ELEMENTS DESERVING SPECIAL CONSIDERATION 289
extremes is most likely to prove true, whether, for example, the
last word has been said in the manufacture of gas and there will
be no further abandonment of standard gas making appliances
and processes, or whether, due to exhaustion of sources of oil, or
due to other causes, there may not be found some new substitute
for oil or for the gas itself which will render some of the most
modern appliances of the day obsolete in the near future.
Past experience in the matter of abandonment of property,
due to obsolescence, is not a dependable guide to what may
happen in the future. In this respect there is a difference between
 the failures from this cause and those which result from
the wear and tear of use and from the somewhat less regular
failures through accidents incident to human frailty, fire and
similar causes. In the one case the basis for a satisfactory prediction
 is lacking. In the other the probability of events occurring
 in the future can be predicated with some confidence upon
what has occurred in the past. There is a difference, too, between
replacements made as the result of obsolescence and replacements
 due to failure from other causes. In the case of obsolescence
 the replacement is made with some device which betters
the service — the output costs less, or the service is made more
reliable or the quality of the output is improved, while in the
case of ordinary replacements or renewals the betterment of
service is not a necessary incident.
Treatment of Obsolescence and Replacement Compared. —
It is proper to charge the rate-payer with the cost of replacement
when property fails from ordinary causes and to let the earnings,
therefore, cover a replacement increment during the useful life
of any item of property and to base the charge on the ordinary
replacement requirement as determined for such property. Not
so, however, in the case of obsolescence. This will be made plain
by the following considerations:
There would be no obsolescence if the improved machinery or
the new process which takes the place of that which is being
replaced did not result in advantage to some one. If the obsolete
 property has been treated as though its failure could have