THE PURPOSE OF THE APPRAISAL LI 
him, as already set forth, is $64.17 on each $100 of original 
cost, but, as owner, he at once finds that, of his capital ordi- 
narily available for other purposes, an amount equal to 35.83 per 
cent of the cost of a new steamboat is, to all intents and purposes, 
tied up in his steamboat business. It has become dead capital, 
for all purposes except replacement, so long as he remains in 
the steamboat business. This 35-83 per cent at interest at 6 
per cent is necessary to supplement the annuity regularly going 
into the amortization fund, together with which at the end of 
the 20-year period it will just replace the steamer. Whether or 
not the 35.83 per cent is actually set apart is immaterial; the 
fact remains that ownership of the depreciating steamer renders 
this amount of capital as already stated unavailable or dead for 
any purpose other than replacement, and the new owner is 
entitled to interest on this 35.83 per cent just as well as on 
the 64.17 per cent which he paid for the steamer. 
The demonstration of this fact may be made as follows: The 
purchaser of the steamboat, who buys the boat when it has a 
remaining period of usefulness of ro years, invests, as has been 
explained, $64.17 for each $100.00 of the original cost of the 
steamboat. He is unquestionably entitled to interest on this 
sum, together with amortization, which at the assumed interest 
rate of 6 per cent will be: 
Interest at 6 per cent on $64.17 perannum................... 8s 
Amortization annuity for the remaining ro years, during which 
the investment of $64.17 is paid back to the purchaser (87-59 
on each $100)............. et ’ 
This is exactly the same as though, instead of the value of 
the steamboat, the capital originally invested had been taken 
into account, in which case the original owner or purchaser 
would be allowed: 
Interest at 6 per cent on the investment of $100 per annum...... $6.00 
Amortization annuity to retire $100 of the investment within the 
life of the steamboat, that is, within 20 years................ + 72 
Total. os crs eeveaviirasens 23070 
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