"The worth of the physical property is primarily that on which the value of the whole property rests."
The thought which the writer would place in opposition to the foregoing is that: Physical property has no value which is not an expression of its adaptation to economic needs. This is only another way of expressing the inevitable economic law, from which there is no escape, either in theory or in practice, that has been stated and sanctioned by the Supreme Court of the United States, as follows:
"But the value of property results from the use to which it is put, and varies with the profitableness of that use, present and prospective, actual and anticipated. There is no pecuniary value outside of that which results from such use."[[37]]
Mr. Riggs' own definition of value is not inconsistent with the foregoing. He says:
"The value of a property is its estimated worth at a given time, measured in money, taking into account all the elements which add to its usefulness or desirability as a business or profit-earning proposition."
The view of Mr. Riggs is that:
"While ... the worth of the physical property, being the cost of reproduction less depreciation, is not necessarily the value of the property, ... the physical worth must bear some very definite relation to value...."
And he is, further:
"Strongly of the conviction that this relation is such that 'value' cannot be ascertained without a determination of physical worth."
It is exceedingly difficult to comprehend just what Mr. Riggs means when he describes the relation between real value (which he recognizes so clearly as value in use) and cost of replacement as "very definite." Certainly, he does not mean that it is a constant relation, or one which can be ascertained until there has been independent determination of both of the aggregates whose relation it expresses. In fact, the emphasis which Mr. Riggs places on replacement cost has led him into the grotesque fallacy of arguing that a correct estimate of real value is only to be attained by ascertaining: (first) cost of replacement, (second) real value, and (third) correcting the aggregate first obtained by applying whatever "very definite" relation (ratio) is necessary to make it agree with the second aggregate, which was from the beginning the only aggregate really wanted. The accuracy of this characterization of his proposed procedure is made perfectly clear by the following quotation: