(B) The values of physical property are not original cost, but are cost of reproduction less depreciation.
(C) Some of the property cost more than new articles of the same kind at the time of inquiry. Some are of designs not now favored by the scientific and manufacturing world.
The disputed questions involved, as far as tangible property is concerned, were:
1.—Whether the values ascribed to the several enumerated items are based on competent and persuasive evidence.
2.—Whether the method of valuation pursued by the master is in accordance with law.
3.—Whether the items of property are "employed" (in the legal signification of the word) in the production of gas.
The first, a question of fact, is found affirmatively, and the evidence was found to be competent.
The second question is one of law, and, quoting from the cases cited in this paper, the Court holds as follows:
"This method of valuation correct * * * upon reason it seems clear that in solving this equation the plus and minus quantities should be equally considered and appreciation and depreciation treated alike.... The value of the investment of any manufacturer, in plant, factory, or goods, or all three, is what his possessions would sell for upon a fair transfer from a willing vendor to a willing buyer, and it can make no difference that such a value is affected by the efforts of himself or others, by whim or fashion, or (what is really the same thing) by the advance of land values in the opinion of the buying public. It is equally immaterial that such value is affected by difficulties of reproduction. If it be true that a pipe line under the New York of 1907 is worth more than was a pipe line under the city of 1827, then the owner thereof owns that value, and that such advance arose wholly or partly from difficulties of duplication created by the city itself is a matter of no moment. Indeed, the causes of either appreciation or depreciation are alike unimportant if the fact of value be conceded or proved; but that ultimate inquiry is oftentimes so difficult that original cost, and reasons for changes in value, become legitimate subjects of investigation as checks upon expert estimates, or bookkeeping, inaccurate and perhaps intentionally misleading. * * *
"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. Its usefulness commonly depends on the business purposes to which it is or may be applied. 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. Nor can it be inferred that such government intended to deny the application of economic laws to valuation of increments earned or unearned, while insisting on the usual results thereof in the case of equally unearned and possibly unmerited depreciation.