dissenting in part:
I join the court’s opinion except for the “Donated Property Depreciation Issue” and the “Protective Work Issue”, on both of which I would hold for the Government.
*316Donated Property Depreciation: The decisive question, slighted in the court’s opinion, is the purpose of the “donors” with respect to the particular properties. Detroit Edison Co. v. Commissioner, 319 U.S. 98 (1943), went the way it did because the Court thought that “the farmers and other customers who furnished these funds” could not have intended to confer a gratuitous benefit on the utility through contributing to its capital; to those “donors” the payments were simply part of the price of the service. 319 U.S. at 102-03. Brown Shoe Co. v. Commissioner, 339 U.S. 583 (1950), was decided the other way because “the contributions to petitioner [the shoe company] were provided by citizens of the respective communities who neither sought nor could have anticipated any direct service or recompense whatever, their only expectation being that such contributions might prove advantageous to the community at large.” 339 U.S. at 591. In other words, those “community groups” desired to, and did, grant gratuitous benefits to that taxpayer in the form of contributions to its capital. The properties in both decisions were exhaustible assets used in the taxpayer’s business as part of its capital, giving some economic benefit to the company, and were of the type normally subject to depreciation; in both cases, too, assets were given, not money which could have been used for non-capital ends. These common factors did not differentiate the cases. What made the difference were the quite distinct purposes and attitudes of the two sets of “donors”. Plaintiff insists that Brown Shoe limited the Detroit Edison rule to contributions made directly to obtain goods, services, or privileges, but, as I see it, the later opinion did not give carte blanche to other properties given without donative intent; the emphasis was, rather, on whether the giver had “a definite purpose to enlarge the working capital of the company.” 339 U.S. at 591.
In this instance, it is evident to me that Congress, which funded all or the lion’s share of the “donations” as part of the federal highway program, did not have in mind awarding any substantial gratuities to the railroads or increasing their capital. The intended beneficiaries of the program, ultimate and immediate, were the people at large, the auto-travelling segment of the public, and the trucking industry. *317See the extensive discussion of Mr. Justice Brandeis in Nashville, Chattanooga & St. Louis Ry. v. Walters, 294 U.S. 405, 416 ff. (1935). The benefits to the railroads were small, indirect, and merely incidental — not, as in Brown Shoe, large, direct, intended, and immediate. The highway program was certainly not undertaken in order to give free aid to the railroads. What they may have gained was no more than a minor by-product of the overriding aim of Congress (and the states) to reach very different goals. The physical assets left with the railroads were not central to their business, as in Brown Shoe and Commissioner v. McKay Products Corp., 178 F. 2d 639, 643 (C.A. 3, 1949), but were peripheral and tangential. That the railroads were to receive these items was not the prime and significant purpose of the Federal Government or the states, but a casual consequence, as it were, of the highway program which had other ends.
The lack of any desire to give free capital to the railroads is spelled out, almost in terms, in the Federal-Aid Highway Act of 1944,58 Stat. 838,841, § 5 (b) ,1 which made participat*318ing railways “liable to the United States for a sum bearing the same ratio to the net benefit received by such railway from such project that the Federal funds expended on such project bear to the total cost of said project,” and provided a mechanism for determining and collecting such liability. “In no case”, moreover, were the total net benefits to the railroad to be more than 10% of the cost of the project. Neither in this legislation nor in any other facet of the program do I find any significant purpose to make a free contribution to the railroads’ capital.2
The court leans heavily on an assumed obligation on plaintiff’s part to replace the facilities at its own expense. The defendant points out that only 42 of the 173 agreements embody such an obligation expressly; the rest are silent on the point and it may well be that there is no such responsibility. Even on the court’s assumption, there are two comments to be made. Depreciation reflects the cost of an existing capital asset, not the cost of a potential replacement. Weiss v. Wiener, 279 U.S. 333 (1929); Helvering v. Lazarus & Co., 808 U.S. 252, 254 (1939). And even if plaintiff did have the replacement obligation the court finds, that would not outbalance the clear evidence that the Federal Government did not have, in the phrasing of Brown Shoe, “a definite purpose to enlarge the working capital of the company” by a free gift.
This lack of any real purpose to do here what the “community groups” did in Brown Shoe disposes of the “donated property” issue, in my opinion, and I need not elaborate my views on the defendant’s alternative defense based on Mimeo 58 and the terms letter. On this point, too, I disagree with the court. Mimeo 58, which explicitly excludes donated property from straight-line depreciation, is entwined with the terms letter and forms an integral part of the mutual understanding for the change-over from retirement accounting. See Chicago, Milwaukee, St. Paul & Pacific R.R. v. United States, 186 Ct. Cl. 250, 266-272, 287-94, 404 F. 2d 960, 969-72 (1968). One of those accepted conditions was the exclusion of donated *319property. There was no change in the law “applicable to railroads in general” after plaintiff agreed to this condition. Brown Shoe did not initiate any such change; it applied the same general principle as Detroit Edison, but to a quite different factual situation.
Protective WorJc: Although the nature of the accounts in which plaintiff placed its protective work projects is not automatically binding for tax purposes, the character of those accounts does bear directly on the plaintiff’s own view and treatment of the projects — and the plaintiff’s own treatment is significant because, as the court says, “whether expenditures are currently deductible or must be capitalized depends on the purpose for which the expenditures are made.” Here, plaintiff put the projects in capital accounts — separate from the assets (e.g. embankments) which they are now said to have repaired — thus suggesting that, in plaintiff’s view, the purpose of the expenditures was not simply repair of the embankment (for example), but, rather, establishment of a new and independent capital asset with a depreciable life of its own. Again, when plaintiff sought in the 1940’s to change from the retirement system, the list of properties it furnished the Government as subject to depreciation covered the particular items now involved (this listing has special meaning because it obviously was for tax purposes).3 Such continued treatment by plaintiff of the specific projects with which we are concerned in this issue, taken together with the pertinent information in the findings and record on the physical characteristics of the structures (e.g. retaining wall, culvert, steel pilings), persuade me that taxpayer’s purpose in making the expenditures was not repair or maintenance of an existing structure but the creation of a new and independent structure. As the varying decisions in this crowded field indicate, there is no mechanical or physical test for deciding whether a piece of work is a repair of a larger asset or the addition of a smaller structure which is distinctively new and separate. That is why the taxpayer’s own treatment seems to me so important as a prime guide through the tangle. I see no *320adequate reason for saying now that plaintiff’s own historical attitude toward these expenditures was ill-conceived or incorrect.
Similarly, Kansas City Southern Ry. v. United States, 125 Ct. Cl. 287, 112 F. Supp. 164 (1953), looks quite different through my legal lenses. The physical nature of the work there, pole driving, was not comparable. In addition, that item was not included by the railroad in its depreciable properties for change-over from retirement accounting. The I.C.C. had itself acknowledged that the property should not have been included in a capital account, and this court recognized that reversal-of-position as showing that the original characterization as capital was wrong. 125 Ct. Cl. at 290, 293, 112 F. Supp. at 166. Thus, there was no such uniformity of treatment as there is here. On the contrary, when Kansas Oity was decided, the weightier view was that the item was expansible and not capital; and the taxpayer had not undertaken, as plaintiff did with respect to the items here (in its acceptance of the terms letter arrangement) to consider the property as capital and depreciable for tax purposes.
Laeamore, Judge, joins the foregoing dissenting opinion on the “Protective Work Issue” but otherwise concurs in the Pee Curiam opinion of the court. Dueeee, Judge, joins in the foregoing dissenting opinion on the “Donated Property Depreciation Issue” but otherwise concurs in the Per Curiam opinion of the court. Nichols, Judge, joins in the foregoing dissent with respect to the “Donated Property Depreciation Issue” and the “Protective Work Issue.”“Any railway involved in any project for the elimination of hazards of railway-highway crossings paid for in whole or in part from funds made available under this Act. shall be liable to the united States for a sum bearing the same ratio to the net benefit received by such railway from such project that the Federal funds expended on such project bear to the total cost of such project. For the purposes of this subsection, the net benefit received by a railway from any such project shall be deemed to be the amount by which the reasonable value of the total benefits received by It from such project exceeds the amount paid by it (including the reasonable value of any property rights contributed by It) toward the cost of such project; and in no case shall the total benefits to any railway or railways be deemed to have a reasonable value in excess of 10 per centum of the cost of any such project. The liability of any railway to the United States with respect to any such project may be discharged by paying to the United States, within six months after the completion of such project, such amount as the Commissioner of Public Eoads determines to be the amount of such liability. Any such determination of the Commissioner shall be made on the basis of recommendations made to him by the State highway department and on the basis of such other information and investigation, if any, as the Commissioner deems necessary or proper. If any such railway has failed so to discharge its liability to the United States with respect to any project within six months after the completion thereof, the Commissioner of Public Roads shall reguest the Attorney General to institute proceedings against such railroad for the recovery of the amount for which it is liable under this subsection. The Attorney General is authorized to bring such proceedings on behalf of the United States in the appropriate district court of the United States, and the United States shall be entitled in such proceedings to recover such sums as it is considered and adjudged by the court that such railway is liable for in the premises. Any amounts paid to or recovered by the United States under this subsection shall be covered into the Treasury as miscellaneous receipts.”
The agreement for construction of new highway underpasses gave the governmental bodies the right to construct without paying to plaintiff any other compensation for an easement. Such underpasses account for almost three-quarters of the amount involved in this case with respect to the “donated property" issue.
As already mentioned In my discussion of “Donated Property Depreciation", supra, I do not agree with the court as to the effect of Mimeo 58 and the terms letter, or of the railroads’ rights under that arrangement.