316 VALUATION, DEPRECIATION AND THE RATE-BASE 
and materials other than those which prevailed at the time of 
original construction, the Supreme Court in the case of the Blue- 
field Water Works and Improvement Company vs. Public Service 
Commission of West Virginia (U. S. 262, p. 679; L. Ed. p. 1176) 
has this to say: 
“ The record clearly shows that the commission, in arriving 
at its final figure, did not accord proper, if any, weight to the 
greatly enhanced costs of construction in 1920 over those prevail- 
ing about 1915 and before the war, as established by uncon- 
tradicted evidence; and the company’s detailed estimated cost 
of reproduction new, less depreciation, at 1920 prices, appears to 
have been wholly disregarded. This was erroneous. 
“ The question in the case is whether the rates prescribed in 
the commission’s order are confiscatory and therefore beyond 
legislative power. Rates which are not sufficient to yield a 
reasonable return on the value of the property used, at the time 
it is being used to render the service, are unjust, unreasonable, 
and confiscatory, and their enforcement deprives the public 
utility company of its property in violation of the 14th Amend- 
ment. This is so well settled by numerous decisions of this court 
that citation of the cases is scarcely necessary.” 
In the Atlanta case, that is, Georgia Railway and Power 
Company vs. Railroad Commission of Georgia (U. S. 262, p. 
625; L. Ed., p. 1144) some attention is given to the ‘‘ rate base ” 
the difficulty being indicated of laying down any definite rule for 
its determination. The Court says on this subject: 
“ The objections mainly urged relate to the rate base; and 
one of them, is of fundamental importance. The companies 
assert that the rule to be applied in valuing the physical property 
of a utility is reproduction cost at the time of the inquiry, less 
depreciation. The 1921 construction costs were about 70 per 
cent higher than those of 1914 and earlier dates, when most of 
the plant was installed. So much of it as was in existence Janu- 
ary 1, 1914, was valued at an amount which was substantially 
its actual cost or its reproduction cost as of that date. The 
companies claim that it should have been valued at its replace- 
ment cost in November, 1921,— the time of the rate inquiry; 
and that the great increase in construction costs was ignored in 
determining the rate base.