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.