Property value

“ The so-called money value of real or personal property is but a conveniently short method of expressing present potential usefulness, and 'investment' becomes meaningless if construed to mean what the thing invested in cost generations ago. Property, whether real or personal, is only valuable when useful. ”

“ The property is considered as an operating property in the sense that it is reproduced complete, ready to operate; and any expense, or any element of value needed to complete it, is an element of the physical value, but any value arising as a result of surplus earning power, any good-will value, going-concern value, or value due to established business, strategic location, favorable traffic arrangements, etc., should be considered as intangible values. ”

“ There may be some question as to the propriety of using non-physical values for certain ultimate ends; in fact, the Supreme Court, in the Omaha and Knoxville water cases, clearly indicates that they must not be used for certain purposes; but, in any case, to furnish information, this element of value should be determined, and, as in the case of physical values, it should be an unchangeable figure [18] and should represent the difference between the worth of the actual physical property and the final business value of the property considered as an earning proposition. ”

“ In an economical point of view, the best system of landed property is that in which land is most completely an object of commerce; passing readily from hand to hand when a buyer can be found to whom it is worth while to offer a greater sum for the land, than the value of the income drawn from it by its existing possessor. This of course is not meant of ornamental property, which is a source of expense, not profit ”

“ The amount of money actually invested in acquiring that physical property represents the measure of capital on which it is morally entitled to earn interest and profit; and, in the stage of promoting and financing the enterprise, all hope of earnings is based on the amount of money required to construct the property. These considerations lead the writer to contend that the true method of valuing a corporate property is first to determine the cost of reproduction of the property and its depreciation, and modify this figure by any applicable positive or negative non-physical elements of value. ”

“ The advance in the value of property during a series of years can, in no just sense, be considered the gains, profits, or income of any one particular year of the series, although the entire amount of the advance be at one time turned into money by a sale of the property. ”

“ The owners of personal property avoid their obligations in a manner still more reprehensible. They either conceal it or lie about it. While its amount during the past forty years has reached the enormous total of $18,000,000,000, or more than four times the value of the real estate, its assessed value has not increased. ”

“ Reproduction Value.—In ascertaining the reproduction value, the aim should be to obtain prices for which the material could be purchased and the work let to responsible parties at the date of the valuation. Real estate and depreciation are probably the two items in which there will be the largest differences in opinion as to values, and both should be determined by the personal examination of experts, following some prearranged system. ”

“ For property which can be regarded as a condition of the performance of function, like the tools of the craftsman, or the holding of the peasant, or the personal possessions which contribute to a life of health and efficiency, forms an insignificant proportion, as far as its value is concerned, of the property rights existing at present. ”

“ If improvements made in the vicinity of the property, the growth of city or town where it is located, the building of railroads, the development of the surrounding country and other like causes, give property an increased value, the owner cannot be deprived of such income by legislative action which prevents him from realizing an income commensurate with the enhanced value of his property. ”

“ A large part of the value of property in civilized communities has been built up by its inter-related uses; but it is a value ultimately reflected in earning capacity and the price at which the property may be sold, and hence is an element to which weight may appropriately be given in determining its taxable value. ”

“ If personal property was acquired by specific bequest, or if real property was acquired by general or specific devise or by intestacy, the basis shall be the fair market value of the property at the time of the death of the decedent. ”

“ The adoption of any rule which will assign a "going value" to a property which has been managed so that it not only has never earned a large return on the investment, but has not taken care of depreciation—a property which would not appeal to financial men as a sound investment at its physical valuation—will not only be difficult to sustain in the Courts, but will tend to discredit the entire subject of valuation. ”

“ The market value of property is what it will bring when sold as such property is ordinarily sold in the community where it is situated; and the fact that it is its market value cannot be questioned because attributed somewhat to good will, franchise, skillful management of the property, or any other legitimate agency.
'It will, we think, be conceded that the earning capacity of real estate owned by individuals may be considered in fixing its value for taxation. Take an office building on a prominent street in one of our large cities. ”

“ The full and true value of the property is the amount that the owner would be entitled to receive as just compensation upon a taking of that property by the state or the United States in the exertion of the power of eminent domain. ”

“ The actual value of such property obviously depends upon a variety of considerations—among them the actual and prospective number of consumers—and is no more unchangeable than the value of any other kind of property. ”

“ A more rational conception of the exact nature of property, or rather of what property consists, would, however, seem to lead to this conclusion, namely, that property, at least for the purpose of taxation, is always a physical actuality, with inhering rights or titles, the product solely of labor, and is always measured in respect to value and for exchange by labor. ”

“ As the company may not be protected in its actual investment, if the value of its property be plainly less, so the making of a just return for the use of the property involves the recognition of its fair value if it be more than its cost. The property is held in private ownership, and it is that property, and not the original cost of it, of which the owner may not be deprived without due process of law. ”

“ He may have papers to show that he is the owner, and that he is at the expense of keeping it up, and that he pays the taxes; but, after all, the real value of the property is in its beauty and the joy it gives to the beholder ”

“ Many properties have been built in the United States, representing large investments of capital, which are not, and some of which can never be, profitable business investments. In all such the physical valuation will exceed the final value where the property is considered as an operating concern, and a negative factor to cover improper location, uneconomical design, ill-advised investment, or whatever the trouble may be, should be applied. ”

“ It is believed that enough argument has been adduced to show that any attempt to give separate value to the different elements that enter into the intangible value of a property is a very risky proceeding on the part of appraisers, and to support further the contention that, as a business proposition, the value of any property depends on its earnings; that the franchise simply protects the owners of the property in their enjoyment of those earnings ”

“ There seems to be no good reason for allowing lost interest during construction as an item in the physical valuation of a property, any more than for allowing all of the lost interest, up to the time when the property begins to yield a return equal to the rate of interest. It is one of the problems in finance, and is much better treated as an element in the going value, as shown in the above illustration. ”

“ While a much longer time might be allowed to assert this right in regard to real estate whose value is fixed, on which no outlay is made for improvement, and but little change in value, the class of property here considered, subject to the most rapid, frequent, and violent fluctuations in value of any thing known as property, requires prompt action in all who hold an option, whether they will share its risks, or stand clear of them. ”

“ It is improbable that a reasonable profit on the fair value of the property could be construed to mean less than the interest or revenue from a like amount of Government bonds or other non-taxable securities. ”

“ Unless it can be seen to possess inherent value entirely apart from the earning capacity of the subsequent investment or from the actual earnings resulting from such investment, the value asserted or claimed is but a duplication of that derived from the use of the tangible property when so invested. ”

“ In view of the clear language of the Court in 82 Fed., 839, and 157 Fed., 849, it is evident that any valuation which does not take into account the appreciation or depreciation of land values cannot be sustained. There can be no serious objection to the doctrine that the property of a corporation generally increases or decreases in value in the same proportion as adjacent property, and it must therefore be admitted that a value based on the sale value of adjacent lands is a reasonable one and must stand. ”

“ Such business is a living thing, and may flourish or wither, appreciate or depreciate; but, whatever happens, its present usefulness, expressed in financial terms, must be its value. * * * It is not to be inferred that any American government intended when granting a franchise, not only to regulate the business transacted thereunder, and reasonably to limit the profits thereof, but to prevent the valuation of purely private property in the ordinary economic manner, and the property now under consideration is as much private property as are the belongings of any private citizen. ”

“ In this sense, all kinds of real and personal property would be embraced by it, for they all have an estimated value as the subjects of sale. Neither does it necessarily include all forms of investment in which the interest of the owner is expressed in money. ”

“ I make what use I choose of the ground to walk upon, and you will never convince me that the nominal owner of the property which I have appropriated gets better value out of the money it yields him than I do out of his land. ”

“ It is evident, for instance, that if a piece of land which is worth to-day one thousand francs was worth only five centimes when it was usurped, we really lose only the value of five centimes. A square league of earth would be hardly sufficient to support a savage in distress; to-day it supplies one thousand persons with the means of existence. Nine hundred and ninety-nine parts of this land is the legitimate property of the possessors ”

“ As property it is distinguished from actual money chiefly in this respect, that its profitable management sometimes requires that portions of it be appropriated to local objects in the States wherein it may happen to lie, as would be done by any prudent proprietor to enhance the sale value of his private domain. ”

“ On the other hand, it is equally evident that the same proprietors could not overestimate the value of their property, in order to increase their incomes beyond the limits of the law, since the tenants and farmers, with their old leases in their hands, would enter a protest. ”

“ The value of the property may be insufficient to pay all claims, and it becomes a matter of great consequence to settle whether any, and if so which, have priority over the others, or whether all rank alike and have to divide the proceeds of the property pro ratâ amongst them. ”

“ Lawyer: Yes, I think that is true, and illustrates in another way that there is or may be a real difference between property and wealth; however, it may be said that in conversation we often use the words wealth and property without much, if any, distinction. It seems to me that we should note this particular difference. Wealth consists of property convertible into money, and therefore implies exchangeability, while property may not mean wealth at all, because the property has no exchangeable value. ”