THE RATE-BASE AND DEPRECIATION BT 3 
for the purpose for which it was alleged to have been created 
and that it would be, in fact, as if it had never been created. 
Thus he not only failed to sustain his contention that a © deprecia- 
tion reserve ’ was necessary for the purpose which he alleged, but 
he proposed to treat the reserve as if he himself believed it to be 
both unnecessary and ineffectual, except for the purpose of 
justifying a deduction from the complainant’s investment. 
“It is obvious that the collection of an unnecessary reserve 
and its periodic deduction from the value of the property in 
service would operate to effect a piecemeal purchase, on the part 
of the public, of the property used by the utility in its service. 
In other words, it is really asking the consumer to pay for the 
plant, instead of paying a return on the investment. If such a 
consummation is desirable, of which there is no evidence, it 
should be effected openly, and not surreptitiously, under the 
guise of providing for so-called ¢ theoretical depreciation.’ 
“ Mr. Miller testified that, as of April, 1920, the expenditure 
of $6,144.07 for repairs, renewals, and replacements, would put 
the plant, structures, machinery, and equipment in condition 
substantially as good as when they were erected or installed. 
His testimony in this respect was not contradicted by that of 
any witness. This sum, however, does not, in my opinion, 
measure any impairment in the present value of the property 
used and useful in the gas business. It represents merely an 
unmatured obligation to maintain the property in efficient 
operating condition out of future earnings; the expert witness 
of both the complainant and the defendants agreeing that it was 
and is maintained in efficient and first-class condition. I there- 
fore have not deducted this or any other sum representing so- 
called ‘ accrued depreciation ’ from the amount found by me to 
represent the investment of the complainant in its gas property 
upon which it is entitled to have its rate such as to yield a reason- 
able return.” 
This is a strong presentation, too, in favor of the author’s con- 
tention that not value but the legitimate investment in the 
property, should be made the starting point or the basis of the 
calculation, when rates are to be fixed. 
It is of interest to note that in this case in the supplemental 
opinion, Learned Hand, Judge of the District Court (267 Fed., 
p. 231) expressed himself as follows with reference to de- 
preciation.