ESSENTIALS OF VALUE 3
of the amount of general expense, of the cost of management,
engineering and supervision of the expenditures due to unforeseen
conditions, of unprofitable expenditures, and of losses by accident,
 that would ordinarily be anticipated in the execution of
similar work under the same general conditions. The finished
plant if constructed under better than average conditions is
entitled to a credit due to this favorable circumstance, and if
constructed under adverse conditions, may not be entitled to an
appraisal at full actual cost.
The determination of the allowance which should be made
for overhead expense is therefore a matter of considerable importance
 as will be seen from the quotations presented here at
some length, which will give a fair idea, based upon experience,
of the actual overhead expense connected with many public
enterprises.
The Special Committee of the Am. Soc. C. E. on the Valuation
of Public Utilities is Cited on Overhead. — In reference to engineering
 as an overhead expense the Special Committee of the
American Society of Civil Engineers on the Valuation of Public
Utilities in the progress report which it submitted in January,
1014, Says:
Am. Soc. C. E. Committee, Engineering. — “ Under the head
Engineering are usually included not only strictly engineering
expenses, but those of other technical employes and of inspectors.
 It is difficult to draw the line between the preliminary
engineering and that during construction, and it is probably
best in most cases to include the part of the preliminary
engineering expenses connected with the preparation of the
final design of the works with those incurred during their construction.

“The percentage of the cost of the work represented by engineering
 differs with the character of the works and with the
amount of care and skill exercised in their design and construction.
 On railroads it is commonly estimated that the
engineering cost will amount to 5 per cent of the physical valuation
 of the property, exclusive of overhead charges. Statistics
of the cost of engineering are available in connection with several
municipal and other works as follows:

4%
9,