ELEMENTS DESERVING SPECIAL CONSIDERATION 303 
concern, would naturally be inclined to take the view that the 
advantage which it has over the second can be measured by the 
cost of developing the business and that this cost in the absence 
of other satisfactory standards may be accepted as an index of 
the “ going value.” 
This appears so plausible that many economists and engineers 
have adopted a procedure based on this reasoning for estimating 
going value. They have recognized, however, that while cost 
of developing business can be treated as an investment of capital, 
it would not always be fair to accept the actual cost in each 
individual case as representing a proper allowance in the rate- 
base for cost of development. If this were done it would be 
equivalent to placing a premium upon inefficiency because the 
actual cost of development would naturally be greatest in the 
case of the property which has been least efficiently managed. 
To obviate this difficulty recourse has been had to the reproduc- 
tion method with an attempt to visualize and estimate the cost 
of development which would be incurred if under present-day 
conditions a plant had to be reproduced. In the application of 
this method of determining the advantage expressed in terms of 
money which the going concern has over another exactly the 
same, and in the same market, but with business not yet estab- 
lished, it is necessary to assume that some definite time will 
elapse between the completion of the system and the full develop- 
ment of the business as commanded by the concern whose * going 
value ” is to be appraised. It does not seem to the writer any 
simpler or more satisfactory to thus, on the judgment of the 
expert, make an assumption of the time that would be required 
to establish a business than it would be on the basis of actual 
experience in the same line of business, in the locality involved 
and elsewhere, to form an opinion as to what would be a proper 
allowance for the cost of development. 
In any business which is already established, an analysis may 
be desirable of the various elements that make up the intangible 
values of the property. In such cases some such procedure as 
that of estimating the cost of re-establishing the business under