ESSENTIALS OF VALUE 73 
While this circumstance may justify the inclusion of appre- 
ciation in the appraisal of the rate-base in some cases, there will 
be others where the appreciation is out of all proportion to the 
original investment. Furthermore, a strict analysis will show 
that such inclusion would deprive the rate-payer of any share 
in the unearned increment to which he, too, is a contributor. It 
is, moreover, as already stated, difficult and oftentimes Impos- 
sible to ascertain the rate of appreciation which might fairly be 
taken into account and finally, if appreciation is included in the 
appraisal of land, it should also be included in the appraisal of 
all other kinds of property. Such inclusion would greatly and 
unnecessarily complicate every calculation relating to rates and 
would introduce an element of much uncertainty. It will be 
much simpler and yet fair to all concerned to exclude appre- 
ciation from the rate-base but, as already suggested, to allow 
the owner of every utility to participate in the general prosperity 
by allowing the rate of return on the rate-base to be higher than 
it would otherwise be estimated. 
If this practice coupled with the Unlimited Life Method of 
procedure could be made general there would be no revision of a 
rate-base, once established, except as made necessary by ad- 
ditions to the utility properties or changes therein, nor would 
there be any need of determining present value, and yet the 
unearned increment would not be ignored. It would appear in 
the earnings and not in the rate-base, and the equitable appor- 
tionment of the unearned increment to the utility owner and to 
the rate-payer would be facilitated. 
If the unearned increment (appreciation) is estimated from 
time to time and is treated as income and the total net return 
on the rate-base does not exceed ordinary interest rates on safe 
investments, the estimated appreciation should be added to the 
rate-base in fairness to the owner of the utility. 
If appreciation is estimated from time to time and added to 
the rate-base but is not treated as income, the rate-payer will 
be denied any share thereof. 
If appreciation is ignored, and a rate-base, once determined, 
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