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Southampton Tramways Company services began on 5 May 1879, with takings of £26 on that day. There was opposition to the running of trams on Sundays, and a petition of 3,500 signatures was raised against this practice. The manager of the company replied that patronage of the trams on Sundays showed that there was a demand for the service, and that as long as they showed a profit, the trams would continue to run.
The first route opened was Stag Gates – Holy Rood, with approval to operate Alma Road – Canute Road – Oxford Street – High Street – Floating Dock and Stag Gates – Lodge Road – Portswood being received on 6 May 1879. Tramway Junction – Commercial Road – Shirley opened on 9 June 1879.
The company was soon in trouble, with one manager having absconded to America in 1881, and another dismissed in 1882 over irregularities in the accounts.
By 1887, the company was on a sound financial footing, and paying dividends of 8% per annum to its shareholders.
From 22 October 1889, the Portswood route operated via Spear Road and Avenue Road.
In 1896, fares were reduced from 3d to 2d for the through routes, and frequency doubled to 5-minute intervals from Stag Gates to Holy Rood. Four new trams and forty more horses were required to operate this service.
The Southampton Tramway Company was compulsorily purchased by Southampton Corporation on 30 June 1898, at a price of £51,000 and became the Southampton Corporation Tramways