THE VALUE OF WATER-RIGHTS 7 
the original concern may reasonably be valued at ($200—$175) 
$25 per day per million gallons of daily delivery more than the 
water-right and other intangible elements of value of the new 
concern. This is interest on about $1 50,000, if 6 per cent per 
annum be made the basis of the calculation. 
If, in other words, rates are allowed which in the case of the 
new or main water-works system will create a water-right value 
of $50,000 per million gallons of daily delivery for the new water- 
works, then the value of the water-rights controlled by the orig- 
inal system may be about $200,000 per million gallons per day. 
In the case of a water-power, too, there may be a pronounced 
and easily recognized strategic value. The usual distinction is 
to be made, however, between the power development with an 
established market and that in which the power output is not 
yet in full demand. 
When there is no question about the market for the power, 
the problem will have to be solved on the basis of a comparison 
of the cost of utilizing the water-power as compared with power 
from other sources and this comparison may show more or less 
strategic value. Where there is no such strategic value, the 
water-right should be considered as a privilege similar to a 
franchise and should be treated accordingly. 
It must be remembered in this connection, however, and in 
any analysis of this character, that the advantage that one con- 
cern may have over another in the amount that net earnings 
exceed interest on the investment, is to be applied to all ele- 
ments of value in excess of the capital actually invested and 
can not always be assigned to water-rights alone. 
The Time Element in Valuing Water-Rights. — The water- 
right as thus far discussed is the right to put water to a continuing 
beneficial use without limit as to the time during which such 
right may be exercised. There will be cases of reversion of the 
right within a fixed time to the public which has made the grant 
thereof and there will be other cases in which a superior supply 
of water, later to be developed, may at some time throw the 
original source out of use altogether or leave it available for 
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