Valuation of Coal Properties

THIS paper treats primarily of the valuation of developed coal properties by the method of capitalizing their estimated average future earnings. However, in it reference is also made to valuations of undeveloped coal lands and to various methods of appraisal other than by future earnings. FUNDAMENTAL VALUATION PRINCIPLES Before discussing in detail coal property valuations, a few statements bearing on the general subject will be made to present certain of the writer's views on the question as a whole. 1. A certain property at a given time has but, one true value. This is not universally admitted. The appraiser rather frequently finds that a coal owner has in mind three valuations for his holdings; one, the figure at which he feels they should be appraised for taxation purposes; another, the much higher one that should be used if a loan is to he negotiated on the property; and a third, intermediate between the other two, the price for which he would be willing to dispose of his holdings were they for sale. The last is usually nearest to the true value, and because this is so the statement is generally accepted that the fair value of such a property is the price arrived at by negotiation between a willing seller and a willing buyer who are otherwise disinterested. 2. Notwithstanding the foregoing, it is only very generally and approximately true that the proper measure of the value of a given developed1 coal acreage is the unit or per-acre price for which one or more bodies of similar coal in the salve district have been sold recently. To give a few reasons why such a measure of value can not be strictly applied, it may be noted: