The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1914-06-18

the real actual value of this property"
continues the opinion. "Mr. Mead
outdoes Alvord by gooa many thous-
and. We cannot concede that the esti-
mates made by these gentlemen are
reasonable. Mr. Watts, in the judg-
ment of the commission, is equally
mates of the value Of this property, in
our judgment, is far below it's real
value.
Each of these gentlemen was repre-
senting his client to the best Of his
ability Each threw much light on the
controversy. Out of the conflict in the
testimony we have arrived a, the re-
suit hereinabove set out touching the
value of this property"
Pavement Violations.
The total appraisment of the com
missions engineering staff was $751;
$50 This amount, however, included
a valuation for pavements over mains
not paid for by the water works of
$4O917, which was deducted by the
commission. Twelve per cent Of the
present value of the real estate, which
amounts to $3,4O4.72, also was deduct
ed. This left the true amount OF the
appraisal as fixed by Engineer Garman
as $6S7.344.28.
In his final estimate Mr.. Alvord
found the present value of the com
panys property to be $924.305. In this
total is included $122,O5s as going
value" The commission, however, al
lowed only $4,000 as going value"
The commission quotes at length
from court decisions, bearing on the
question Of going value
As to Going Value.
"ln the recent case decided by the
New York Courts of Appeals, the ques-
ton of going value is very fully dis
cussed," reads the commission S
opinion, "and the court found in that
case that going value should be allow
ed. X The theory Of the New
York case appears to be that going
value Is a term used to represent the
early losses Of the company while
building up it's business. The decision
makes it clear and beyond cavil that
where such expenditures and early
losses have been reimbursed by years
of successful operation Of the plant
yielding a fair and reasonable return
on the total investment from its IN
ceptiOn, that the real, unrequlted
losses and expenditures have been full
ly paid by the people. Under such
circumstances and to that extent the
question of going value is elimlnat
ed"
Continuing the commissions opinion
reads as follows: I'VE are not certain
that we fully comprehend the process
of reasoning by which these gentlemen
(Alvord and Mead arrive at their con
illusions. To them going value is
ta1 INF
While we may not understand the full
scope and import of their theory we
flatter ourselves that we do under
stand the result of the application OF
the theory of these gentlemen in arriv
ing at going value.
THE result as applied by Mr.. Al
word ia to add to the completed Struc
tural value of the property the sum Of
s122,O59, and as applied by Mr.. Mead
the result of the theory is to add tc
the structural value of this property
$133,9SO
"MentaI Athletics"
"The mental athletics employed by
these gentlemen in the development
Of their theory of going value is some
what shrouded in mystery, but the
results are plain and manifest.
in so far as going value represents
unrequited Losses of the lean years o.
this plant, the splendid profits made
honestly throughout Its career have
certainly most fully and completely
eliminated it. In SO far as the tern
going value represents the difference
between the completed plant without
use Of its service pipes and the same
property with a full demand for it,
rip &c iH1I1f n
define. However, the fact that it i:
difficult does not release us from its
consideration. X
I'm the estimate Of Alvord. there is
an allowance Of $56, 942 for paving Over
MAINS" the commission continues, TAX
ing up the question Of allowing the
company to capitalize the cost Of pave
ments constructed after the main:
were laid. The money actually eX
pended was S1.S29, and this estimate
should be reduced to that amount
1t was the contention Of City At
torney Bond of Richmond that the
company should not be allowed t.
charge to it's capital account only the
cost of laying mains and not be permit
ted to make big additional charge
where pavements were constructed af
ter the laying of mains"
An inconsistent Action.
The commission held that it wa!
entitled to take into consideration tn,
valuation Of the water works propert.
for the purposes of taxation. Wher,
such valuation is sworn to by the Off
GERS of the company it is an item 0
evidence which the rate-making bod
is not only entitled to consider but i
bound under the law to weigh in deter
mining the fair value Of this property
(San Diego Land & Town Co., VS.. Jas
! per 1883 y. S. 438 $40.
This property is assessed at s215
000," said the commission. We ar
willing to concede that this valuation
for purposes of taxation is not a con
trolling feature in determining tn
value of this property, but it does lool
somewhat anomalous and incOnsisten
that while the Richmond Waite
Works is called upon to answer unde
oath as to the fair value of this prop
erty, when such property is bein,
assessed for taxation, it should give i