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undepreciated capital base. We have already pointed out in connection with our discussion of Joint Facility Rents that in straight line depreciation the depreciation rate must be applied annually to the full amount of the capital to be de­preciated, otherwise, the capital will never be depreciated in an infinite period of time. The Commission determined that a 6$ return on the depreciated rate base fixed by it for the Water Company was $37,135.18 and that the amount of additional revenue required to provide this return after federal income tax was $25,112.46, or a'total revenue before income taxes of $48,570.74. Even assuming that all of the basic figures used by the Commission to determine the deficiencies in revenue are correct, the mathematical computation made by the Commission understates the additional revenue required by $11,118.26. In other words, if wo use the Commission's operating revenue and operating expense figures shown on page 21 of the opinion, we find that the total revenue required to return $37,135.18 to the Water Company after payment of federal income taxes is $59,689.00 instead of $48,570.74. (Schedule IV, pg. 1) This computation is made by using a tax rate of 25$ on normal corporate not in­come and a tax rate of 22$ upon surtax net income above $25,000. These wore the corporate income tax rates which were in effect during the year 1951. The computation made by us does not re­flect the higher corporate income tax rates which will undoubt­edly be in effect during the year 1952 and which may be in - 6 6 -