(_d_) _Depreciation._—Thus far, this discussion has not dealt at length with the subject of depreciation, and it is not considered essential to the purposes of this paper that it be done. The State appraisals have raised a question as to the propriety of using mortality or life tables as compared with personal inspection and the placing of a percentage based on individual judgment. Either method is subject to error. It is certainly desirable to secure the opinion of the man who inspects a bridge, or building, or locomotive, as to its physical condition. It may be desirable to use the check secured by the fact that the age of the building is known and also the average life of structures of its class. The result of the Michigan inspection of rolling stock was to sustain fully the rules for valuation issued by the Master Car Builders Association; and clearly, it is not only proper, but extremely desirable, to apply tables to such equipment as freight cars, which are scattered all over the United States, for it would be absolutely impossible to inspect completely those of any road or system. On the other hand, the life of steel rails cannot be determined by any simple table, because the number of car movements, the weight of motive power, the speed of trains, the location (on curves or on heavy grades), and many other conditions affect their life. This also pertains to buildings, locomotives, and other equipment. The character of service rendered, the nature and extent of repairs, and the way in which they have been maintained, add to or take away from any life assigned by tables, so as to render them valueless in many individual instances. In placing depreciation, allowance should be made, not only for wear and tear due to use, and decay due to the elements, but also to cover that which is due to obsolescence, or the fact that the facility is of an antiquated or inefficient type, and has been superseded in general use by more efficient and economical devices; this may be called commercial depreciation, as distinguished from physical depreciation. The method to be used in placing depreciation is clearly one of the important things that must be determined by each set of appraisers, and, while the writer believes that the use of expectancy tables would greatly facilitate the work in many cases, the data on which to found a complete set of tables and to support them and justify their use are often lacking; therefore, any use of tables should be safeguarded in every possible manner, and personal inspection of fixed property should always be made. (_e_) _Immaterial Elements of Physical Property._—There are certain expenses, inseparable from the construction of any public works, which are a necessary and proper part of the cost, and are arranged for in the original financing, but are not capable of identification after the completion of construction work. These expenses are: (1) Organization, (2) Legal expenses, (3) Engineering,