Valuation of Public Service Corporations: Legal and Economic Phases of Valuation for Rate Making and Public Purchase. Supplement

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Banks Law Publishing Company, 1912 - Public utilities - 798 pages
 

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Contents

Justice Peckham in Consolidated Gas Case 1909Fair value gener ally includes appreciation 31 Iowa Supreme Court in Cedar Rapids Gas Case 1909Re...
31
costlessdepreciation the controlling factor 32 Oklahoma Supreme Court in Pioneer Telephone Case 1911Repro ductioncostlessdepreciation the contro...
32
District Judge Evans in Cumberland Telephone Company Case 1911Fair value not determined by construction cost
33
Wisconsin Railroad Commission in Manitowoc Water Case 1911
35
Trend of decisions on fair value
36
No authoritative determination of standard of value
37
Recent decisions
38
Valuation standards
39
CHAPTER III
41
Competition in its relation to market value theory
51
Favorable location in its relation to market value theory 50 Monopoly value
55
Reasonable rates can not be based on market value 58 The misplaced or partially obsolete plant 59 Same subjectSan Francisco Water Rate Case 1911
57
Market value the true standardJustice Brewer in Reagan v
58
Value as a going business concernCircuit Judge McCormick in Metropolitan Trust Co v H T C R Co 1898
59
Value as a producing factorCircuit Judge Simonton in Mathew v
62
Market valueDistrict Judge Trieber in Arkansas Rate Cases 1911
63
COST OF REPRODUCTION AS A STANDARD OF VALUE FOR RATE PURPOSES 8 70 Arguments advanced
66
Fluctuations in railroad costsMinnesota rate decisions 72 Trend of recent decisions 73 Identical reproduction of existing plant
71
Identical reproductionWm H Bryan on waterworks appraisals 75 Equally efficient substitute plant
72
Substitute plantMaine water plant condemnations 1902 1904
73
Substitute plantColumbus Ohio Electricity Rate Case 1906
75
Substitute plantDiscussion by J E Willoughby 80 Substitute plantDiscussion by C L Corey 81 Cost under present or original conditions 82 Present or ...
76
Present or original conditionsSt Louis Public Service Commission 1911
79
Present or original conditionsConclusion
81
CHAPTER V
82
CHAPTER VI
102
Sales method defined
103
South Dakota Railroad Commission 1910
110
St Louis Public Service Commission 1911
111
Minnesota Railroad Rate Case 1911
112
Allowance of no return or a reduced rate of return on land
114
Reduced return allowed on terminalsMinnesota Supreme Court 1897
115
Appreciation should be set off against depreciation
119
Appreciation treated as income 123 Appreciation treated as income for purposes of United States cor poration
123
Income method considered
124
Actual cost v present value
125
Cost of reproduction of railroad right of
126
Reproduction cost same as present estimated condemnation cost 135 Multiples used in various state appraisals
127
Minnesota Appraisal and Rate Case
129
South Dakota appraisal 1910
131
Cost of reproduction of terminal land 8 140 State railroad appraisals
134
Minnesota Appraisal and Rate Case 142 Minnesota Rate CaseAvailability for railroad purposes enhances value
141
Wisconsin Railroad Commission on availability for special
143
Value of adjacent land increased by presence of terminal
144
Reproduction cost of land as affected by cost of hypothetical build
145
Sales method rejected in Minnesota Rate Case CHAPTER VII
148
CHAPTER VIII
161
company 1911
169
Maine Water Plant Condemnation Case 1902
176
Company 1912
181
Wisconsin Railroad Commission on services provided at consumers
184
Opinion of C L Corey on services furnished by consumer
185
State and city aid in grade separation improvements
186
Citys grade separation contribution considered by New York Public Service Commission
187
Grade separation contributions in appraisal for capitalization
188
Conclusion as to grade separation contributions
189
Statement of problem of donated property
190
Contributions by the company
191
The more equitable rule
192
CHAPTER XI
202
Average price for period equal to construction period
206
General considerations
207
CHAPTER XII
209
Appraisal of Chicago Consolidated Traction Company 1910
216
Appraisal of Chicago gas plant 1911
217
Cleveland street railway appraisal 1909
218
Columbus Ohio Electricity Rate Case 1906
220
New York Consolidated Gas Case 1907
229
New York Public Service Commission First District 1911
230
Oklahoma Telephone Rate Case 1911
232
Washington railroad appraisal 1908
233
Case 1911
236
Seattle Wash Telephone Rate Case 19101911
237
Wisconsin Railroad Commission 280 Engineering and superintendence 281 Contingencies
238
ContingenciesMichigan railroad appraisal 19001901
241
ContingenciesMassachusetts appraisal of N Y N H H R R 1911
243
Contingencies St Louis Public Service Commission 1911
244
ContingenciesOklahoma Telephone Rate Case 1911
245
ContingenciesWisconsin Railroad Commission 1911
246
Contractors profitSt Louis Public Service Commission 1911
248
Contractors profitValuation of Falmouth Mass water plant
251
Interest during construction
253
InterestMinnesota Railroad Rate Case 1911
254
InterestOklahoma Telephone Rate Case 1911
255
Interest Wisconsin Railroad Commission
256
InterestSt Louis Public Service Commission 1911
257
InterestNew York Public Service Commission First District 1911
258
InterestState railroad appraisals
260
InterestMassachusetts appraisal of N Y N H H R R 1911
261
Promotion and organization
262
PromotionSt Louis Public Service Commission 1911
263
Iowa Gas and Water Rate Cases
300
Lincoln Neb Gas Rate Case 1909
301
PromotionNew York Public Service Commission First District
302
CHAPTER XV
304
CHAPTER XVI
310
CHAPTER XVII
329
Present worth method of measuring depreciation
338
Present worth method applied to a class
339
Present worth method applied to system as a whole
340
Other methods of measuring depreciation
341
Uniform investment cost method of adjusting depreciation 402 New York Public Service Commission First District rejects sink ing fund method
346
Straight line method in New York City Street Railway Fare
348
Depreciation rule contained in uniform water supply accounts 405 Depreciation of overhead charges
353
Oklahoma Supreme Court denies allowance for piecemeal construc
361
Discussion of piecemeal construction
362
CHAPTER XIX
381
Problem of past supersession discussed by Henry Earle Riggs
392
Casualty
400
One per cent allowance on sinking fund basis in Des Moines Iowa Water Rate Case 1910
401
Allowance in San Francisco Water Rate Case 1911
402
1911
423
CHAPTER IX
424
Des Moines Iowa Water Rate Case 1910
428
Missouri Supreme Court in Telephone Rate Case 1911
435
Ten per cent allowance in Arkansas Electricity Rate Case 1911
436
Depreciation allowance refused by California court San Diego Cal Water Rate Case 1897
437
Depreciation allowance refused by Iowa court in 1902 but approved in 1909
438
Depreciation allowance apparently refused by United States Su vreme Court in 1903 but recognized in later cases
439
CHAPTER XXI
440
CHAPTER XXII
448
GOING CONCERN IN RATE CASES 8 550 Texas Railroad Rate Case 1898
466
GOING CONCERN AS THE VALUE OF A CREATED INCOME 580 DefinitionAlvord and Metcalf 581 DefinitionBenezette Williams 582 Going v...
500
method
512
New York Public Service Commission First District disapproves comparative plant method
514
United States District Court in San Francisco Water Rate Case rejects comparative plant method
515
Value of created income bears no direct relation to cost
516
Summary
518
CHAPTER XXIV
520
capitalized
525
Expense of certain litigation excluded
540
Losses due to competition considered
541
Cost of business promotion may be offset by earnings
542
Effect of application of Wisconsin rule on valuations fixed
543
Consideration of Wisconsin rule by courts and other commis
548
New York Public Service Commission disapproves capitalization of early losses
549
Report on Peoria waterworks rates 1910
550
Conclusion
551
CHAPTER XXV
553
Cost of establishing paying businessRate Case
562
Cost of subsequent promotion of businessRate Case
565
Going concern valueRate Case
566
Going concern valuePublic purchase
567
Summary
569
CHAPTER XXVI
572
Connecticut Supreme Court in Purchase Case 1904Earning value but not franchise value considered
582
Lincoln Neb Gas Rate Case 1909
592
APPRAISAL OF FRANCHISE VALUE
629
CHAPTER XXIX
640
CHAPTER XXX
647
Arkansas Supreme Court 19116 to 10 a fair returnLegal rate of interestElectric company 768 Missouri Supreme Court 19116 a reasonable returnTele...
648
United States Circuit Court 1903Legal rate of interest the mini
656
returnRailroad
677
New York Court of Appeals 1911Fair rate of return a question of fact to be determined by lower courtTax Case 772 New York Public Service Comm...
686
Review of attitude of Supreme Court of the United States
687
Review of attitude of federal and state courts
689
Attitude of courts and commissions contrasted 787 Distinction between fair return in an administrative and judicial sense
690
Same distinction upheld by California Supreme Court 1911
691
Federal court in San Francisco Water Rate Case 1908
694
Elements of a reasonable returnWisconsin Railroad Commission
696
Ordinary method of financing in its relation to fair rate of return
700
Three standards of reasonableness 794 Original risk standard
702
Original risk standardCourt decisions
703
Standard of present risk for new enterprise
705
New enterprise standardApproval by commissions and courts
706
Present market rate standard
707
Conclusion
708
The sliding scale and other automatic methods of securing voluntary rate reductions and of rewarding efficient management
710
CHAPTER XXXI
713
CHAPTER XXXII
721
Railroads
726
Street and electric railways
728
Telephone
733
Waterworks
734
Going value
735
Depreciation
743
Index page
747
PROPERTY CONSTRUCTED OUT OF SURPLUS
751
United States Circuit Court 19116 plus 142 for lean years
764
Valuation of property constructed out of surplus 201 Pennsylvania Supreme Court in Brymer v Water Company 1897
775
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Popular passages

Page 607 - What the company is entitled to demand, in order that it may have just compensation, is a fair return upon the reasonable value of the property at the time it is being used for the public.
Page 25 - ... to grant to it, the power to construct and maintain a public highway simply for its benefit, without regard to the rights of the public. But it is equally true that the corporation performing such public services and the people financially interested in its business and affairs have rights that may not be invaded by legislative enactment in disregard of the fundamental guarantees for the protection of property.
Page 36 - And in order to ascertain that value, the original cost of construction, the amount expended in permanent improvements, the amount and market value of its bonds and stock, the present as compared with the original cost of construction, the probable earning capacity of the property under particular rates prescribed by statute, and the sum required to meet operating expenses, are all matters for consideration, and are to be given such weight as may be just and right in each case.
Page 696 - Our social system rests largely upon the sanctity of private property ; and that state or community which seeks to invade it will soon discover the error in the disaster which follows. The slight gain to the consumer, which he would obtain from a reduction in the rates charged by public service corporations, is as nothing compared with his share in the ruin which would be brought about by denying to private property its just reward, thus unsettling values and destroying confidence. On the other hand,...
Page 24 - If a railroad corporation has bonded its property for an amount that exceeds Its fair value or if its capitalization is largely fictitious, it may not impose upon the public the burden of such increased rates as may be required for the purpose of realizing profits upon such excessive valuation or fictitious capitalization...
Page 718 - We hold, however, that the basis of all calculations as to the reasonableness of rates to be charged by a corporation maintaining a highway under legislative sanction must be the fair value of the property being used by it for the convenience of the public.
Page 26 - What the company is entitled to ask is a fair return upon the value of that which it employs for the public convenience. On the other hand, what the public is entitled to demand is that no more be exacted from it for the use of a public highway than the services rendered by it are reasonably worth.
Page 668 - There is no particular rate of compensation which must in all cases and in all parts of the country be regarded as sufficient for capital invested in business enterprises. Such compensation must depend greatly upon circumstances and locality ; among other things, the amount of risk in the business is a most important factor, as well as the locality where the business is conducted and the rate expected and usually realized there upon investments of a somewhat similar nature with regard to the risk...
Page 408 - If, however, a company fails to perform this plain duty and to exact sufficient returns to keep the investment unimpaired, whether this is the result of unwarranted dividends upon over-issues of securities, or of omission to exact proper prices for the output, the fault is its own. When, therefore, a public regulation of its prices comes under question the true value of the property then employed for the purpose of earning a return cannot be enhanced by a consideration of the errors in management...
Page 108 - And we concur with the court below in holding that the value of the property is to be determined as of the time when the inquiry is made regarding the rates. If the property, which legally enters into the consideration of the question of rates, has increased in value since it was acquired, the company is entitled to the benefit of such increase.

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