II.—The Field Inspection.
The field inspection, to be of the greatest value, should be made by civil or mechanical engineers of long experience, preferably by men who have had charge of their respective departments on railroads of considerable extent, or of properties similar to that under investigation. The writer is of the opinion that in this particular phase of the work, the practice adopted in the Michigan appraisal was considerably in advance of more recent valuations. Each particular structure or piece of equipment should be examined and its condition noted; special features should be fully described and careful record made of everything that would tend to affect the value. The argument has been often made that the fixing of a percentage of depreciation by a man in the field is purely arbitrary and amounts to nothing but a guess. In the computing office it is often necessary to check the field figure of depreciation by the use of tables of fixed annual depreciation, but it must be borne in mind that mortality tables of any form are based on a system of averages. The actual depreciation on rail, for instance, varies greatly; the conditions of traffic, curvature, gradient, rolling stock, and various local conditions tend to shorten or lengthen the life, so that the personal opinion of an experienced man on the ground is likely to be much more nearly correct than the arbitrary application of a rule of averages.
The writer has inspected station buildings more than 50 years old, and their condition and adaptability for the service required of them would give them a very high percentage; he is also familiar with buildings less than 10 years old, which, by reason of changed traffic conditions and consequent shifting of business, have become obsolete and have been permitted to depreciate so rapidly that any table average would give too high a result.
In the case of a water-works inspection, so much of the value is included in the system of distribution mains, a form of property which is inaccessible, that much more dependence must be placed on a figure based on age; but there, also, as full investigation as possible should be made, in order to determine to what extent tuberculation or electrolysis has affected the pipes.
A general inspection (made in Minnesota by the appraiser with two assistants) would appear to be an excellent thing as a review of the whole work, but whether such an inspection would be sufficiently thorough to base thereon a set of final values, would appear to be doubtful.
The inspection in the field, in addition to the placing of a percentage for depreciation, should involve a complete check of the inventory, a correction of all errors, due to the construction of new property or the destruction or removal of old, and a compilation of all information required for a complete, correct, and intelligent appraisal of the physical property by the computing office. Every appraisal is different, and every property offers new problems and diverse conditions. These must be met, and therefore the field inspector must call particular attention to all matters specially affecting the values of the property he is inspecting.
It is impossible to anticipate all these conditions in advance, although the use of carefully prepared blanks and the standardizing of the form in which the data are gathered greatly simplify the work, not only in the office, but in the field.