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M r . B e n n e t t 2 , J a n u a r y 2 0 , 1 9 5 0 4* An estimate of net available for return and rate of return. m 1&e development of a set of proposed flat rates to yield the revenues required. Fixed Capital and Hate Base These elements can be set up on both a historical and. re­production cost basis* if that be desired. From my discussion and limited review it appears there may be some difference in viewpoint within your organization on this subject. Likewise, while your records may be in good shape, yet replacements of property upon retirement have been predicated on "betterment accounting" as such term is used by the Interstate Commerce Commission. Such practice normally results in under­statement of the actual historical cost that would obtain under a different accounting procedure. Fixed capital and rate base figures predicated upon re­production cost estimates are given little or no consideration be­fore courts and commissions at the present time for rate making purposes* The California Commission entirely ignores such cost estimates. It is possible that the Nevada Commission might look upon the matter differently, However, there Is no reason why the higher present day cost figures ly since the properties may be soslhdo uladt nsootme bef utpurrees endatteed,— eUsnpdeecrial­the latter situation, the Company is entitled to the then present fair market value of the properties to be sold. While the Company might urge with considerable merit that some combination of'the book and reproduction cost new figures might be taken as a reasonable basis for testing the rate of re­turn, it is my own view that consideration be given to adjusting the book figures to reflect the estimated historical cost of the properties. However, time of preparation is an element to be cseolnfs.idered— especially for the preparation of the application it­