The Washington times., 1919-09-06
FTeUREs COSTS AS OF 1s17.


over which this investigation has been
made.
Pre-WaF Prices Never To Return.
my learned associates concede that
the pre-war prices OF labor and mate
rial-the price Of things which go to
make up the elements OF value in
such q property as is being valued
NEill never return; and it seems to be
conceded upon every hand and by all
experts who have undertaken to ex-
press an opinion on the subject that
q permanent increase Amounting to
from IL to 81 per cent will be the
lasting result.
Ny associates have stated as their
belief in their opinion in this case
thus: The commission recognized that
the much higher commodity and la
Dor costs, brought about primarily by
conditions incident to the great catas-
troBhe, the world war, and not mate
rally receding, will be slow to re-
cede and doubtless will not, for many
year, at least II ever, fall to the pre-
war level
II then (as my associates find as
fact) prices will never return to pre-
war basis why on earth should this
commission md q value which they
concede does not represent the prop
erty that we have before us today, for
which we are to determine q rate that
VIII bring to its owners a fair return
on the property today-not q fair re-
turn on the property as Of 1914?
Il do not wish to be understood as
saying that I believe that the COM
pays property should be valued at
he w@HHr - IL
rial, which must be somewhat abnor-
NAL. I do believe, however, that we
should determine as Of today what the
fair value OF this property is, taking
as basis what we find will be a fair
permanent basic cost of reproducing
the property, and not fix its fair value
as Of an arbitrary date, adding thereto
such capital expenditures as have
been made since that date.
Supreme Court In FaVor.
Il find that the Supreme Court has
spoken upon this subject. favorinE
such a contention, in language so
plain that it cannot admit Of arEu-
ment CWilcox VS.. the Consolidated
Gas Company, 212 q. S., 1s.)
IT the increase in value of this
property, as indeed the increase In
value Of all properties, should be dis
allowed by this commission as we'll as
by other regulatory powers, 1t would
necessarily result in the destruction
Of all public utilities, for the rate Of
return allowed them would not be suf-
hcient on such valuation to main
tain the property in a proper, useful.
healthy and prosperous condition.
After the decision in the Consoli-
dated Gas case we find that the Su-
preme Court passed upon this identi-
cal question many times and has lust
rendered a decision in what
Is known as the Minnesota Rate case,
approving what IL said in the Gas
case. The decision OF the Court in
this case was delivered by Mr. Justice
Hughes, the very identical gentleman
whose opinion Is quoted and appar-
entity relied upon by my distinguished
associates in their findings in this
,ase."
Value to Fix Rates.
"Can il be said that this valuation |
8 for any other purpose than as the I
,aSis on which to determine a rate
What will be q fair return to the in |
the property should |
arm?
'If the rate which the commission /
hall hereafter allow is to be based
lpon the value Of the property, then
low, may I ask, can the value Of the
property IN 1914 be controlling upon
he commission?
"If the commission is to value the
property as OF 1914, then why not
* another arbitrary date, and so let
Is value IL on the date Of completion
4 the improvements Of the property,
o wit: about 1896?
"As read the Public Utility Act,
Inder which we are operating, I am
4 the opinion that Congress intend
a IL .nnnnIn.lnr -Lnr.IE ]