fullscreen: Valuation, depreciation and the rate base

DEFINITIONS 
the same kind, as for example telegraph poles, be recorded it will 
be found that a few fail almost immediately, being destroyed by 
storms, by fire or by accidents, that a larger number will fail 
within a few years due to inherent defects in the timber and 
other causes in addition to the causes of failure already named, 
that failures will multiply at some period such as 10 to 15 years 
according to the character of the timber of which the poles are 
constructed and that some will survive many years beyond the 
average life term of all. From such records the probable life 
term of a new pole is ascertained; but while this probable life, 
here synonymous with average life, is known or can be ascer- 
tained as explained, the actual life of individual poles will depart 
therefrom more or less. The total number of service years of 
the poles which fail early will fall short of the expected total 
number by as many service years as those of the poles which 
survive the probable term will exceed this number. 
Expectancy or Remaining Life. — The expectancy of any 
article is the probable time, usually expressed in years, during 
which it may reasonably be expected to render efficient service. 
For a new article the expectancy is its probable life. When the 
life of a candle which will burn for a number of hours is under 
consideration, the expectancy is ascertained by subtracting age 
from probable life new. But in all ordinary cases the expectancy 
cannot be ascertained by any such simple mathematical process. 
Every article which has been in service for some years, and has 
escaped the accidents which might have put it out of business 
in its early life, stands a better chance of being among those 
which will outlive the probable life term fixed for it when it was 
new, than it had when new to outlive this term. Consequently 
the expectancy is not to be determined by subtracting age from 
probable life. It is to be determined from the actual con- 
dition of the article and all local circumstances which may 
affect its continued usefulness. 
A high-duty pump, which originally had a probable life of 
25 years, when it reaches the end of this term, may be in a con- 
dition almost as good as new. It has escaped the possible acci- 
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