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% It is my thought that in order to complete accounting for this work order, the accounting should be handled as indicated above, so that on the sale date ownership of this material would be transferred to the Water District at its ledger value, which in this case would be the salvage value indicated above. Agreement "CL.D. 113^2 as contained in the last paragraph of Section 3 on page 13, which states* in part, “Property to be sold to the District hereunder shall not include any portion of the salvaged material . . . . . . retired by First Parties prior to the sale date11, and provisions in paragraph (b) under Section 10, page 26, which reads In part, “There shall be deducted from the basic purchase price to be paid by the District upon the sale date the cost less depreciation aocrued thereon as of September 1, 1952 on any property mentioned in sub-paragraphs (b), (d), (e), (f) and (g) of Section 1 which was retired subsequent to September 1, 1952 and prior to the sale date." with the District, I understand that the sole purpose of this paragraph was that we would not give the salvage material recovered from retire­ments to the District since under Section 10 (b) of the Contract we are allowing them, in the case of normal retirements, a deduction of the undepreciated ledger value of property retired. In the case at hand we are allowing the District a credit for the current cost of facilities retired on a betterment basis, and I am unable to find where the agreement provides for any special handling of credits to be allowed the District under betterment accounting. Would appreciate Mr. Bennett's comment. Above procedure is recommended on the basis of provisions of With regard to the last paragraph of Section 3 of Contract LRMllm