The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1915-06-10

II l. the duty OF the Interstate
Commerce commission 10 ascer-
tain. for each piece OF railroad
properly. is present value by de-
termining its roe new and the
amount Of its depreciation.
The nnal ngures as 70 the cost
OF reproducing any railroad prop
erty depend largely upon the view
Hken Ia 20 the -overhead
charges that should b. allowed.
II IL customary to add 20 the esti-
mated reconstruction costs a per.
oentaSe for engineering expenses.
Tor interest on the money used
during the assumed period OF con
struction. and for taxes paid dur.
ing that period. Frequently al
lowanoes are made for "~oontinEen.
cies." and the companies whose
properties are being valued often
claim that expenses for promo
ton and developing the pusr
ness (going Value) should be
added 10 the estimated cost OF re-
production. These overhead"
allowances may add from 20 to 80
per cent to the estimated cost OF
reproduction. At the Washington
conference. the position taken by
the Committee Of the State Com
mlssloners was that only such
overhead charges should be al
lowed as have been found by act
ual experience TO have been In
CURED In constructing properties
similar to those being valued.
The valuing of land used for
railroad purposes is a dinicult
problem. The lands now used
by the railroads for roadway and
terminals have been acquired
partly by gift from the public.
largely by purchase. and TO some
extent by condemnation. The
amounts paid for similar proper
tie have ranged from nothing TO
sums much in excess OF ordinary
market values. The theory most
generally adopted Is that land for
railroad purposes should be val
ued at the average normal value
OF land in the neighborhood OF n
railroad. This was the position
taken by the United States Su.
preme Court in the Minnesota
Rate case. AS a matter OF fact. |.
railroad a company usually has
10 pay more than the average
price to secure land for roadway
and terminals: and II is certain
mat. in the final determination or
h value OF The railroads. the car
riers will seek earnestly to Sc
cure what they deem TO be a rea-
sonable valuation OF land.
The question in which the pub
lie Is most interested Is whether
the railroad and other public
utilities shall be valued at What
they have actually cost. as shown
by the books OF the companies or
at what II would nov cost to re-
produce the properties in their
present condition. The law re-
ouires the ascertainment both OF
reproduction cost and Original
cost. For some companies A. ia
possible 10 obtain the actual cost
OF The property. but in the case
OF many companies the books
nave not been so kept as to show
what has been put into the proper
~. For those companies whose
books do not show Investments
accurately or fully. il will be ne
eessary to, estimate original cost,
II II is TO be secured and reported.
IL Is in the interest OF the public
that original cost should be as.
certained as completely and cor
rectly as possible. II was. also. the
view OF the representatives OF the
State Commissions at the Wash
ington conference that in valuing
railroads great weight should be
given original or actual cost.
EMORY r JOHNSON