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 II. Definitions

Collection:: Economics Books

DEFINITIONS extracted from it for the use of a public highway than the services rendered by it are reasonably worth.” It is to be noted, too, that the U.S. Supreme Court holds to the view that the value as a basis for establishing rates is to be the present value. The Court uses the following language in Will- cox vs. Consolidated Gas Co. of N. Y. (212 U.S. 19, 52). “And we concur with the court below in holding that the value of a property is to be determined as of the time when the inquiry is made regarding the rates. If the property, which legally enters into the consideration of the question of rates, has increased in value since it was acquired, the company is entitled to the benefit of such increase. This is at any rate the general rule. We do not say there may not possibly be an exception to it, where the property may have increased so enormously in value as to render a rate permitting a reasonable return upon such increased value unjust to the public. How such facts should be treated is not a question now before us, as this case does not present it. We refer to the matter only for the purpose of stating that the decision herein does not prevent an inquiry into the question when, if ever, it should be necessarily presented.” The Court has apparently taken the view that the unearned increment may generally be allowed to go to the owner of the utility either as an offset in whole or in part to early losses or as a reward for having undertaken the enterprise. The fact should, however, not be lost sight of that any such increase in value is, strictly speaking, a part of the aggregate earnings and due consideration to this fact should be given in making appraisals. While these rulings of the highest tribunal in the country seem to compel the valuing of a public utility property accord- ing to accepted standards at present worth, when value is to be ascertained and made the starting point for fixing rates, we may nevertheless be permitted, and we consider it a duty, to point out the limitations of these rulings and the desirability of secur- ing some modification thereof. This matter will be further discussed in the chapter on depreciation. IQ

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