[10]. Transactions, Am Soc. C. E., Vol. LII. p. 359.
The Minnesota State Railway Appraisal.
The valuation of railway properties in the State of Minnesota was undertaken with a view to establishing a basis for rate-making. The work was in charge of Mr. Dwight C. Morgan, Engineer of the Railroad and Warehouse Commission of the State, whose full and complete report is a very valuable addition to the literature of valuation practice. This work was undertaken after the completion of that in Michigan and Wisconsin, and advantage was taken of the experiences of the appraisers in these two States. The Wisconsin plan of co-operation with the railroads was adopted, and each company scheduled and appraised its own lines.
The "cost of reproduction," and "present value of physical properties" were the two sets of figures shown in the final results.
Unit prices were fixed on the basis of current prices in 1905, in preference to an average of 5 or 10 years.
Apportionment of locomotives and rolling stock was made on an engine- and car-mileage basis. The organization of an office force was undertaken, and special study was made of the subjects of unit prices and the various local conditions surrounding the different properties, checking of quantities of earthwork, rails, etc., and preparing to harmonize and unify the estimates as they should be received from the railroads.
The greatest difference between this work and that in the other States was the fact that the field inspection, instead of being made by many men, was made by Appraiser Morgan, accompanied by two assistants, inspection being made in a special train, which was paid for by the State.
The detailed reports of the railroad companies were completed and in the hands of the appraiser, maps and profiles of the road were prepared and available, the train was run at slow speed, and many stops were made for examination of bridges, culverts, and structures. About 100 miles per day were covered, but this did not include the larger terminals of St. Paul, Minneapolis, and Duluth, which were given many days.
In the preparation of final summaries, percentage values were placed as follows: