ELEMENTS DESERVING SPECIAL CONSIDERATION 300 
invested. When the sum of all intangible values is thus deter- 
mined (by capitalization of a part of the earnings) it will matter 
little what name is used to designate them. But the increment 
of earnings in excess of the ordinary interest rate on investments 
in safe going concerns should be so fixed as to cover also any 
amortization made necessary by obsolescence, or loss by fortui- 
tous events, and to cover whatever allowance is to be made as 
compensation for management and as a share in general pros- 
perity, possibly in lieu of appreciation. When the limitation of 
this excess by rate-fixing authorities is under consideration, it 
can probably be more nearly standardized by bringing it into 
some definite relation to volume of business, as already fully 
explained, than in any other way. 
The fact should not, however, be overlooked that compensa- 
tion for management and for hazard must be deducted from net 
income before the same can be capitalized to find value. It will 
suffice to say in this connection that no new owner would de- 
prive himself of the benefit of compensation for management by 
paying to the former owner anything for the privilege of assum- 
ing the management. Were he unwise enough to do this he would 
be making a financial sacrifice which would nullify the com- 
pensation. Likewise in the case of hazard. The assumption 
by a new owner of a hazard for which some properly ascertained 
return is in prospect has no capital value.