Page:Walter Renton Ingalls - Wealth and Income of the American People (1924).pdf/136

114 railroad construction. The cost of the lands for the 50 roads mentioned was $347,741,031. It is estimated that this would have to be at least doubled, so that if this correction is made their estimate of the cost of reproduction new would be, for land, $695,482,062, based upon the prices of June 30, 1914. At the request of the Interstate Commerce Commission, Congress on June 7, 1922, passed an act relieving the Commission of the duty of finding the cost of acquiring land. It is not likely, however, that this will affect the determination of final values.

5. “The carriers have complained bitterly of the attitude of the Interstate Commerce Commission in fixing what they claim to be indefensibly low unit prices in construction, in minimizing the period which would have to be covered by construction, in the underestimate of the value of lands acquired, in not including interest on land acquired for the period of construction, and in writing down property through a misapplication of the theory of depreciation.

6. “Comparisons which we have been able to make indicate that based on the prices of June 30, 1914, as against the cost of reproduction new, the theory of depreciation, as applied by the Interstate Commerce Commission, effects a reduction of from 16 to 23 per cent, and that the effect of this application of their theory of depreciation would be to write down the cost of reproduction new in its total by about 20 per cent. This deduction for depreciation is certainly excessive and I feel satisfied will, when passed by the Supreme Court, be held to be unwarranted. No consideration has been given to certain well recognized influences of appreciation in value such as adaptation and solidification of road bed, etc.