Coal - Appraisal of Coal-property Values (with Discussion)

The present value of most coal properties resides largely in the cod remaining to be mined, which thus constitutes the most important asset. The object of this paper is to discuss methods commonly used in computing the value of minable coal. To distinguish clearly between such coal values and the values of other property, the several kinds of property values should be divided into classes; so as to avoid the unintentional omission of items of importance. Value op Coal Reserves Judicial decisions prescribe, and appraisers commonly accept, current sales value as the preferred means for determining the value of transferable property. With few exceptions a property is worth the sum that can be realized from its sale by a willing seller to a willing buyer, a sale in which compulsion urges neither party, and between whom there is no community of interest to fix a value; or it is worth at least as much as a responsible buyer will offer for it. Actual sales of like property or bids from responsible buyers for the property, or for substantially like property, are the best established methods for determining values. Only in the absence of such sales or bids can valuations by other methods be entertained, and only for reasons of weight can sales values be set aside. Valuation Based on Royalties Sales of coal in the ground, as customarily carried out through lease under royalty agreements, are therefore the most trustworthy means available for determining the value of coal reserves. The constantly rising value of high-grade coal in the United States can most readily be shown by the increasing royalties per ton that can be obtained for such coals under leasehold. The rising value of land containing such coal can also, of course, be proven by the price at which such properties are actually sold as compared with prices obtainable for lands containing coal of the same grade in the past. It is exceedingly difficult, however, to establish values by the prices paid for coal