. Electric railway journal . RNSEYS paper is asplendid exposition of a mostimportant topic and is whatmight be expected from one who hashad the experience of Mr. Guernseyin valuation work. One method of determining valueupon which the author dwells atltngth is the cost of theory, if consistently appliedwithout the trained, seasoned judg-ment to which he refers severaltimes, will sometimes lead to erro-neous if not ludicrous results. Thisis, indeed, the situation regardlessof what premise or theory is adoptedin determinging the fair value of aproperty furnishing public service
. Electric railway journal . RNSEYS paper is asplendid exposition of a mostimportant topic and is whatmight be expected from one who hashad the experience of Mr. Guernseyin valuation work. One method of determining valueupon which the author dwells atltngth is the cost of theory, if consistently appliedwithout the trained, seasoned judg-ment to which he refers severaltimes, will sometimes lead to erro-neous if not ludicrous results. Thisis, indeed, the situation regardlessof what premise or theory is adoptedin determinging the fair value of aproperty furnishing public service. Many modifications of this cost-of-reproduction theory are necessaryin determining unit prices. It issometimes thought that present-day prices should pre-vail. Again, the fair value is sometimes determined byusing average prices. There may be used, as was donein the Chicago telephone appraisal, average trend pricesor, as in several large appraisals lately completed, theunit prices may be ascertained by obtaining a weighted. ♦Abstract of an address delivered at the mid-year meeting of<he American Electric Railway Association on Feb. 4. average covering the prices andamounts of material during the timewhile the major portion of the workwas being installed. Similarly, inmaking an inventory, many per-plexing questions arise which requirea departure from the cost-of-repro-duction theory, if a logical conclusionis to be drawn. Recently, during one of the con-ferences between the steam roadsand the valuation committee of theInterstate Commerce Commission,the question arose as to whether invaluing grading, the same topo-graphic conditions should be as-sumed to prevail at the time of mak-ing the appraisal as at the time ofthe original construction of the case in point was where a gravelpit, since exhausted, was on theright-of-way of the Union Pacific Railway, whereas nowa haul of several hundred miles would be necessary toobtain gravel. Therefore, even the cost-of-producti
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