ESSENTIALS OF VALUE 5 
create. This can best be allowed him, not in estimating actual 
appreciation, which is more or less uncertain and irregular, and, 
therefore, not always dependable, but in a suitable interest 
return on the original investment. 
Interstate Commerce Commission Comments on U. S. Supreme 
Court Decision. — The difficulty of conforming to the decision 
of the United States Supreme Court in the matter of allowing the 
appreciation of real estate was felt by the Interstate Commerce 
Commission of the United States which says in its opinion in the 
Western Advanced Rate Case (20 I. C. C. Rep. 344, decided 
Feb. 22, 1911): 
“ Certainly if the Supreme Court may decline to lay down 
the absolute rule that ‘in every case failure to produce some 
profit to those who have invested their money in the building of 
a road is conclusive that the tariff is unjust and unreasonable’ 
(Reagan vs. Farmer Loan and Trust Co. 154 U. S. 412), itis a 
conservative statement of the law to hold that a railroad may 
not increase the rates upon a number of commodities solely be- 
cause its real estate has risen in value.” 
“ While it is evident, therefore, that each case must be decided 
upon the facts peculiar to it, the Commission believes it proper 
in this case to follow the general rule, as stated by Judge Hough 
of the United States Circuit Court (Consolidated Gas Co. vs. 
City of New York et al., 157 Fed. Rep. 849, 855), ‘ Upon reason, 
it seems clear that in solving this equation the plus and minus 
quantities should be equally considered, and appreciation and 
depreciation treated alike.’ . . . Thus land has been taken at 
its fair value and not at its original cost, and the annual ap- 
preciation of land has been treated as a profit. By this method 
all property is treated absolutely alike, as Judge Hough sug- 
gests. No difference is made, except that as depreciation 
represents a decrease in assets, it is placed as a debit against 
operation, while appreciation is placed as a credit because it 
is an increase in assets.” 
Treatment of Appreciation and Depreciation. — The real 
difference between the way in which depreciation and appre- 
ciation should be treated has apparently been overlooked by 
the courts but recognized by the Interstate Commerce Com- 
72