POSSIBLE PROCEDURES IN FIXING RATES I%) 
ity the bond issue, if any, is also to be taken care of. The 
cost of the improvement is, in other words, to be distributed 
fairly to those that will benefit thereby. This is usually done 
by so fixing the term of the bonds that the cost will be distrib- 
uted over a sufficiently long period. of time. The determina- 
tion of this time period need not be in any definite relation to 
the life of the parts of the improvement. The improvement 
itself will usually be one that may be regarded as having un- 
limited life, such as parks, playgrounds, streets, and the like. 
When the term of the bonds of longest life has been fixed on the 
basis of the probable life of the main elements of the improve- 
ment, or in some other way, then a determination must be reached 
as to the best and most equitable rate of amortization. 
This amortization may take place at a uniform rate per year, 
bearing heavily on present day property owners — Straight Line 
Method. 
It may take place at an increasing rate per year: 
(a) According to the scheme outlined under the Equal Annual 
Payment Method. 
(6) According to any arbitrary scheme that will approximate 
the compound interest Sinking Fund Method of estimating the 
annual amortization increment. 
Or, it may be deferred for a time and then take place accord- 
ing to either of these methods. 
In the case of a public service property constructed by a 
municipality the amortization of capital usually begins at or 
soon after the acquisition of the property and in the case of a 
utility constructed by a private owner, the amortization of 
capital should begin under the Straight Line Method and the 
Equal Annual Payment Method at the beginning of operation, 
and, theoretically under the Sinking Fund Method or the Un- 
limited Life Method as herein fully explained, not at all in so 
far as rate-base determination is concerned, during the continu- 
ance of full private ownership. 
In Fig. 3 a comparison is made between the annual amortiza- 
tion allowance computed by the Straight Line Method and the 
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