ESSENTIALS OF VALUE 77 
be current or comparatively recent prices and the general con- 
ditions as they exist at the time of the appraisal. Such repro- 
duction cost will include appreciation whether the same be 
enhanced value of real estate or increased cost of construction 
due to higher wages and higher prices of materials, or due to 
other conditions at variance with those which prevailed when the 
work was first done. Such appreciation comes up for con- 
sideration in the case of a pipe line which was laid before the 
street was paved but which is to be appraised after the street has 
been paved. The cost of reproduction in this case includes the 
cost of cutting through and replacing the pavement. This cost 
of reproduction may be some indication of present value but it 
is not a good measure of the investment, and at its best will be 
more or less unsatisfactory as a method of approximating the 
amount on which interest should be earned. Or a pipe which 
is to be valued may have been laid along an ungraded street. 
It may have been laid in a temporary trench to be deepened 
when the street was graded or it may have been placed in a 
deep trench. The cost of reproduction, if estimated after the 
street has been graded, will again fail to indicate correctly the 
amount invested in the pipe and is not entirely satisfactory be- 
cause the first cost of a deep trench or the lowering of the pipe 
during the work of grading were legitimate expenditures which 
the owner of the public utility, if he had been an agent of the 
rate-payer, would have been justified in incurring. Such con- 
siderations as these show how unsatisfactory any close adherence 
to the cost of reproduction may be and they show, too, that a 
wide latitude is sometimes allowable when the legitimate invest- 
ment is approximated by estimating the cost of reproduction. 
Furthermore, this method can hardly be applied satisfactorily 
without adopting some definite rule in the matter of valuing real 
estate. Suppose the rule to be that real estate and all other 
property be appraised on the assumption of present day cost of 
acquisition and construction, disregarding low original cost, dona- 
tions and all other factors and conditions that may have pre- 
vailed at the time of construction and that may have kept cost