Valuation, depreciation and the rate base

Bibliographic data

Monograph

Identifikator:: 174667931X

URN:: urn:nbn:de:zbw-retromon-119897

Document type:: Monograph

Author:: Grunsky, Carl Ewald http://d-nb.info/gnd/10180959X

Title:: Valuation, depreciation and the rate base

Edition:: 2. ed., revised and extended

Place of publication:: New York

Publisher:: Wiley

Year of publication:: 1927

Scope:: X, 500 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter I. Introduction and general notes

Collection:: Economics Books

INTRODUCTION AND GENERAL NOTES 33 Acceptance of this system of mains may bring no immediate increase of revenue. The development of the newly subdivided area may be slow. Some years may elapse before the sales of water in the district will be equal to the added burden of main- tenance, collection of rates, and depreciation. Shall part of the system thus acquired be included in the valuation on which the owner is to receive a return? Or shall such inclusion be deferred? And if deferred for how long a time? The inclusion of such property merely because it has “ value ” can perhaps be justified on the plea that it makes no difference what a plant has cost the owner and that according to the de- cision of the courts value alone should be considered. It will be held that it represents a necessary extension of the distribut- ing system that could best be made at the same time that other street improvements were made, and that it would be impracti- cable to attempt in the case of this considerable addition to the system to fix the time when the extent of the use of such new pipe and the addition of revenue resulting from such use would no longer add to the burden of the remaining, or rather, older rate-payers. But the fact remains that when considered as the agent of the public the water-works owner hasnot made the in- vestment. The investment has been temporarily made by the owner of the subdivided tract. He will be reimbursed by the purchaser of lots, for the outlay for this and all other improve- ments made on the tract will appear in some form in the selling price of the lots. If the municipality owned the water-works, in what situation would it now find itself? The same treatment should be ac- corded the owner as would be accorded to an agent of the mu- nicipality. Viewed from this standpoint, the owner, when he accepts the addition to his distributing pipe system as a gift, assumes at once also the obligation to keep this part of the system in repair and to replace the same when worn out or dis- carded for other reasons. The owner is therefore entitled (necessity for the extension of the system being admitted) to the A i + LR

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