When considering the wisdom of placing on the books any values of real estate other than the cost price, it must be remembered that, while real estate is among the most stable of assets inasmuch as it seldom entirely disappears, it is peculiarly sensitive to fluctuations in its selling value. Its very immobility is one cause of this, for neighboring improvements or changes which are beyond the control of its owner may cause its value to vary considerably.

Again, real estate is not a necessity of life in the same sense as food products or clothing, and the real estate market is one of the first to suffer in times of depression or panic, fluctuating to a degree equalled only by those articles which are obvious luxuries. Such times of panic are the very occasions when it may be necessary to realize on assets, and this realization will undoubtedly puncture any inflation which may exist.