I 58 VALUATION, DEPRECIATION AND THE RATE-BASE 
sacrifices made by the owners to establish the business, finan- 
cial aid by the public, the quality of the service, the cost 
of like service rendered elsewhere and other similar matters. 
The aim will be to establish, first, a rate-base on which the 
owner is to get a fair interest return and, second, to ascertain 
what the net earnings should be in addition to this return to 
create such a value as will be fair to both the owner and to the 
public. 
Comments on Base Physical Cost by the Wisconsin Railroad 
Commission. — Referring to the use of the original cost of the 
properties of the LaCrosse Gas and Electric Co. as the basis of 
the calculation the Wisconsin Railroad Commission states (Wis. 
R. C. R., Vol. 2, p. 16) in substance that it is quite likely that, 
because of local conditions or the manner in which the plants 
have been acquired, the cost of these plants to the present 
owner is considerably higher than the figures given (cost of 
reproduction). Owing to progress in the electrical field most 
plants have had to be rebuilt or re-equipped. The cost to pres- 
ent owners of such plants is likely therefore to be much greater 
than either the cost of the original plant or the cost of repro- 
duction new. 
The Commission in the Antigo Water Case (Wis. B.C. R., 
Vol. 3, p. 631) says: 
“ The original cost, the cost of reproduction new and the 
present value bear a very close relation to the physical prop- 
erty of the plants and are therefore of the greatest importance 
in determining the value of the same. As to which one of 
these three elements is of the greatest importance in fixing 
this value, is a matter that largely depends upon the circum- 
stances in each case and may also be more or less affected by 
the purposes for which the valuation is intended. . . . No 
matter what the differences between these three cost values may 
amount to, each one of these items constitutes evidence of the 
true value and should therefore be carefully considered.” 
The Commission also says that the burden of unreasonably 
high construction cost should not be charged to the rate- 
payers.