2006 VALUATION, DEPRECIATION AND THE RATE-BASE 
~ “Assuming that the company is entitled to a reasonable share 
in the general prosperity of the communities which it serves, 
and thus to attribute to its property an increase in value, still 
the increase so allowed, apart from any improvements it may 
make, cannot properly extend beyond the fair average of the 
normal market value of land in the vicinity having a similar 
character. Otherwise we enter into the realm of mere conjec- 
ture. We, therefore, hold that it was error to base the estimates 
of the value of the right-of-way, yards and terminals upon the 
so-called ‘railway value’ of the property. The company would 
certainly have no ground of complaint if it were allowed a value 
for these lands equal to the fair average market value of similar 
land in the vicinity, without additions by the use of multipliers, 
or otherwise, to cover hypothetical outlays.” 
The Court in this decision may be correct in stating that 
market value should be determined without the use of multi- 
pliers. Nevertheless the fact that rights of way are actually 
costing from 25 to 200 per cent more than lands of similar char- 
acter in the same vicinity will have an unquestioned effect upon 
the market value of lands required for other rights of way and 
this effect cannot well be ignored when such lands are to be 
valued. 
Right-of-Way Value in the Georgia Railway Case. — Special 
Master Thorington, in the Georgia Railway Case (Central of 
Georgia Railway Company vs. Railroad Commission of Alabama, 
U.S. Dist. Court, Middle Dist. of Ala., Northern Division, 
Report of Wm. S. Thorington, Special Master, Jan. 8, 1912), 
after stating that the fact that the railroad company is com- 
pelled to pay in addition to its market value a further sum due 
to damages or because it is a railroad company making the 
purchase adds nothing whatever to the actual acreage value, 
says: 
“Tt is, however, proper to add that right-of-way values, 
including estimates for damages to property not taken, or excess 
cost that railroads are compelled to pay in order to acquire 
right-of-way property needed by them for railroad use, have 
been recognized by some courts, and some railroad commissions, 
and such excess cost was held to properly constitute part of the