Court Opinion

ID: 9459906
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:35:08.144058+00
Date Added: 2024-06-11T17:36:23.413565
License: Public Domain

MacKINNON, Circuit Judge,
concurring in part and dissenting in part:
I. Summary and Introduction
The foregoing opinion addresses the question of whether the difference in fair market value oyer book value of certain parcels of real property including both depreciable (buildings and equipment) and nondepreciable (land) segments, which had appreciated in value during their inservice life, should inure to the benefit of the farepayers or to the benefit of the investors of Transit in the ratemaking decision, when transferred from operating (“above the line”) to non-operating investment status (“below the line”). The question arises on review of Order No. 773 in which the WMATC (“Commission”) ordered a fare increase without consideration of the transfer of these appreciated properties. The majority concludes that this constituted error and accordingly sets aside the order.
The initial question of whether such transfers from operating to non-operating status give rise to any cognizable gain in the ratemaking decision is resolved in the companion opinion — Bebchick v. WMATC, No. 23,720, at Part III, 158 U.S.App.D.C. _, 485 F.2d 868 (hereinafter Bebchick). The conclusion reached therein is that the transfer of the properties from above to below the line resulted in ratemaking consequences identical to those of an outright sale of the same assets. While in a different context and for different purposes such treatment would raise serious questions, I accept it for our present purposes.
In considering the competing claims of Transit’s investors and consumers for the benefits derived from these transfers, the majority concludes that the fare-payers have the superior claim in all instances. It is my view, with respect to the depreciable properties, that the majority is on solid ground in awarding the gain to the farepayers, at least to the extent of the depreciation reserves that are maintained in respect of the property.1 While I have some question as to the farepayers’ inexorable right to amounts over and above the depreciable cost of the asset,2 I concur in awarding them the total appreciated gains under the circumstances present here.3
*832But the issues surrounding the appreciated value of the nondepreciable assets (the land itself), raise different and more difficult questions.
While the majority admits that a risk of loss analysis is inapplicable here due to the inevitable appreciation of urban land values, it blithely concludes without close analysis that the rules which place the risk of loss on farepayers as to depreciable property are equally applicable to nondepreciable assets. I would like to disassociate myself from such dangerous dicta and will attempt to point out the flaws in the majority’s reasoning. There is a rational basis upon which to distinguish between depreciable and nondepreciable assets in this context and the Commission’s application of an accounting practice which reflects this should be upheld.
Aside from the risk of capital loss, the other principal reason the majority advances for its conclusion with respect to the land is a basic feeling that the equities of the situation, in light of the history and circumstances of Transit and its acquisition of the properties in question, require any “loose gains” coming into the company to be credited to the consumers. This the majority frames in terms of the rule “benefit follows burden,” 4 but admits that this consists in “determining where the equities lie.” Supra at 811.
Most vital of these equities in the majority opinion is the fact that the land was intimately related to the conversion program from a street railway to an all-bus operation, and, since the extraordinary conversion costs were borne by the farepayers, any extraordinary gain resulting therefrom should benefit the farepayers and go toward alleviating their conversion burdens.5 Since the conversion program was a sine qua non of the resultant gains, the majority observes, an overriding equitable consideration arises with respect to these conversion-related properties. While this has a surface attraction, there are some problems with its application here and with its interrelation with the other relevant policies.6 Yet, even assuming arguendo that the majority is completely correct in its determination that equities surrounding the conversion can constitute a dispositive equitable factor, it does not extend, of course, to those properties not in any way related to the conversion program. It is with respect to those properties, the non-related, non-depreciable assets, that the greatest difficulty arises in adopting the position of the majority. Here the legal grounds for awarding the gains to the farepayers become most attenuated.
The underlying basis for the majority’s equitable approach is- that in light of the demise of the “fair value” theory of ratemaking7 investors are not considered to have any protectable constitutional interest in the actual assets of a publicly regulated utility but rather are entitled only to a fair return on their initial investment.8 Therefore, arguably the logical extension of this is that any gains on disposal of appreciated properties are to be apportioned as between the farepayers and the investors solely on an equitable basis in light of all the relevant facts and circumstances. Although the question is not without difficulty, it is my view that this approach is incorrect as applied in the majority *833opinion. This constitutional policy sets only the outer dimensions of permissible ratemaking and is not a license for us to overturn Commission actions in conformance with accepted accounting procedures whenever we feel the equities tend to support a contrary result. It is thus my conclusion that the policy of judicial deference to agency actions requires that we uphold this order in respect to the land as not arbitrary and capricious insofar as it distinguishes between depreciable and nondepreciable assets.
II. Nondepreciable assets
A. The example of depreciable assets
Much of the rationale behind the majority’s view that the consumers would be liable for any capital loss on the land and therefore be entitled to any gains is derived by analogy to its analysis of the depreciable assets.
There is a respectable amount of authority both inside and outside this jurisdiction which supports the majority’s disposition of the depreciable assets. The basic notion is that since the farepayers must make good the shareholders’ investment on depreciable properties through the depreciation reserve, and bear the risk of loss through obsolescence in that they must make up for the underdepreeiated cost of any prematurely retired asset, if the asset should be sold for a profit they equitably should benefit at least to that extent. If it is sold for less than book value they must make up the difference between that amount and the accumulated depreciation to date. Therefore, the reasoning goes, if it is sold at a profit it is only equitable that he who bears the risk of loss should similarly reap the gain.
The fundamental premise of this principle is that the farepayers do in fact bear the risk of loss of obsolescence. In Washington Gas Light Co. v. Baker, 88 U.S.App.D.C. 115, 188 F.2d 11 (1950), cert. denied, 340 U.S. 952, 71 S.Ct. 571, 95 L.Ed. 686 (1951), this court adopted this view and held, with respect to depreciable properties, that the farepayers may be charged with the unrecovered cost9 if the investors have not been compensated in some other way.10 A similar result was reached by Justice Murphy of the Minnesota Supreme Court in Minneapolis Street Ry. v. Minneapolis, 251 Minn. 43, 86 N.W.2d 657 (1957) which held, citing Baker with approval, that the obsolescence loss occasioned by abandoned streetcar facilities must be borne by the farepayers.11
When the retirement of the assets has resulted in a gain, a number of courts outside this jurisdiction have credited the gain to the depreciation reserve to offset the farepayers’ burden of making good the investors’ unreeovered costs,12 and more importantly, there is ample authority within this jurisdiction for such treatment. In D. C. Transit System, *834Inc. (Order No. 4577) 30 P.U.R.3d 405 (D.C.Pub.Utils.Comm’n 1959), the PUC noted that under its Uniform System of Accounts a net profit on the sale of depreciable improvements should ordinarily be credited to the depreciation reserve as salvage (and thus benefit the farepayers).13 In D. C. Transit System, Inc. (Order No. 245), 48 P.U.R.3d 385 (WMATC 1963), “the Commission recognizes that ‘gains’ may be experienced on disposal of depreciable items and these are indeed used as offsets to depreciation under the heading of ‘salvage.’ ” 48 P.U.R.3d at 403-404. Similarly, in D. C. Transit System, Inc. v. WMATC, 121 U.S.App.D.C. 375, 350 F.2d 753 (en banc, 1965), this court decided that the Commission’s decision to benefit the farepayers with the gains from disposal of depreciable properties to the extent of the depreciation taken and beyond was reasonable in light of the peculiar equitable circumstances in that the farepayers were required to bear the enormous conversion costs that occasioned the gains realized.14 The Commission has recently stated that “there is no question that, when depreciable operating property is sold and a gain is realized, the gain should be used to reduce the depreciation expenses which ratepayers have paid but which the company, because of the gain, does not actually incur.” D. C. Transit Sys., Inc. (Order No. 1090), 85 P.U.R.3d 508, 513 (WMATC 1970).
Thus with regard to depreciable properties the approach adopted by the majority is well-supported and equitable but this does not justify a procrustean attempt to force nondepreciable assets into the same mold.
B. Nondepreciable assets
1. Risk of capital loss
a. Precedents
Within the District, a number of administrative decisions have uniformly held to the contrary of the analysis adopted by the majority. This is admitted by the majority15 but it is claimed that the administrative approach was adopted without critical analysis. Outside the District, there is a paucity of eases and the few that are cited cannot directly support the action taken here.16 The majority observes the dearth of decided cases and seems to take this as a “license” to deal with the question as if writing on a clean slate. It would appear, however, that the lack of cases on point is probably more indicative of the fact that no one previously has ever imagined of or argued for such a novel approach with respect to nondepreciable assets.
Within the District, the issue has been mentioned in administrative opinions but we have never directly considered it.17 Under both the PUC and WMATC, profits on sales of land have been treated as “a proper credit to earned surplus” and thus as benefiting the investors. D.C. Transit Sys., Inc., (Order No. 4577), 30 P.U.R.3d 405, 409 (D.C.Pub.Utils, Comm’n 1959); D.C. Transit Sys., Inc. (Order No. 563) 63 P.U.R.3d 32, 34 (WMATC 1966). More directly on point is D.C. Transit Sys., Inc., (Order No. 245) 48 P.U.R.3d 385 *835(WMATC 1963) in which an argument very similar to the approach adopted by the majority here was advanced to the Commission and rejected by it. In that case it was argued that gains realized on the sales of certain pieces of land might be used to offset some of the losses on the premature retirement of rail facilities borne by the farepayers. In clearly holding to the contrary the Commission stated:
While the ratepayers may have a claim to the depreciable property, at least to the extent of the depreciation reserved, no such claim can he directed to land.
48 P.U.R.3d at 399 (emphasis added).18 And further:
If land becomes of no further use and is disposed of at a profit, the investor is entitled to the profit; or, if at a loss, the investor must suffer the loss.
Id. at 400.19
Outside this jurisdiction, I agree with the majority20 that the • cases can be read only to stand for the proposition that the benefit of capital gains accompanies the risk of loss. In New York Water Service Corp. v. Public Service Comm’n, 12 A.D.2d 122, 208 N.Y.S.2d 857 (1960) affir’ming New York Water Service Corp., 7 P.U.R.3d 32 (N.Y.Pub. Serv.Comn'n 1955), the court upheld a determination by a regulatory commission which passed on to the consumers a profit reaped on the sale of land. The controlling reason was that under the system of accounting adopted by that agency, any loss on a sale of land was required to be debited to the depreciation reserve and thus charged to the consumers. “The utility is thus protected from a loss in the sale of land in its operations; it seems reasonable it should pass on a profit to the consumer.” 208 N.Y.S.2d at 863-864. Thereafter in Lexington Water Co., 72 P.U.R.3d 253 (Ky.Pub.Serv.Comn'n 1968), the same rule was applied by the Kentucky regulatory commission, citing N.Y. Water Service. “If it is proper to recover losses of non-depreciable property through amortization, then conversely it should be proper to amortize gain on such property.” 72 P.U.R.3d at 259-60. Yet this decision was reversed by the reviewing court on the grounds that N.Y. Water Service was decided as it was only because of its unique accounting procedures — procedures absent in the Kentucky case.21 The court believed that the risk of gain or loss had in fact been borne by the investors. Lexington v. Lexington Water Co., 458 S.W.2d 778 (Ky.1970). This case can, then, be cited in direct opposition to the approach adopted by the majority: 22
Profit made from the sale of non-depreciable land no longer used in serving customers is not an ingredient to be considered in fixing rates. The customers had no interest in the profit realized on the sale — it belonged to the stockholder.
*836Id. at 780. The majority also cites Columbus Gas & Fuel Co. v. Public Utils. Comm’n, 292 U.S. 398, 54 S.Ct. 763, 78 L.Ed. 1327 (1934) as indicating that sudden losses in market value of land may conceivably be borne by consumers. However, the Supreme Court denied the claim because no such risk of value diminution from abandonment was imminent. Yet it appears that the Court would have allowed a system which treated land as a “depreciable” asset for all purposes (see note 25, infra) in which case the risk of loss would in fact be on the farepayers.
Therefore, while it is clear that the majority is correct in reading these cases as standing for “the broader principle that the benefit of a capital gain follows the risk of capital loss.”23 it clearly fails to recognize the importance of the applicable system of accounting and the Commission’s practice and pronouncements in determining where in fact these risks do lie.
b. Who in fact bears the risk of loss?
(1) The Commission’s pronouncements
It is clear that under the Commission’s Uniform System of Accounts, land is treated as a nondepreciable asset and any gain or loss is a risk not of the fare-payers, but of the investors.24 Certainly the Commission could have adopted a different system placing the risk of loss on the farepayers if it had so desired.25 Yet the Commission has repeatedly said it is the investor’s risk of loss. D.C. Transit Sys., Inc., (Order No. 245) 48 P.U.R.3d 385, 399, 400 (WMATC 1963); D.C. Transit Sys., Inc. (Order No. 4577) 30 P.U.R.3d 405, 409 (D.C.Pub.Utils.Comm’n 1959); D.C. Transit Sys., Inc. (Order No. 563), 63 P.U.R.3d 32, 34 (WMATC 1966); see also Respondent’s brief at 9-10 and the Commission’s brief in Bebchick at 32.
It is reasonable to adopt such an accounting method and as such it is beyond our power to overturn it, especially in light of consistent Commission adherence thereto. The Commission (as is usual with most regulatory agencies) has express statutory authority to establish uniform accounting rules26 and such rules are controlling unless clearly arbitrary and capricious. D.C. Transit Sys., Inc. v. P.U.C., 110 U.S.App.D.C. 241, 292 F.2d 734 (1961). Public utility regulation eases are replete with recitations of the principle that deference is to be accorded an agency’s accounting treatment of various transactions unless clearly unreasonable. See, e. g., American Telephone & Telegraph v. United States, 299 U.S. 232, 236-237, 57 S.Ct. 170, 81 L.Ed. 142 (1936); Northwestern Electric Co. v. FPC, 321 U.S. 119, 124, 64 S.Ct. 451, 88 L.Ed. 596 (1944); Arkansas Power & Light Co. v. FPC, 87 U.S.App.D.C. 385, 185 F.2d 751 (1950); see also infra at 844-845. Accounting rules themselves reflect basic policy judgments carefully arrived at and should not be hastily overturned.
The reasonableness of a system of accounting which treats land as nondepreciable seems manifest. Land does not wear out in the conventional sense of buildings and equipment. Neither it is a wasting asset such as resources subject to depletion allowances. Moreover while there obviously may be exceptions, as a general rule it is extremely unlikely that the fair market’ value of land in metropolitan areas would decrease below *837cost over a period of time.27 This general stability of land values insures the integrity of the shareholders original investment in the vast majority of situations and it is just for that very reason that it is a widespread practice among regulatory agencies to treat land as nondepreciable. Under these circumstances it seems that the Commission’s decision to treat land as a nondepreciable asset and to credit or debit any gain or loss on disposition to the earned surplus account is eminently reasonable and should be sustained. It certainly is a settled principle that land is nondepreciable and to call this is a “mistaken notion” 28 is wholly unjustified. It is familiar law that great deference is to be accorded consistently applied administrative decisions and interpretations of its own rules and regulations and here, as the majority admits,29 the administrative decisions have uniformly treated gain or loss on land as a concern solely of the utility’s investors.
(2) Criticism of the majority’s conclusion in this regard
How then does the majority arrive at the conclusion that the risk of loss on land dispositions is borne by the fare-payers? The answer is not completely clear,30 but essentially the majority concludes that, in spite of what the Commission has done in the past and says it will do in the future, if faced with a concrete situation in which land becomes obsolete for the company’s purposes and the market value drops below cost, if sold at a loss the Commission will place the burden of making good the original investment on the consumers just as is done with depreciable properties for which insufficient depreciation has been taken due to unforeseeable obsolescence.
The majority repeatedly speaks of “obsolescence and declining markets” with respect to land.31 However, the concept of obsolescence in conjunction with land simply does not work. The truth of the matter is that if land is sold at a loss due to sudden obsolescence the loss falls on Transit’s investors — and statements such as that in the text, supra at note 322, are simply wrong as to land. The only authority to the contrary is distinguishable easily on the basis of different accounting systems and different administrative practices in other jurisdictions.32 There is no depreciation reserve mechanism as to land whereby farepayers must make good the original investment as in the case of depreciable properties — and it is the fact of depreciation that dictates the fare-payers’ burden as to depreciable properties, not the fact of possible fluctuations in market value. The hypothetical on pages 807-808 of the majority opinion insofar as it deals with land is completely erroneous. It simply states ipse dixit the startling conclusion that it is “the notepayers’ burden to compensate [investors] for the loss on their investment in the land.” For authority, footnote 194 refers to cases (text and cases at footnotes 211-218) that deal exclusively with depreciable property and are of no authority for the proposition stated. Repeatedly the majority speaks of “obsolescence” as to land but refers the reader only to cases involving obsolescence as to depreciable property.33 Such citations beg the very question before us which is whether or not the treatment accorded depreciable property should be extended as well to nondepreciable as*838sets. While there might be some “inside information” that is not apparent, it stretches credulity to suggest that the Commission would depart from its own system of accounting and repeated past administrative pronouncements to place the risk of decline in market value of land through obsolescence on the fare-payers. And to use that as an ostensible basis for awarding the farepayers the gains on that property is tortured logic at best.
The majority does conclude that even though this analysis would support an award of the gains to the farepayers if there were a palpable risk of declining markets, that risk is not present here.34 Thus it appears that the “obsolescence” of which the majority speaks is in reality only the threat of declining market values. And I must repeat that this again demonstrates that “obsolescence” is a concept applicable only to depreciable property in this context. It is not the risk of sudden declines in market value of depreciable property that dictates the award of gains to the farepayers, but rather the fact of depreciation, in that farepayers are required to make good the cost investment of the prematurely retired asset through the depreciation mechanism. And this in turn is founded, of course, on the fact that depreciable property invariably wears out or is consumed. This simply has no application to nondepreciable property and it is undisputed that land is nondepreciable. Accounting principles are not conjured up out of the air, but are themselves representative of studied policy judgments. As such they deserve some respect and where an administrative agency consistently adheres to them, that should not be the subject of de novo judicial examination.
Moreover, the majority does not even maintain internal consistency. Even while disclaiming any reliance on “risk of capital loss” as to land in this case due to the inevitability of land value appreciation,35 the majority seems unable to refrain from further gratuitous reference to that doctrine to lend support to its result.36 It also reappears in discussing the supposedly distinct ground of “benefit follows burden” (the dispositive ground in the majority’s opinion) and figures importantly there, despite the primor disclaimer of reliance thereon for the purposes of this case.37
2. Equities
Since notions of risk of loss cannot and do not support the majority’s disposition of the gains from land, what other grounds are advanced in the opinion? The second and controlling “doctrinal consideration” in the majority opinion is termed “economic benefit follows economic burden”. The makeup of these “burdens” is crucial. A large part of this consists of enumerating the various equities of the farepayers in light of the history and circumstances of Transit.38 My brief analysis of these equities follows.
a. Conversion-relationship
Running all through the opinion is a basic equitable notion that gains on properties which are intimately related to the conversion to an all-bus system undertaken by Transit as a condition of its charter, should inure to the consumers who are bearing the enormous costs of the conversion program. It is undis*839puted that consumers are bearing the $5-15 million cost of the conversion. In the majority opinion, this fact leads to the conclusion that “the crowning consideration [in totaling the various equities] is the incontrovertible fact that the conversion, at full cost to the farepayers, was the sine qua non to release of value properties from operating roles in the transportation scheme for uses in non-transportation ventures.” Supra at 816. While the proximity of the relationship of the land to the conversion process is an important equitable factor, it is not a legally sufficient ground in and of itself to support the majority’s result. To dispel all such doubt, the following analysis seeks to trace the proper role of “conversion-relationship” in light of past precedents.
(1) Precedents
This concept is derived from cases in this jurisdiction indicating that with respect to depreciable properties for which obsolescence losses are incurred due to the conversion, consumers should be allowed to share equitably in the proceeds on disposition. How this principle developed and to what extent it is applicable here requires a close analysis of the cases in which it has appeared.
It first arose in D.C. Transit Sys., Inc., (Order No. 4577) 30 P.U.R.3d 405 (D.C.Pub.Utils.Comm’n 1959). In that case there were profits on the sale of conversion-related properties over and above the depreciable cost of the assets.39 The PUC noted that under its Uniform System of Accounts, all gains normally should be credited to the depreciation reserve as salvage (to benefit the consumers). Id. at 410. Then it observed that this was a highly unusual situation in that there were gains over and above the amount needed to retire the original cost of the assets and therefore departure from the Uniform System of Accounts was deemed warranted. The company sought the “over and above” gains in total, but the PUC noted the compelling equity of the close relation of the gains on these properties to the conversion program.40 This is somewhat odd because the PUC really approached the question “backwards.” That is, since the Uniform System of Accounts required all gains to go to the farepayers, why should it not have searched for some equities on the side of the investors rather than the farepayers. Somehow the PUC seemed to adopt a presumption that all “over and above” gains should now go to the investors, contrary to its own Uniform System of Accounts.
Nevertheless, this approach was later cited by this court sitting en banc as a valid method of determining when gains *840on depreciable property (presumably over and above the depreciation reserve although this is not clear) can be ■ applied to offset other charges arising out of the conversion. In that ease the question was whether a profit on the depreciable portion of an asset41 could be used to offset an obsolescence charge for the retirement of a different asset, underdepreeiated due to the conversion. The court seemed to say the profit on one piece of depreciable property could not be used to offset the obsolescence deficiencies on another asset unless the requisite relationship to the conversion were established. 350 F.2d at 775-776. The court remanded to the Commission to determine whether the profit-yielding property was in fact conversion-related.
On remand, however, the Commission further clouded the question. After determining that the property in question was not conversion related (which would have settled the issue) it continued:
Therefore, the ratepayer is not entitled to share in any portion of the proceeds of that sale, unless there was a profit on the depreciable portion of the asset sold. There was none in this case.
D.C. Transit Sys., Inc., (Order No. 563), 63 P.U.R.3d 32, 33-34 (WMATC 1966). This is confusing in that the Commission seemed to say in a casual manner that if the sufficient conversion-relationship were shown, the farepayers would have a right to the profit on nondepreciable assets — a principle it has never accepted. It is correct in that fare-payers are entitled to profits on depre-' eiable properties to some extent regardless of the conversion relationship. And since there was none here, farepayers are not entitled to any portion of the proceeds of the sale. The tricky word is “therefore” and it must be concluded that this is merely ill-considered loose language on the part of the Commission.
The principle boils down to this: fare-payers may get the gains on depreciable properties in all situations on that particular asset up to the depreciation reserve, but gain over and above that42 will not be credited to offset other depreciation obligations incurred on other assets due to the conversion program unless the gains also were occasioned by the conversion. This is a reasonable approach, although it is based on the Commission’s rather surprising position of inclining to give all “over and above” gains to the company rather than to the farepayers as is required under its Uniform System of Accounts. Apparently the Commission felt that its accounting procedures never contemplated such extraordinary gains over and above depreciation reserves- — and it is true that the whole premise of depreciation is that an asset will usually decline in value to the point of an insignificant predicted salvage figure.
(2) “Over and above” gains on . depreciable assets
This raises the difficult question of whether farepayers should automatically be entitled to these “over and above” gains. The majority maintains at footnote 227 (last two sentences) that because the farepayers bore the risk of loss up to the total cost of the asset, equitably they should receive the total gain. Since the investors are assured protection of their investment, the majority argues, they have no equitable claim to any gain. However, the better analysis seems to be that the farepayers must undertake in all situations to make good the original cost of the asset to the investors because it is assumed that the asset will be consumed in the business and its value dwindle to the point of salvage. This was the expectation in setting up the depreciation schedule and in estimating the useful life of the asset. When these calculations go awry and the *841salvage value is somewhat higher than predicted, clearly the farepayers should get back their contributions to depreciation to that extent — and this is how the Uniform System of Accounts works. However, when calculations are so far afield that the depreciable asset on retirement brings in not only the total cost, but a sizeable profit as well (a highly unlikely situation), the farepayers in recovering back only the amount of their contributions to depreciation and in being relieved of any further depreciation obligation in respect of the asset, nevertheless are receiving an unexpected windfall to that extent. When there is a sizeable profit as well, it seems the Commission is completely justified in departing from normal accounting procedures as it did in D.C. Transit Sys., Inc., (Order No. 4577) 30 P.U.R.3d 405 (D.C.Pub.Utils.Comm’n 1959) and allow both investors and ratepayers to share in these over and above gains according to the equities — one of which is the relation the property bore to the conversion and the enormous obsolescence charges associated therewith. This would appear to be the better rule but I concur in the result reached by the opinion which gives the over and above gains on depreciable properties to the farepayers because of the equities of this particular case.43
(3) Analysis of the majority’s use of the concept of conversion-relationship with respect to the land
How then does the majority employ the notion of conversion relationship? While at times the majority uses it only as another equitable factor (a role I deem appropriate), at other times it appears to be a dispositive legal consideration. See supra, at 818. I would simply like to clarify the point that language in our past opinions dealing with conversion relationship has referred solely to depreciable properties, and, as discussed above, there is indisputably a rational basis for distinguishing nondepreciable property in this context.44 Any past discussion of conversion relationship has been with respect to depreciable property already prima facie awarded to farepayers under the Uniform System of Accounts and has involved questions as to the appropriate sharing between investors and farepayers as to gains over and above the depreciable cost of the asset. Here, under the Uniform System of Accounts, duly adopted by the Commission, the gains on real property automatically go to investors as discussed supra. Moreover, under the applicable precedents, once a conversion relationship is found to exist, only then does it become a matter of balancing the equities to determine to what extent farepayers shall share in the proceeds. “The extent to which they are to share depends upon a fair balance between the interests of the public and those of the company’s investors.” D.C. Transit Sys., Inc. (Order No. 4577) 30 P.U.R.3d 405, 412 (D.C.Pub.Utils. Comm’n 1959).
(4) Summary
Therefore, to summarize the precedents insofar as they address this issue, on close analysis, the method appears to be this: if depreciable property is sold at a gain, those gains belong to the farepayers up to the point of the depreciation reserve of the asset. If there remains any gain over and above that figure, it must be determined whether these properties in question were disposed of as part of the conversion program. If so, then the other equities are examined to balance the relative interests of the public and the consumers. Thus the depreciable nature of the property is an essential prerequisite to any conversion-relationship analysis; and in turn, a conversion-relationship is a necessary predicate to any balancing of the equities. In no way is there any precedential support for applying either a conversion-relationship analysis or a balancing of the equities to nondepreciable *842assets. That is not to say that the fact of the conversion-relationship does not create a powerful equity — but rather that any reliance on this concept as an independent source of support based on precedent is misplaced. And certainly with respect to nondepreciable properties ijowrelated to the conversion, the only conceivable ground for the opinion’s similar disposition of the gains in favor of the farepayers is simply the general equities of the situation45 — which leads to the following discussion.
b. Other equitable considerations
It is indisputable that the equitable considerations involved in this case preponderate in favor of the farepayers. They have been required to bear the burden of over $10 million in track removal and repaving as well as the $5 million underdepreciated cost of the tracks and streetcars. Moreover, the fact that the conversion program borne by the farepayers freed these parcels of real estate to be disposed of at a profit by the investors is a very compelling equitable consideration.46 Transit’s investors benefited from a purchase of the stock of the company at a cost far below the fair market value of the assets,47 (not to mention not paying any sort of premium for acquiring a going business with a virtual monopoly assured by charter) and it appears that sizeable dividend returns have been received over the years.48
I must note briefly however, that some dispute can be taken with some of the specific factors in the majority opinion. For example, some of the factors cited as benefiting the investors, such as Transit’s virtual monopoly position (supra at 815), its preferred tax treatment (supra at 820), its changeover to an operating ration system of fixing a fair *843return as opposed to the old rate base method (supra at 815), and the general rise in property values (supra at 816), are present in almost every ease involving a public utility. To weigh these factors against the investors is tantamount to “fixing” the outcome of the game before it begins. Moreover, we read nowhere in the majority opinion of any equities on the side of the investors. A regulated public utility is a unique operation in which it is often said the investors have only a “fishing license.” While they stake their entire investment in the enterprise and face a large downside risk, they have a ceiling on their possible gains (a regulated reasonable rate of return) — and they are not guaranteed this return, but only given the right to “fish” for it. In return for agreeing to this arrangement, they receive a number of advantages such as their monopolistic position, tax preferences and perhaps an operating ratio method of rate determination. Where the investors must bear the entire business risks, consumers bear only the incidental maintenance costs on utility assets and must protect the investors’ investment in depreciable property since it has a limited useful life (but not land— land stability is their only protection here). That this arrangement has long been the practice in public utility regulation is admitted by the majority. Yet never before have such factors been considered equitable considerations which militate against the investors, at least to my knowledge. To so hold is equivalent to saying that in every case the equities are against the utility. In our case it is true that the conversion has placed extraordinary burdens on the farepayers —and it is these extraordinary burdens which rightly should figure in the equitable balancing process. But I object to “stacking the deck” by adding into the balance the normal incidents of every publicly regulated industry.
c. Resurrection of “risk of capital loss” under the topic heading of “burdens”
As conceded above, a large part of these “burdens” consist of various equitable factors which weigh generally in favor of the farepayers. However, it seems that an equally large part of the majority’s rationale in this “benefit/burden” section is nothing more than a restatement of the erroneous principle that farepayers are entitled to capital gains because of the obsolescence risk of capital loss — i.e., the first of the majority’s two controlling principles. While supposedly discarding that factor for the purposes of this case,49 the majority somehow manages to slip it back into the deck with an impressive sleight of hand maneuver. Repeatedly in this section of the majority opinion, there is language about “depreciation” and “obsolescence” burdens of the farepayers.50 The fact of the matter is that such concepts simply do not apply to nondepreciable assets such as land. Such statements as “consumers bear the risk of that loss unless investors have been compensated for assuming it” (text accompanying note 217, supra) are completely wrong as to land. What is more important is that they involve identical considerations to those the majority claimed to have set aside.51 Here we have two basic doctrines advanced to support the result and one consists to a considerable extent of a restatement.of the other. And when it is asserted that the one factor is to be shelved, it should not reappear in another form. If truly consistent in this regard, what then would remain of the majority’s crucial second “doctrinal consideration”, the dispositive benefit/burden analysis? When the repeated doctrine disappears, we are left with only “half a doctrine.” On careful scrutiny, then, the marvelously voluminous and *844superficially authoritative arguments for the existence of increased farepayer burdens evaporate, leaving a much lightened scalepan' on the farepayers’ side of the equity balance.52
C. The critical inquiry.
As to the central issue, I find myself in agreement with the majority. The statement that “ [accounting directives . . must survive the test of rationality” (text accompanying note 316, supra) precisely frames the question as I would desire. Clearly then our difference centers around whether the majority’s “equities” are sufficient to render the Commission’s actions irrational, arbitrary and capricious.
To be sure, there is no question that the Commission is not bound by traditional concepts of private enterprise and private property in its treatment of various transactions — at least not by any constitutional considerations. The cases rejecting the fair value theory of rate base and depreciation53 have demonstrated a marked willingness to accept commission departures from such restraints in public utility ratemaking. As the- majority opinion points out, the Supreme Court has said that “[u]nder the statutory standard of ‘just and reasonable’ it is the result reached not the method employed which is controlling. . It is not theory but the impact of the rate order that counts.” FPC v. Hope Natural Gas Co., 320 U.S. 591, 602, 64 S.Ct. 281, 287, 88 L.Ed. 333 (1944). Therefore conceivably we should look only to the relevant facts and circumstances and proceed to balance the equities. This is essentially what the majority does with respect to the nondepreciable nonrelated properties and, under my analysis what it must do with respect to all the land since there does not appear to be any other persuasive justification for the result reached.
Yet while such an approach may be constitutionally valid and would undoubtedly be upheld had the agency in fact adopted it, we are not faced with such a situation nor are we operating in a vacuum. There enters another very powerful judicial doctrine — that of deference to agency adherence to rules promulgated under statutory authority unless arbitrary and capricious. Again the ultimate question is whether the equities of the situation are so overwhelming that we can say that the Commission’s adherence to its Uniform System of Accounts and its uniform administrative pronouncements was clearly arbitrary and capricious under the circumstances. It is my conclusion that the Commission’s actions were reasonable enough to withstand attack on review. It is true that a system of accounting which is unreasonable may be overturned by this court, yet I cannot agree that because of the equities in this case, the traditional manner of accounting employed here is such a departure from economic realities as to warrant a finding of arbitrariness. Clearly if the Commission were to adopt an accounting procedure like that employed in N.Y. Water Service 54 we would uphold its decision and we now would have before us a different case. Moreover the equities on careful analysis are not so overwhelming as the majority would like to paint them. Many of the numerous factors cited by the majority are makeweights and the valid ones are insufficient to render the Commission’s actions arbitrary and unreasonable. The apparent de novo review of the agency’s procedures in the opinion and the wholly unprecedented treatment of the nondepreciable properties based solely on equitable balancing seems to be stretching the law to reach a desired result.
It is clear that the majority gives very little deference to the applicable ac*845counting rules and the Commission’s decision to follow them.55 It states that “ [accounting procedures are not self-justifying” and “[t]o permit an accounting device to dictate the rule of law is to allow the tail to wag the dog. To judicially accept an accounting method without inquiry as to its reasonableness is to pervert the law. And to yield, on judicial review, unquestioning obeisance to administrative authority over utility accounting is to abdicate the responsibility to review.” Supra at 819. Yet while the judicial responsibility to review, certainly should not be abdicated, neither is it a license to ignore all limits on our discretion. It is the majority, rather, that “perverts” the law in ignoring such firmly embedded concepts in our judicial system as deference to agency procedures. The Supreme Court has spoken decisively on this issue:
This court is not at liberty to substitute its own discretion for that of administrative officers who have kept within the bounds of their administrative powers. To show that these have been exceeded in the field of action here involved, it is not enough that the prescribed system of accounts shall appear to be unwise or burdensome or inferior to another. Error, or unwisdom is not equivalent to abuse. What has been ordered must appear to be “so entirely at odds with fundamental principles of correct accounting” (Kansas City Southern Ry. Co. v. United States, 231 U.S. 423, 444, [34 S.Ct. 125, 58 L.Ed. 296]) as to be the expression of a whim rather than an exercise of judgment. Norfolk & Western Ry. Co. v. United States, 287 U.S. 134, 141 [53 S.Ct. 52, 77 L.Ed. 218]; Kansas City Southern Ry. Co. v. United States, supra, [231 U.S.] p. 456, [34 S.Ct. 125, 58 L.Ed. 296].
American Telephone & Telegraph Co. v. United States, 299 U.S. 232, 236-237, 57 S.Ct. 170, 172, 81 L.Ed. 142 (1936) (emphasis added). See also, Northwestern Electric Co. v. FPC, 321 U.S. 119, 124, 64 S.Ct. 451, 454, 88 L.Ed. 596 (1944) (emphasis added):
Although . . . the Commission’s prescribed method of eliminating the write-up may not accord with the best accounting practice, it is sustained by expert evidence. It is not for us to determine what is the better practice so long as the Commission has not plainly adopted an obviously arbitrary plan, [footnotes omitted].
See also, D.C. Transit Sys., Inc. v. PUC, 110 U.S.App.D.C. 241, 242, 292 F.2d 734, 735 (1961); Arkansas Power & Light Co. v. FPC, 87 U.S.App.D.C. 385, 185 F.2d 751 (1950); Alabama Power Co. v. FPC, 75 U.S.App.D.C. 315, 128 F.2d 280, cert. denied, 317 U.S. 652, 63 S.Ct. 48, 87 L.Ed. 525 (1942); Pacific Power & Light Co. v. FPC, 141 F.2d 602 (9th Cir. 1944); Pennsylvania Power & Light Co. v. FPC, 139 F.2d 445 (3d Cir. 1943), cert. denied, 321 U.S. 798, 64 S.Ct. 938, 88 L.Ed. 1086 (1944). To dismiss such an established and sound principle of law so cavalierly is wholly unjustifiable.
I repeat, the majority accords no deference to consistent administrative adherence to widely accepted established accounting procedures — themselves a product of careful policy judgments. It would rather consider each situation individually on the basis of the equities. This effectively injects our court into the regulatory process without benefit of expertise and creates an environment in which we are allowed to give free reign to our equitable inclinations on each factual situation without the restraining parameters of an orderly accounting system. This violates fundamental notions of administrative law and the role of the judiciary.
Brief mention is required as to the majority’s claim that it has been cited to no operative accounting rule on the issue at hand. This selective blindness is dif*846ficult to understand. Surely the majority does not mean to dispute the existence of a Uniform System of Accounts. The PUC, for example, repeatedly referred to it in D.C. Transit Sys., Inc., (Order No. 4577) 30 P.U.R.3d 405 (D.C. Pub. Utils. Comm’n 1959): “while cognizant of the desirability of adhering to the Uniform System of Accounts . ” (Id. at 410); “starting from the conceded premise that a strict application of the Uniform System of Accounts requires . . . ” (Id.); “the Uniform System of Accounts, applicable to accounting procedures of utilities under the jurisdiction of this commission .” (Id.). Ón this precise point the Commission has informed us in its brief that: “Under the system of accounts now in effect, where property is transferred by Transit from an operating to a non-operating status because it is no longer needed in the company’s transit operations, the following results:
(2) As to non-depreciable property, that is property for which no depreciation charge is assessed against the ratepayer, a different result ensues. In this case, the property is merely removed from the rate base at original cost. If there is a gain, that is if the fair market value exceeds original cost, or if there is a loss, there is a credit or charge made to retained earnings, so that the investor receives the full benefit of any gain and the full detriment of any loss.
Depreciable property is a capital item which the investor has put into service which, while it remains in service, is wearing out. As it wears out and thus its value is reduced, the ratepayer reimburses the investor for the reduced value through a depreciation charge which is set to reflect the rate at which the property is assumed to be wearing out. At the time of transfer, the amount of the accumulated depreciation is deducted from the original cost to determine the unrecovered cost. If the fair market value exceeds the unrecovered cost, there is a gain in that amount, and it is fair that the gain be credited to the ratepayer up to the amount he contributed in depreciation charges for that property. At the same time, if the gain exceeds the amount needed to repay the ratepayer in full, it seems equitable that the investor receive that surplus.
With respect to non-depreciable property, on the other hand, since the ratepayer makes no contribution to the capital cost, he shares none of the profit if a profit is indicated when the property is taken out of service. The investor has provided the capital to acquire the property and the ratepayer in no way thereafter has provided reimbursement to the investor for that capital outlay, as he has through depreciation charges on depreciable property. While nondepreciable property is in service, the ratepayer pays maintenance .and taxes on the property, which expenses are regarded as legitimate operating expenses; but they do not represent a contribution to the capital cost. That cost is borne by the investor; thus, when the nondepreciable property is removed from service, it is equitable that any gain in value over original cost be passed on to the investor.
Respondent’s Br. 9-11 (emphasis added). Now is this a failure to cite to us the Commission’s Uniform System of Accounts as the majority contends? Is it defective because no section numbers or quotations appear? Or does the majority simply assume that the Commission has lied to us? I think such an assumption wholly unjustified and improper to say the least. Moreover, this cannot be a “post hoc rationalization” since, as the majority admits,56 the Commission has repeatedly and consistently stated this to be its position and this statement is not contradicted in this record.
*847A Uniform System of Accounts is not enacted piecemeal. This Agency’s system has been in effect since the days of the PUC and the WMATC clearly inherited it in to to.57 It is a broad system of accepted accounting procedures applicable to all. regulated industries under the Commission’s authority. The enactment of Regulation 61 was necessary because it is in abrogation of traditional accounting rules. No such regulation is required where the disposition is in conformance with such accounting principles.
And even were there no clear Uniform System of Accounts provision on this issue, my position would be precisely the same. The policy of deference to consistently applied agency procedures and practices in areas of its expertise and authority is well established and incontrovertible. No such deference has even momentarily given the majority pause in its zeal to deal with the issue de novo.
Finally, if a close conversion relationship in conjunction with the other equities favoring the farepayers did serve to render the Commission’s accounting' practices and administrative decisions manifestly unreasonable and arbitrary, there would be insufficient support for this result as to the wowrelated nondepreciable properties. The fact that the conversion program, the cost of which was borne by the farepayers, was the sine qua non of the gains realized by the investors on the related properties is a strong and appealing equitable factor. And, when joined with the other equitable considerations weighing in favor of the farepayers, I can certainly sympathize if not concur with, the notion that this renders the Commission’s accounting procedures unreasonable. However, where the factor of conversion-relationship is absent, it seems clear that it cannot conceivably be said that the general equities alone reach the “critical mass” necessary to a finding of “arbitrary and capricious.”
I thus dissent as to all the land (both related and nonrelated to the conversion) and, while concurring in the result as to the depreciable properties, would like to make clear my view that the “over and above” gains should not be considered as inexorably belonging to the investors.

. Throughout this opinion, when reference is made to the farepayers’ right to receive gains to the extent of the “depreciation reserves,” it is assumed that any depreciation deficiency due on the asset because of its premature retirement is first elimmated and the investors are compensated to that extent. See also, note 39, infra.

. See Part II B 2 a (2), infra at 840.

. See Part II B 2, infra at 838.

. Supra at 808. As discussed in my Part II B 2 c, infra at 843, this is to a considerable extent merely a restatement of the majority’s risk of capital loss analysis. The better basis for its equity balancing method is the demise of the fair value system as discussed in Part III of the majority opinion, supra.

. For discussion of this conversion-relationship notion, see Part II B 2 a, infra at 838.

. See Part II O infra at 844.

. See Part II O, infra and Part II of the majority’s opinion, supra.

. That is, the figure used in fixing the rates is the original cost of the asset rather than the appreciated value thereof.

. The method the court adopted to “charge” the farepayers was to leave the retired asset in the rate base thus increasing the return to the investors at the farepayers’ expense. Under normal circumstances assets not “used and useful” in the company’s operations are not included in the rate base.

. The two ways in which investors could have been already compensated for the risk are: (1) if through any accounting method (such as amortization) the investors have already been compensated; and (2) if the investor has been compensated by a higher rate of return because of assuming the risk. Minneapolis Street Ry. v. Minneapolis, 251 Minn. 43, 86 N.W.2d 657, 668 (1957).

. The method adopted by the court here for putting the loss on the farepayers was slightly different than in Baker. Cf. note 9, supra. The retired asset was not included in the rate base, but the company sought to amortize the loss over a 10-year period as an operating expense. “But in both cases [Baker and Minneapolis] the fundamental issue is whether the consumer or the investor will bear the loss.” 86 N.W.2d at 667.

. In re Revision in Rates Filed by Plainfield-Union Water Co., 57 N.J.Super. 158, 154 A.2d 201, 205, 211 (1959); Minneapolis-Street Ry. Co., 31 P.U.R.3d 141 (Minn. Ry. & Warehouse Comm’n 1959); Wyoming Gas Co., 40 P.U.R.3d 509 (Wyo. Pub. Serv. Comm’n 1961).

. However, special circumstances dictated a sharing between consumers and investors. We affirmed in D. C. Transit Sys., Inc. v. P. U. C., 110 U.S.App.D.C. 241, 292 F.2d 734 (1961). See discussion infra, Part II B 2 a (2) at 840.

. See text accompanying note 55 supra, and further discussion infra, Part II B 2 a at 838.

. Supra at 798.

. Aside from the cases discussed infra, the petitioners loosely cite Baker and Minneapolis, supra note 11 (petitioners’ brief at 18), for their position on the land. However, as effectively pointed out in Respondent’s brief (at 12-13) these cases dealt only with depreciable properties (l)lant and equipment) and have no ax>idicability to nondepreciable real estate.

. The majority correctly states that none of our decisions upholding Commission orders can be interpreted as a decision on the merits of this issue.

. The Commission’s reasoning was correct simply Iecause land is nondepreciable.

. It is true that the Commission cited Board of Pub. Util. Comm’rs v. New York Tel. Co., 271 U.S. 23, 32, 46 S.Ct. 363, 70 L.Ed. 808 (1926) in support of this analysis. While the majority’s criticism of that case as standing for this proposition has my concurrence, see note 82 supra, it nevertheless appears that the Commission is correct and for reasons discussed infra that its conclusion can stand despite this faulty premise.

. Supra at 798.

. The Kentucky agency had adopted a system of accounts providing for the charging of losses and for the crediting of profits on land sales, not to consumers, but rather to the utility’s earned surplus account. 458 S.W.2d at 779.

. And note especially that this system was adopted in spite of the fact that Priest lists Kentucky as an original cost jurisdiction. 1 A. Priest, Principles of Public Utility Regulation 145-146 (1969). This figures importantly in evaluating the “fair value” analysis of the majority at Part III supra. See, Part II O infra. Such accounting procedures are in fact compatible with original cost doctrines such as, prevail in our jurisdiction.

. Supra at 798.

. “If land becomes of no further use and is disposed of at a profit, the investor is entitled to the profit; or, if sold at a loss, the investor must suffer the loss.” D.C. Transit Sys., Inc. (Order No. 245) 48 P.U.R.3d 385, 400 (WMATC 1963).

. A system which allowed for “depreciating” land and charging the depreciation to the farepayers was apparently permissible in Columbus Gas & Fuel Co. v. Pub. Util. Comm’n of Ohio, 292 U.S. 398, 410-411, 54 S.Ct. 763, 78 L.Ed. 1327 (1934).

. Under the old PUC, the Code so provided. 43 D.C.Code §§ 309, 310, 314 (1951); see D.C. Transit Sys., Inc. v. P.U.C., supra note 13.

. This is also observed in today’s companion cases Nos. 23,720 and 24,398.

. Text accompanying note 330, supra.

. Supra at 798.

. The majority refers to both depreciable and nondepreciable assets in the same breath with respect to risk of loss. See, e. g., supra at 809-811. However, on analysis, the only real threat of loss claimed by the majority as to land is declining market value due to obsolescence.

. See e. g., supra at 807-808, 810-811.

. See supra at 834-836.

. The identical cases are cited for both nondepreciable and depreciable assets. Compare note 194 with note 192 supra.

. On the other hand, the argument can always be made that just because most land values have consistently risen in our times, that does not mean they will invariably continue to do so. And there are conceivable hypothetical situations in which, for example, certain easements useful and valuable while in service, become totally worthless when transferred to nonoperating status (e. g., track easements down the center of a street).

. I find it inapplicable on more fundamental grounds.

. See, e. g., text accompanying notes 325, 327, supra; see also Part II B 2 c, infra at 843.

. See Part II B 2 c, infra at 843.

. But see Id. An equally large part consists of a restatement of the first “doctrinal consideration.”

. Throughout this opinion, the term “over and above” gains will be used to refer to gains realized on the disposition (or transfer below the line) of a depreciable asset, over and above the depreciation reserves (that amount contributed by the fare-payers toward the depreciation of the asset) and assumes that any depreciation deficiency due to premature retirement of the asset is also covered by the gains. Thus it is profit over and above the total original depreciable cost of the asset.

. In ordering Transit to allocate the proceeds of the sale in the manner described, the .PUG declared:
“In light of the franchise of the company requiring a gradual program of conversion from railway to bus operations over a 7-year period from July 24, 1956, we are unable to disassociate the instant transaction from the imminent retirement of all rail property under the mandate contained in the franchise. We cannot ignore the probability that full provision for depreciation will not have been provided when the rail facilities are abandoned and retired by reason of conversion. The company has consistently taken the position that any retirement loss in this connection should be recovered by charges against the customers, and the staff has heretofore indicated its agreement. However, if the customers are to be required to bear the burden of extraordinary retirement losses incident co the whole conversion program, it appears equitable that they should share, at least to some extent, in extraordinary retirement gains of the nature here under consideration.”
D.C. Transit Sys., Inc., 30 P.U.R.3d 405, 412 (D.C.Pub.Utils. Comm’n 1959).

. The asset, the “Georgia & Eastern Terminal,” apparently consisted of land and structures and thus had both depreciable and nondepreciable components. The discussion in this case, dealt only with the depreciable segments.

. See note 39, supra.

. For non-conversion-related equities, see Part IIB 2 b, infra at 842.

. See supra at 836-838.

. It is recognized that these nonrelated nondepreciable properties represent a very small portion of the assets involved.

. In this regard it is also noteworthy that the farepayers must bear the cost of maintenance on the properties while in operating status.

. At the time of acquisition the assets were valued on Capital’s books at approximately $23.8 million. Transit’s purchase price was about $13.5 million — but the investors had to make up the $10 million difference through the acquisition adjustment account as described in the majority opinion. However, the market value of the assets was apparently somewhat higher, exactly how much higher being a debatable point. See majority opinion, supra at n. 11. It should be noted that technically Capital was acquired by Transit through a purchase of stock. Text accompanying note 257, supra. The majority consistently fails to make a distinction between acquisition by purchase of the assets and by purchase of stock. See, e. g., supra at 812. It would have been more precise to maintain this distinction between the two methods, especially since it partially explains the purchase price below book value.
The principal reason behind this “bargain” in the purchase of Capital’s stock was simply that there were no other acceptable offers at the time. The legislative history of the Franchise Act shows that the Senate originally passed a version under which the transit system would be publicly owned for an interim period of three years until a suitable buyer could be found. S.Rep.No.1791, 84th Cong., 2d Sess. (1956). Prior to this “proposals were received from six applicants for the permit and detailed conferences were held with each. However, the Public Utilities Commission reported that none of the applicants met the requirements considered essential for the issuance of a permit, and no further proposals by private individuals have been submitted to date.” Id. at 2. Since private ownership was deemed preferable, the conference report indicated that the final arrangement ultimately agreed upon to give the franchise to Transit was considered more acceptable. H.R.Rep.No. 2751, 84th Cong., 2d Sess. (1956). It was apparently a simple case of the price being driven down by a dearth of buyers. It is apparent that the prospects were somewhat less than attractive.

. On page 815 of the majority opinion, enormous dividends are alluded to. This figure was derived from the Committee Report cited at note 271, but is based on a comparison with the $500,000 cash investment figure rather than the $13.5 million original investment in the company and as such is somewhat misleading and emotional. Since those years, Transit’s investors have apparently been doing substantially worse. See, No. 24,398.

. I feel it is incorrect as to all cases involving land, of course.

. See text accompanying notes 197, 199, 200-04, 209, 211, supra.

. “At the outset, we lay aside the rule that capital gain accompanies risk o£ capital loss.” Supra at 811.

. Consisting of the factors I have summarized in Part II B 2 b, supra at 842, 843.

. Part III of the majority opinion, supra at 800-805.

. Supra at 795.

. This is also the approach taken by the majority in 24,398. There the majority refers to the applicable accounting system but cavalierly dismisses it as a “technical point.” No. 24,398, 158 U.S.App.D.C. at -, 485 F.2d at 886.

. Supra at 798.

. Supra note 306.