out of the taking over of the roads by the Government during the war, will be in the neighborhood of 1.9 billion dollars. These claims, however, contain a considerable number of items, of which depreciation or under-maintenance is only one.
“The roads from sale of capital securities, surplus earnings and other resources, added to their capital account 1916-20 property costing two billion dollars.
“There is further the matter of addition and betterments undertaken by the Government during its control, about $300,000,000 having been put into equipment and now covered by equipment trust obligations of the carriers interested, and about $500,000,000 in other additions and betterments, the funding of which is now under consideration by the administration.
10. “In the matter of depreciation it should be borne in mind that as to about one-half the railroad property, lands, grading, etc., the question does not arise. As to much of the other property, the annual replacements tend to fall into a rhythm and eliminate depreciation; that is, if the average life of a cross-tie is 10 years and one-tenth of the ties are replaced annually and the cost charged to expenses, there is no room for depreciation. If the idea of depreciation is to be given status, then an involved bookkeeping would have to be devised by which the value of one-tenth of the ties would be charged to depreciation annually and then depreciation written off annually by the amount of money advanced to replace them. There was, however, during the period of Federal control a distinct falling off in the maintenance of the properties and in the replacement of parts wearing out due to four causes:
A. The absorption for war purposes of large amounts
