The over-capitalization of the roads has a most direct bearing upon the interests of the public as well as upon investors in the bonds of the road. Attempts to reduce fares have repeatedly been frustrated by the claim that "if the fares are reduced, the company will be unable to earn a reasonable return upon its (nominal) capital." With a capitalization two or three times the cost of the roads, a reduction of fares might perhaps have this result. A small return upon a fictitious capital may, however, represent a handsome profit upon the actual cash investment of the promotors of the enterprise.

In sharp contrast to the rapid introduction of electricity in American cities, is the slow and hesitating attitude of the people of Great Britain. Naturally conservative, the English have been slow to adopt the trolley, although for many years steam has been employed as a motive power on several tramways.' But within the last few months the natural resistance to innovation has yielded considerably, and the sentiment in favor of electrical propulsion is growing. The town council of Sheffield has just voted to adopt the trolley experimentally on two lines in the city. The city of Glasgow recently sent a committee to America to examine the various systems and report thereon. The committee returned last December, and recommended that a part of the municipal tramways be equipped for overhead electric traction. It is probable that the next few years will witness a very general change in English tramways, from horse and steam power to electricity.

In an analysis of the English system of tramways one discovers at the outset a very radical difference from anything that prevails in the United States, in that thirty-seven of the tramway undertakings of the United Kingdom belong to the local authorities (to the corporation of the city, town or borough). Besides these thirty-seven tramways, involving a total expenditure on capital account of £4,308,008, and having a mileage of 528 miles, there are 116 lines owned by pri

1 Barrow in Furness, Birmingham, Blackburn, Bradford, Burnley, Gateshead, Huddersfield, and many others, operate by steam locomotives.

vate companies, with a capital expenditure of £10,887,985, embracing 939 miles of track. Here then, municipal corporations, as well as private companies, have been the promotors of tramway schemes in so far as the construction of the lines is concerned. The lines belonging to the local authorities have almost invariably been operated by private companies under leases running for twenty-one years, at the expiration of which time the track and franchise become the absolute property of the town or borough.

During the life of the lease, the operating company under contract agreement with the city corporation pays a rental for the use of the streets and rails, which rental usually amounts to from 5 to 10 per cent. upon the original cost of the tramways.

Rates of fare and frequency of car service are in some cases also determined by the contract under which the company operates the lines.

As a variation from this system of public ownership and private administration, several towns have obtained special parliamentary sanction, and are now operating the tramways

as a municipal undertaking with varying degrees of success.'

'UNITED KINGDOM, June 30, 1896.

Tramways belonging to local authorities

Tramways belonging to other than local authorities..

Of the tramways belonging to local authorities, 32 are operated by private companies, while five, viz., Blackpool, Glasgow, Huddersfield, Leeds, and Plymouth, operate as well as own their tramways.

Blackpool,
Enterprise

cost

£29,022.

Glasgow, Enterprise

cost

£553,000.

80 miles 34 ch.

127 miles 48 ch.

After paying interest on cost of tramway and making allowance for sinking fund, a profit remained last year of £593. This was added to the accumulated profits of the three preceding years of municipal operation, making a total of £2753. 2. 5, from which £2560.6.2 was appropriated to reduce amount spent on reconstruction of Centre Channel in excess of sanction, and the balance, £192. 16. 3, transferred to the borough rate account to aid in expenses for the year.

Since 1870 the United Kingdom has had a general tramways act, known as The Tramways Act, 1870. The act is divided into three parts. Part I relates to the issuing of provisional orders by the Board of Trade, authorizing the construction of tramways. Part II relates to the regulations as to their construction. Part III contains "general provisions," including the subjects of insolvency of promoters, purchase of tramways, tolls, by-laws by local authorities, offenses and penalties, and regulation of traffic by local authorities. Under this act provisional orders authorizing the construction of tramways in any district may be obtained by (1) the local authority of such district, or by (2) any person or persons, corporation or company with the consent of

Huddersfield,
Enterprise

cost
£139.500.

Leeds, Enterprise cost

£131,305.

Plymouth,

Enterprise

cost

£50,000.

The operation of the lines for the year ending March 31, 1895, resulted in a deficiency of £2,473. Each year of the fourteen years of its history this tramway has run at a loss varying from £671, in 1882, to £16,626 in 1893, involving a total loss of £62,220. This has been met by transferring £20,982 from depreciation account, leaving only £340 to represent the depreciation of fourteen years. The remainder of the deficit has been made up by special taxes ranging annually from 1-9th of a penny to 5 pence in the pound, and costing the rate payers £41,238.

For year ending March 25, 1895, tramways show a profit of £133.75, after paying expenses, which include interest and sinking fund.

After providing for interest and sinking fund, the tramway in the last fiscal year lost £1,086. During part of the year the trams were disconnected, and in December, 1896, the system had only just been completed.

Since July 10, 1896, the corporation of Sheffield has owned and operated the tramways. New construction has been undertaken, and the city council proposes to equip with electricity and to largely increase its present twenty miles of track (ten miles double track). It has applied to Parliament for authority to borrow £80,000 for this purpose.

As the first year of municipal operation is not yet completed, the statistics of operation are not as yet available.

The returns to shareholders in tramway companies range from 3 to 7 per cent. per annum upon the par value of the stock. Very few companies pay as high as 7 per cent., and 5 per cent. is as large a rate as most companies distribute in dividends.

the local authority of such district. Such provisional order shall specify the nature of the traffic, and the tolls and charges which may be demanded and taken by the promoters, and shall contain such regulations relating to such traffic and such tolls and charges as the Board of Trade shall deem necessary and proper.

When a tramway has been completed under the authority of a provisional order by any local authority, or where any local authority has acquired possession of any tramway, it may lease the same to any person or company for a term not exceeding twenty-one years. The local authority is not permitted to operate the tramway, for section 19 provides “. . . . . . nothing contained in this act shall authorize any local authority to place or run carriages upon such tramway, and to demand and take tolls and charges in respect of the use of such carriages."

The local authorities may borrow such amounts of money as are necessary to construct the tramway, but the amount shall not exceed such sum as may be sanctioned by the Board of Trade. The money shall be subject to repayment within thirty years, and the local authority may pay off the debt by equal annual installments, or they may in every year set apart as a sinking fund a sufficient amount to retire the debt at maturity. Such sinking fund shall be invested in exchequer bills or other government securities.

The regulations as to the construction of tramways embrace matters relating to the power to break up streets, mode of formation of tramways, road repairs and pavements, protection of sewers, etc. The "general provisions" contain several noteworthy features. They provide that licenses to use the tramway may in certain events be granted to third parties by the Board of Trade; that in case of the insolvency of promoters the tramways may be purchased by the local authorities.'

The most important section in the act is probably the one relating to the purchase of tramways by local authorities. It reads as follows:

1 The town council of Hull have recently acquired the tramways by purchase from an insolvent company. The council are at present advertising for tenders for the reconstruction and working of the tramways.