ESSENTIALS OF VALUE 55
respondent contended that 22 per cent for overhead is not excessive
 and that there are cases in which such additions have
been as high as 51 per cent.
Mr. W. D. Pence of the engineering staff of the Commission
testifying to an appraisal of the property made in 19o7 says the
basis was:
Four per cent for engineering and superintendence.
Two per cent for organization and legal expense.
Three per cent for contingencies.
Three per cent for interest during construction.
Mr. Beggs, the manager of the Company, stated that contractor’s
 profit would be at least 15 per cent of cost of labor and
materials. (The Commission included contractor's profit in
unit prices.)
Mr. Beggs also claimed that interest during construction
could not be less than 5 to 73 per cent and engineering from 5 to
63 per cent.
Prof. M. E. Cooley in revising the staff’s figures allowed 5 per
cent for contingencies during construction on all items except
land, furniture, etc., besides 5 per cent for contingent omissions
on the investment not including land, cars and car equipment;
4 per cent for engineering, 3 per cent for insurance, 23 per cent
for organization and legal expense, and 6 per cent interest; total
22 per cent.
Mr. M. G. Starrett on behalf of the Company claimed 4 per
cent for engineering and superintendence, 2 per cent for organization
 and legal expense, 3 per cent for interest, 5 per cent for
contingencies of construction, g per cent discount on bonds and
I per cent for working capital; total 24 per cent.
The Commission as the result of a study of 30 cases of actual
expenditures finds a range of 4.5 to 23.43 per cent and an average
 of 10.13 per cent for engineering, superintendence, organization
 and legal expense and interest during construction. This
does not include contingencies. Some of the individual percentages
 were low because a portion of the cost of supervising
extensions was charged to construction.