It is obvious from the foregoing statement of facts that the chief question for review is the validity of the valuation of $335,000 placed upon the property of plaintiff as the basis for the May 1922 rates. If that valuation stands the test of the federal rule the judgment must be affirmed; if it does not it must be reversed.
It appears from the Commission’s decision that it arrived at its valuation by taking that made in 1912 and adding thereto the costs of additions since made, by increasing the land value, and by adding cost of materials and supplies on hand plus working capital. See 13 Wis. R. R. Comm. Rep. 100; 22 Wis. R. R. Comm. Rep. 672; and 181 Wis. 281, 303, 194 N. W. 846. Some contention is made as to the amount of going value and working capital, but as the case turns on the proper basis of valuation of tangible property *568we do not reach these contentions. The valuation of the Commission does not substantially reflect the increase in the value of any of plaintiff’s property except its land. Original cost, reaching back over a period of more than ten years, plus cost of additions since made, is the main basis used for valuing plaintiff’s tangible property, except the land. This is not in accordance with the federal rule. In McCardle v. Indianapolis Water Co. (U. S.) 47 Sup. Ct. 144, the court says:
“It is well established that values of utility properties fluctuate, and that owners must bear the decline and are entitled to the increase. The decision of this court in Smyth v. Ames, 169 U. S. 466, 547, 18 Sup. Ct. 418, declares that to ascertain value ‘the present as. compared with the original cost of construction’ are, among other things, matters for consideration. But this does not mean that the original cost or the present cost, or some figure arbitrarily chosen between these two, is to be taken as the measure. The weight to be given to such cost -figures and other items or classes of evidence is to be determined in the light of the facts of the case in hand. By far the greater part of the company’s land and plant was acquired and constructed long before the war. The present value of the land is much greater than its cost; and the present cost of construction of those parts of the plant is much more than their reasonable original cost. In fact, prices and values have so changed that the amount paid for land in the early years of the enterprise and the cost of plant elements constructed prior to the great rise of prices due to the war do not constitute any real indication of their value at the present time. Standard Oil Co. v. Southern Pac. Co. 268 U. S. 146, 157, 45 Sup. Ct. 465; Georgia R. & P. Co. v. Railroad Comm. 262 U. S. 625, 630, 631, 43 Sup. Ct. 680; Bluefield W. W. & Imp. Co. v. Public Service Comm. 262 U. S. 679, 691, 692, 43 Sup. Ct. 675; State ex rel. Southwestern Bell Tel. Co. v. Public Service Comm. 262 U. S. 276, 287, 43 Sup. Ct. 544.”
In the McCardle Case a valuation made substantially like that of the Commission in the present case was set aside by *569the court because, in view of the great advance in prices during and after the war, it did not correctly reflect the actual value of the property as of the time the valuation is made, which is the date of the order fixing the rate and the probable value for some years to come. A valuation which does not as to the tangible property substantially reflect the then cost of reproduction less depreciation does not meet the requirements. The utility is entitled to the present fair value of its property as a basis for rate-making. Hence, where there has been a period of rising prices for many years, original cost plus cost of additions do not correctly measure the present value. Such a method may form the main basis of a valuation during a period of fairly stable prices, but it does not as applied to prices from 1912 and earlier down to 1922. Since the basic result to be reached is the present and near future fair value of the property, any method that will accomplish that result is a proper method. It is doubtful if any method will accomplish such result unless it substantially reflects or agrees with present or recent reproduction cost less depreciation. The method employed by the Commission in the instant case does not do so, and under the federal rule referred to must be set aside as confiscatory and unreasonable. Expressions to the contrary in Waukesha G. & E. Co. v. Railroad Comm. 181 Wis. 281, 194 N. W. 846, are modified to conform to the rule announced in McCardle v. Indianapolis Water Co. (U. S.) 47 Sup. Ct. 144.
By the Court. — Judgment reversed, and the order of the Commission of May 2, 1922, is vacated and set aside as unreasonable and confiscatory.
Stevens, J.,- took no part.