The  continuous  peak  load  in  production  is  just  as  essential
in  gas  production  as  in  electric  lighting  companies  if  the  most
efficient  utilization  of  the  plant  is  to  be  secured.  On  the  other
hand,  when  large  expansions  are  to  be  made,  the  same  elastic
adaptation  cannot  always  be  made  to  the  immediate  as  well  as
future  requirements  of  gas  companies  as  easily  as  with  electric
lighting  companies.  Greater  costs  in  gas  equipment  are  necessi-
tated by  the  more  permanent  and  larger  anticipation  of  future
expansion,  so  that  the  immediate  rate  may  not  only  be  cut  in
proportion  to  capital  expenditures  but  the  attaining  of  "ex-
pected returns"  on  the  new  expenditures  is  slower.  This  condi-
tion makes  it  the  more  difficult  to  estimate  the  limitations  on
expansions  in  order  not  to  go  beyond  the  saturation  point.  A
decreasing  growth  in  the  volume  of  business  must  not  necessarily


402  INVESTMENT  ANALYSIS

be  viewed  with  alarm  any  more  with,  gas  companies  than  with
electric  light  companies,  though  it  must  be  considered  in  ana-
lyzing capital  expenditures.1

Depreciation. — Of  most  immediate  interest  in  the  deprecia-
tion and  maintenance  of  gas  plants,  as  with  other  public  utili-
ties, is  the  relation  of  these  factors  to  rates.  The  testimony  of
experts  and  the  judicial  decisions  are  somewhat  in  conflict.
