公允價(jià)值的利率施行【外文翻譯】

1、本科畢業(yè)論文設(shè)計(jì)外 文 翻 譯外文出處 New York City 外文作者 原文：FAIR VALUE FOR RATE PURPOSES In considering fair value for rate purposes it is important to bear in mind that the determination of fair value is a part of the process of determining a reasonable rate of charge. The content of fair value may therefore depend

2、largely on our conception of what constitutes rate reasonableness. It will aid to a clearer determination of this intricate problem if for the moment we forget "fair value" and concentrate our attention on the fundamentals of a reasonable rate of charge. By "reasonable rate" as h

3、ere used we mean the reasonableness of the rate schedule as a whole, and not the adjustment of the various specific rates that go to make up the complete rate schedule. It is the total price or compensation collected from the public for its entire service, rather than the price for any particular se

4、rvice or class of services. A reasonable rate of charge in this sense of a reasonable rate schedule is a rate that gives the company reasonable compensation for the entire service which it renders the public.What, then, is reasonable compensation in the case of the appropriate and normally successfu

5、l public utility enterprises?Reasonable compensation is here equivalent to the normal cost of production. What other basis can there be for the determination of a fair price in the case of a virtual monopoly?If a commodity can be freely and quickly produced, its market price will follow quite closel

6、y its cost of production. This must be so, because under the assumed conditions there could be no reason for paying more than the cost of production.If a commodity may be freely produced, but only by specially trained workmen, a large fixed investment, and great business risks, the cost of productio

7、n will still in the long run tend to limit market price. It is clear that the production of a particular commodity will not be permanently carried on unless the price received covers all the costs of production. Under free competition it is also clear that a price higher than that necessary to cover

8、 special risk, interest, profits, and operating expenses will bring new capital into the industry, and thus bring the price down to the cost of production.For a freely produced commodity, therefore, a price that does not conform to cost of production is not a stable or normal price. In a static soci

9、ety, with perfectly free competitionThe market price would conform to cost of production. In our present highly dynamic society, with many actual limitations upon perfect freedom of competition, market price and cost of production are often very far apart. Economists have used the term " normal

10、 price " to indicate in the case of a freely produced commodity that price that corresponds to cost of production. It is the normal price, because it is the price toward which market prices tend; it is the price that under assumed conditions would be stable.The above presupposes competitive con

11、ditions. In the case of unregulated virtual monopoly the force that tends to limit prices charged to the cost of production is lacking. This creates the necessity for public regulation of the rates of charge of public service companies. The aim of public regulation is to accomplish what in other ind

12、ustries is assumed to be accomplished automatically by free competition, that is, to limit the price charged to the normal cost of production. In the case of authorized and regulated monopoly,ordinarily the reasonable rate of charge will correspond exactly to the economist's conception of normal

13、 price. The reasonable rate is ordinarily the one fixed by the normal cost of production.It is fixed by normal operating expenses plus a normal rate of return on a normal capital cost. Normal cost is ordinarily the determining factor in fixing fair, reasonable, or normal prices in the case of a regu

14、lated monopoly.There is no reason why in the case of a virtual monopoly the public should be required to pay more than the normal cost of production, and sound reason why in the long run the public cannot pay less. Normal cost of production is the amount which in the long run it is necessary to pay

15、to secure the utilities demanded by the public. It is the amount that will secure an equilibrium between demand and supply.In the case of a commodity requiring no capital outlay the normal cost of production is easily determined. It is the present normal cost of the labor and materials entering into

16、 its production. Cost consists merely of "operating expenses," and is not complicated by the question of capital cost, and interest and profits thereon.In the case, however, of a commodity requiring a large fixed investment, the determination of a normal cost of production is a complex pro

17、cess, in the working out of which there is room for a wide divergence of opinion. To the normal cost of labor and materials there must be added a fair estimate for depreciation and a fair return on capital cost. The normal cost of labor and materials is complicated by the necessity of including prov

18、ision for maintenance,repairs, and depreciation. The determination of a normal return on a normal capital cost requires a determination of two very difficult and complicated problems: (i) What is the amount of the normal capital cost, and (2) what constitutes a normal return on such amount.Normal ca

19、pital cost as applied to a new enterprise is a comparatively simple concept. But what is it as applied to a long established enterprise to a water supply plant, a gas plant, or a railroad system? Is it normal cost at the time originally installed or last renewed, or, on the other hand, is it the pre

20、sent cost of reproduction?Is it actual cost or reproduction cost? We start with the premise that the reasonable rate of charge is to be determined by the fair cost of production. The point at issue between actual cost and reproduction cost is really whether by cost of production we mean cost at a pa

21、rticular moment or cost averaged over a period of years. In favor of present-moment cost it is asserted that what the public is entitled to is service at a rate of charge sufficient only to pay a fair return, under present investment conditions, upon the capital cost that would be required at presen

22、t to furnish this service;and, conversely, what the company is entitled to receive is a fair return, under present investment conditions, on the capital cost that it or another company would have to expend at present in order to provide the service. A rate of charge measured on this basis is said to

23、' correspond to the present economic cost of the service.The determination of a normal capital cost is one step in the process of determining a normal price, and this normal price is the amount which in the long run it is necessary to pay to secure the utilities demanded by the public. It is the

24、 amount which constitutes an adequate inducement for investment. Starting with the necessary investment as a base, the investor will estimate all the risks and hazards of the business, of every kind and nature,and against this will place all the possible chances of profit. The possible rate of retur

25、n adequate to induce investment is naturally and necessarily a percentage on the actual cost. From the standpoint of the investor, a rate of profit based on any amount that is less than the actual cost is in excess of the actual rate of profit,and a rate of profit based on any amount that is greater

26、 than the actual cost is less than the actual rate of profit.The fair rate of return could be altered so as in a measure to offset the appreciation or depreciation of the base to which such rate of return is applied. With declining prices the risk of depreciation in reproduction cost would be offset

27、 by an increase in rate of return, and with advancing prices the probability of appreciation would be offset by a decrease in the rate of return. This, however, is but a poor method of accomplishing what can be more fairly and logically effected by directly basing the rate of return on actual capita

28、l cost. Any method that is permanently fair to both parties must get back to actual capital cost as the base for actual as distinct from nominal profits.The normal actual capital cost as a basis for rate determination,moreover, has a distinct advantage from the standpoint of public policy. It is des

29、irable that rate schedules should have stability and should not fluctuate with the price of iron pipe or copper wire or with real-estate activity or reactions. A utility is not established for the purpose of speculating in copper wire or iron pipe or land. It must, however, in furnishing its service

30、 invest its money permanently in these things. The utility should not be expected to assume the risks of fluctuations in the price of the land and materials it uses. The public interest is best subserved and the cost of production is lowered by reducing the risks incident to public utility enterpris

31、es. The tendency of modern public service regulation is to establish more definite and equitable relations between the public and the company. These more definite relations mean decreased risk, and decreased risk means decreased cost of production.The public utility renders a continuous service, and

32、 in doing so requires a permanent fixed capital. Both the plant and the business are a gradual growth. This essential continuity of growth and service is the fact that seems to be lost sight of in present-moment reproduction methods of determining cost of production. The service and its present cost

33、 are the result of a complex interplay of factors starting with the initiation of the enterprise. Such cost is as much the result of past life and growth as it is of present conditions.Investment, depreciation, operating costs, risk, are all bound up in the past growth and development of the existin

34、g utility.As Justifying the reproduction method it may be argued that the public is always entitled to secure service under present conditions as to cost of production. It is entitled to secure service at a rate of charge sufficient only to cover cost of operation,interest, and profits of a substitu

35、te plant of the most modem approved design, capable of performing the same service as the existing plant. The company assumes the risk and enjoys the profit,if any, incident to this arrangement. This method involves a reproduction of the service rather than a reproduction of the plant.If the old pla

36、nt were wiped out, what would it cost at present to construct and operate a plant capable of performing the service now performed by the old plant? In the case of a water plant, perhaps an entirely new source of supply would be used and the distribution system radically changed; in the case of a gas

37、 plant,a different process of production employed and a few gas-holders substituted for many small ones; in the case of an electric plant,larger units of production employed; in the case of a railroad, there might be a radical relocation and realignment of roadbed and important changes in the method

38、 of construction, leading to great economies in operating cost. It has been stated that ''if our railways were to be built anew, in the light of our present knowledge and with our present traffic offerings and financial resources, vast changes would be made in the character of construction.&

39、quot;As thus stated, the reproduction method has so many difficulties that it is practically never employed. The reproduction of the service involves not only the determination of the cost of the most efficient substitute plant, but the determination of the present cost of reproducing the business,

40、the proper allowance under present conditions for interest and profit, and the operating costs for the substitute plant. In most cases it is exceedingly difficult and expensive to determine the design of an equally efficient substitute plant. In the case of a railroad, for example, the cost of deter

41、mining a substitute location and of estimating the operating costs thereon would be so great as to render it entirely impractical as a factor in rate regulation. It would require a careful survey of various available locations, and estimates of construction and operating costs. The engineering costs

42、 of such survey and estimates would be enormous.The cost of reproduction in practice, therefore, instead of meaning the cost of a substitute plant of the most modern approved design, capable of performing the same service as the existing plant, has come to mean the cost of a substantially identical

43、reproduction of the existing plant. This is the usual method. It involves, however,a partial abandonment of the reproduction of the service theory, and a somewhat imperfect recognition of the fact that cost of production is necessarily related to the past as well as to the present and future. It con

44、stitutes an imperfect recognition of the necessary continuity in the life of the plant and its service.By a further modification of the cost of reproduction method,cost of reproduction is made to mean not the cost at present prices of land, labor, and materials of reproducing a substantially identic

45、al plant under present conditions, but the cost at present prices of land, labor, and materials of reproducing a substantially identical plant under the actual conditions under which the existing plant was originally constructed. Under this method expenditures actually incurred in the development of

46、 the present property are fully allowed for, even though they would not be met with in the reproduction of an identical substitute plant. On the other hand, certain expenditures that have not been incurred in the development of the existing property, but would be incurred in the reproduction of the

47、existing property, are excluded. The following is a statement of expenditures that would be included under this interpretation of the reproduction method. "If trees were cleared, then he the appraiser must allow for the cost of clearing, although not a tree may now be standing. If streets were

48、graded, then that grading must be estimated, though to-day the entire city is as level as a floor. If quicksand was encountered in laying a pipe-line, then the added cost of excavating it must be allowed, even though subsequent works have drained the line so that it no longer has a yard of quicksand

49、. If money was spent to educate the public to the use of the commodity sold by the corporation, then that money is a development expense which must be allowed, even though the expense would not now be incurred by a new corporation of like character." Pavement over mains laid at the expense of t

50、he city, on the other hand, is an example of a reproduction cost that would not be included under the modified rule above mentioned.The consideration under the reproduction method of piecemeal construction depends upon whether the modified view of cost of reproduction above referred to is adopted. U

51、nder a strict application of the reproduction method there would be no occasion for the application of piecemeal methods. The entire property would be reconstructed by the quickest and most economical method. The actual cost of constructing gas mains has doubtless increased where from time to time a

52、dditional mains have been laid in the same street to meet increased demands. In the laying of telephone conduits and cables by the piecemeal method additional cost is also incurred. On the other hand, certain overhead charges, such as organization, engineering, and interest during construction,may b

53、e lower where the property is constructed by the piecemeal process. Various authorities in using the reproduction method have considered it proper to allow for piecemeal construction.To this extent they have abandoned the strict reproduction method.A strict application of the reproduction method mea

54、ns that interest and profits shall be determined by present conditions. If the existing property were wiped out, upon what terms could capital be induced to invest in a similar property under existing conditions as to interest and risk? This theory disregards entirely the risk assumed when the exist

55、ing enterprise was started and when the successive additions to investment were made. Most authorities recognize, however, that a fair return on investment cannot be determined in this way. Consideration must necessarily be given to initial risks and past earnings.The reproduction method does not fi

56、t in with depreciation and accounting methods. The annual allowance for depreciation under approved accounting methods is not the amount required to replace the existing unit, but the amount required to write off the cost of the existing unit when it is necessary to replace it. Under approved method

57、s the actual cost of a car when replaced is deducted from the capital account, and the cost of the new car is added to the capital account. An allowance for depreciation estimated on reproduction cost is consequently inaccurate in proportion as the reproduction cost differs from the actual cost. As

58、long as the science of accounts is predicated on actual cost it is inconsistent and confusing in any proceeding to determine cost of production, to base either the accrued depredation or the annual allowance for depreciation, on reproduction rather than actual cost.The question of actual cost has be

59、en usually dismissed in connection with valuation cases and discussions by the simple statement that inasmuch as its determination was entirely impracticable any consideration of the subject must be purely academic. This,it seems, has been largely the result of a somewhat confused conception of actu

60、al cost. Actual cost properly considered may in a great majority of cases be determined with much greater accuracy than reproduction cost. The term "actual cost" may possibly be taken in three senses: (i) book cost; (2) the first cost of the original units; (3) the first cost of the identica