ETHICAL PRINCIPLE IN PHYSICAL VALUATION 163 



nothing is due him for promoting, managing or by way of compensation 

 for hazarding loss. 



Further, profits are the basis of speculative activities, and the one 

 thing that must be recognized above all others, and without which no 

 valuation can be made justly or equitably, is that public utilities are not 

 speculative in character. If they become so at any time, the speculative 

 element must be excised ruthlessly and surely. 



A point around which much discussion hangs is the character and 

 place of "going concern value." Once we have taken care of absolute 

 maintenance and the deficit theory, together with the accompanying 

 details of surplus and profit, there is nothing left of " going concern." 

 It is an inclusive term to cover matters not fully grasped in the early 

 days of the valuation discussion, and should have no place to-day. 



In conclusion, we must admit that in applying any principle to the 

 adjustment of human affairs, the personal element must be recognized. 

 There is always the matter of wise and unwise payments in tlie construc- 

 tion period; the personal honesty of oflBcials especially during the period 

 of development. What are we to do with the case of a trolley concern 

 that builds to develop a subdivision? If, through greatly facilitated 

 communication, the subdivision prospers, if the promoters of the real 

 estate transaction and of the trolley company are one, if also the real 

 estate deal produces big profits, but the trolley runs at a deficit, what 

 is to be done? It is useless to deny that complications of the most 

 puzzling kind will be found in arriving at valuations for any purpose. 

 Questions innumerable will arise involving equity, the early history and 

 conduct of absorbed utilities, subsidiary companies, and a complexity of 

 others. But if a few basic principles can be established and adhered to ; 

 if the courts can be prevented from piling up a mass of conflicting, base- 

 less precedents that will become millstones about the neck of the ap- 

 praiser ; if skilled appraisers are sought ; and if the great, the tremendous 

 importance of these valuations and their profound influence on social 

 and economic conditions are recognized, there is a hopeful future for 

 public service utilities, their producers and their users. 



