Prices were furnished by the leading manufacturers, and in many cases were secured from the books of the railroad company. In order to determine the condition of the equipment, the inspectors of the department personally examined 32,000 freight cars in Michigan and adjoining States. Their reports were separated, classified, and analyzed by groups, with the result that the inspection fully confirmed and justified the use of the rule for depreciation of the Master Car Builders Association, which was therefore applied. In the 1902 appraisal this rule was accepted without any inspection or further study of the problem. The criticism of this part of the work by the appraiser of the State of Washington is wholly unjustified, as the work was necessary in order to qualify in Court and defend the rule adopted, and the actual cost of the work was small. _Locomotives._—The inventory of locomotive equipment was secured from the companies, and checked against reports and the equipment register. Personal inspection was made of every locomotive in the State, then a complete description was prepared, and the percentage of depreciation assigned. Curves of depreciation had been computed and plotted, and the figures of the inspectors were compared carefully with the curve in order to eliminate possible errors. _Vessels._—Professor Sadler's appraisal of vessels involved a personal examination of every vessel. This survey included: (_a_) The hull of the vessel and general equipment; (_b_) The machinery and boilers. An independent estimate of the cost of reproduction and depreciation was made, and, wherever possible, this was checked by comparison with the detailed original cost. In case of material difference, various shipbuilders were consulted, and independent estimates of cost were secured. In every case these latter estimates were confirmatory of the estimated cost of reproduction, which figures were used throughout the appraisal. Overhead Charges. There are certain expenses connected inseparably with the construction of any public work, which, on the completion of that work, are not capable of physical identification, but which, nevertheless, belong to and must be a part of the cost of the physical property. These expenses are legitimate; and, as long as the property is operated, a very large part, if not all, of the entire expense remains in the present value of the property as a "going concern." Appraiser Cooley and his staff took up the discussion of these items and disposed of those which were carried into the valuation by the placing of a percentage. These items are: _Engineering._—This covered all the cost of preliminary and location surveys, design, and supervision of construction of the work, and all expenses connected therewith. This was covered by a charge of 4% of the cost of reproducing the permanent way and structure, but not the equipment.