Charles Evans Hughes

“ Appellant relies upon the estimate of engineers as to the cost of reproduction new of the physical property, as of September 1, 1929, together with 'all additional expenditures required over and above the bare cost of the physical property, to put the bridge in operation as an income-producing property.' This estimate gave a total cost of reproduction new less depreciation (the estimate being exclusive of two other elements of alleged intangible value described as 'attached business value' and 'location value') of $875,644.30. ”

“ Appellant complains that the amount prescribed for gross revenue is inadequate. Appellant contests the annual allowance for depreciation and the rate at which the fair return is calculated.
The commission fixed the annual depreciation allowance at $7,678 and the court approved it. This amount equals 1 per cent. of the fair value. Appellant contends that the allowance should be 2 1/2 per cent. of the value of the depreciable property on the straight line basis. The difference-on appellant's calculation of the fair value-amounts to $13,434. The court approved the ruling of the commission. ”

“ With this understanding, the question is as to the amount which should annually be allowed which will serve adequately to protect the investment from impairment due to age and use. Testimony was given by one of appellant's engineers that the average life of a concrete bridge was from 30 to 50 years; by another, that the period for which this bridge might be expected to remain useful was 'from 40 to 80 years,' he 'would not figure on over 40.' Another testified that physically the bridge 'might have a life of 50 to 100 years.' The commission's engineer estimated its life at from 40 to 50 years ”

“ To sustain the contention that the actual cost of the structure was less than a reasonable cost at the time, it was necessary for the appellant to give convicing proof. But such proof is lacking. We find no satisfactory basis for holding that the fair value of the property in June, 1926, was greater than $767,800 as it was then determined to be. ”

“ The straight line method advocated by the company will in fifty years with 4 per cent. simple interest produce a fund twice as great as that necessary to replace the bridge. The straight line method is often used for short-lived structures, or plants of a character that they can be restored from time to time to the original condition of efficiency. * * * It is not so fair or equitable when applied to a long-lived structure or one that is disintegrating gradually and continuously and not capable of being restored to its original condition. ”