ESSENTIALS OF VALUE 55 
respondent contended that 22 per cent for overhead is not ex- 
cessive and that there are cases in which such additions have 
been as high as 51 per cent. 
Mr. W. D. Pence of the engineering staff of the Commission 
testifying to an appraisal of the property made in 19o7 says the 
basis was: 
Four per cent for engineering and superintendence. 
Two per cent for organization and legal expense. 
Three per cent for contingencies. 
Three per cent for interest during construction. 
Mr. Beggs, the manager of the Company, stated that con- 
tractor’s profit would be at least 15 per cent of cost of labor and 
materials. (The Commission included contractor's profit in 
unit prices.) 
Mr. Beggs also claimed that interest during construction 
could not be less than 5 to 73 per cent and engineering from 5 to 
63 per cent. 
Prof. M. E. Cooley in revising the staff’s figures allowed 5 per 
cent for contingencies during construction on all items except 
land, furniture, etc., besides 5 per cent for contingent omissions 
on the investment not including land, cars and car equipment; 
4 per cent for engineering, 3 per cent for insurance, 23 per cent 
for organization and legal expense, and 6 per cent interest; total 
22 per cent. 
Mr. M. G. Starrett on behalf of the Company claimed 4 per 
cent for engineering and superintendence, 2 per cent for organi- 
zation and legal expense, 3 per cent for interest, 5 per cent for 
contingencies of construction, g per cent discount on bonds and 
I per cent for working capital; total 24 per cent. 
The Commission as the result of a study of 30 cases of actual 
expenditures finds a range of 4.5 to 23.43 per cent and an aver- 
age of 10.13 per cent for engineering, superintendence, organi- 
zation and legal expense and interest during construction. This 
does not include contingencies. Some of the individual per- 
centages were low because a portion of the cost of supervising 
extensions was charged to construction.