.