78 VALUATION, DEPRECIATION AND THE RATE-BASE 
down. Under such a rule all relation between the capital legiti- 
mately invested and the cost of reproduction may be lost. In 
a private enterprise the former and not the latter would be used 
as the guide in determining what the earnings should be. But 
the cost of reproduction is generally held to deserve special con- 
sideration when the “fair value,” required by the courts, is to 
be appraised and it is frequently accepted as the starting point. 
When the courts shall have accepted the view that “ fair value 
is not the proper starting point, then the importance of close 
estimates of the cost of reproduction, which includes both de- 
preciation and appreciation, will fall away.