duction cost factor, there
developed momentarily the prospect that prudent investment might be
substituted. This possibility was quickly negatived, however, by the
Hope Gas Case (320 U.S. 591 (1944)) which dispensed with the necessity
of relying upon any formula for the purpose of fixing valid rates.

(4) Depreciation.--No less indispensable to the determination of the
fair value mentioned in Smyth _v._ Ames was the amount of depreciation
to be allowed as a deduction from the measure of cost employed, whether
the latter be actual cost, reproduction cost, or any other form of cost
determination. Although not mentioned in Smyth _v._ Ames, the Court gave
this item consideration in Knoxville _v._ Knoxville Water Co., 212 U.S.
1, 9-10 (1909); but notwithstanding its early recognition as an
allowable item of deduction in determining value, depreciation continued
to be the subject of controversy arising out of the difficulty of
ascertaining it and of computing annual allowances to cover the same.
Indicative of such controversy has been the disagreement as to whether
annual allowances granted shall be in such amount as will permit the
replacement of equipment at current costs; i.e., present value, or at
original cost. In the Hope Gas Case, 320 U.S. 591, 606 (1944), the Court
reversed United R. & Electric Co. _v._ West, 280 U.S. 234, 253-254
(1930), insofar as the latter holding rejected original cost as the
basis of annual depreciation allowances.

(5) Going Concern Value and Good Will.--Whether or not intangibles were
to be included in valuation was not passed upon in Smyth _v._ Ames; but
shortly thereafter, in Des Moines Gas Co. _v._ Des Moines, 238 U.S. 153,
165 (1915), the Court declared it to be self-evident "that there is an
element of value in an assembled and established plant, doing business
and earning money, over one not thus advanced, * * * [and that] this
element of value is a property right, and should be considered in
determining the value of the property, upon which the owner has a right
to make a fair return * * *." Generally described as going concern
value, this element has never been precisely defined by the Court, and
the latter has accordingly been plagued by the difficulty of determining
its worth. In its latest pronouncement on the subject, uttered in Power
Comm'n. _v._ Nat. Gas Pipeline Co., 315 U.S. 575, 589 (1942), the Court
denied that there is any "constitutional requirement that going concern
valu