"_Third._—The difficulties arising from the absence of exact information as to the receipts and expenditures on the several parts of a single line covered by franchises of different length and character." The Commission, having arrived at such an adjustment of the difficulties as appeared just, determined the value of franchises in the following manner: It was assumed that the gross earnings on the different parts or routes of each system were in proportion to the car-mileage. The system was divided into routes, and the car-mileage was determined for each route; then this information was compiled so as to show the car-mileage, and consequently the gross earnings, apportionable to each franchise. The next step was to determine, in the same manner, the proportion of operating expenses assignable to each franchise, the operating expense being assumed to be uniform with gross earnings. A study of the conditions in Chicago resulted in a determination upon 70% as a fair proportion for operating expenses, taxes, and maintenance. Next, the amount of capital investment to be supported out of earnings was computed by estimating the cost of reproduction of track and overhead lines under each franchise and apportioning the cost of land, power-houses, barns, cars, tools, and stores in proportion to car-mileage. In determining earnings for the unexpired years of franchise life, it was assumed that the earnings would increase in accordance with the law laid down by Mr. Arnold in 1902. The last step was to find the value of the net earnings of future years, after deducting the sum required to support the invested capital. The rate chosen was 5% compound interest. The sum of the different present values thus found was the value of the franchise sought. Two other points arising in connection with franchise values were: "Where, on a street, franchises covering part of the street have expired, and others remain in force, the contention of the city is that the expired franchise is valueless because traffic under it can be stopped; that of the company is that it still has value, as traffic can be routed over other streets where franchises have not expired." This was set aside on the ground that the value of any particular portion of a street, or of a franchise, remains the same as long as the system is considered as an entirety. The second point was as to the value of traffic agreements; but this complicated problem was also dismissed on the theory that when two systems are considered as co-operating, the value of individual parts of either system remains the same regardless of their ownership. The values of their properties, fixed by the companies, included paving. The total figures reached in this valuation were: Companies' valuation, including paving, $73,555,675 Commission's " " " 50,994,782 Commission's " excluding " 46,652,747