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 XV. Elements deserving special consideration when rates are to be fixed

Collection:: Economics Books

302 VALUATION, DEPRECIATION AND THE RATE-BASE charges for service or for the output of a public utility is in question, and it is for this reason that the embarrassment plainly evidenced by these quotations has resulted. In the Spring Valley rate case already referred to the Master refers to the difficulty of determining going value when he says: “It is the intangible nature of the going value which makes it difficult to prove. . . . A large part of the aggregate wealth of the world is intangible, without separate market value or ascer- tainable reproduction cost. In Adams Express Company us. Ohio, 166 U. S. 185, the Supreme Court sustained the taxation of an express company upon an assessment of property largely in excess of the value of tangible property. The intangible property is at one place ascribed to franchises, and in another to good will; the name is not important.” Justice Brewer, in delivering the opinion of the Supreme Court in this case, uses the following language in discussing intangible property: “ To say that there can be no such intangible property, that it is something of no value, is to insult the common intelligence of every man. . . . This is eminently a practical age; courts must recognize things as they are and as possessing a value which is accorded to them in the market of the world.” In the light of such opinions by our highest tribunals, universal recognition of the fact that a business may have going value is to be expected. Whether or not it is logical or wise to include such value in the rate-base of a public utility is another question elsewhere considered. Determination of Going Value. — How can this value be measured? This is the problem for immediate consideration and it may as well be stated at the outset that no acceptable solution thereof has yet been offered. In comparing two business enterprises alike in all respects except that the one already enjoys a fully developed business while the other has just emerged from the construction stage and is about to begin operation, a difference in value is readily recog- nized, and the appraiser of the first, which is already a going

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