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HI August, 1944, to December 31, 1947, amounted to $36,144.18. Property retired during the same period totalled $19,626.16. Depreciation taken, included in total operating expenses, was as follows: $l,699-.60 in 1944; $3,412.27 in 1945; $3,672.06 in 1946; and $3,610.60 in 1947. According to respondent’s computations, the rate of return on investment was 6.44% in 1944; 6.86% in 1945; 3.45% in 1946 and 6.81% in 1947. In computing the net rate base, the company has deducted from the retirement reserve account the sums of $7,120.84 for the year 1945; $6,914.78 in 1946; and $4,418.31 for the year 1947 as book value of fixed capital withdrawn, The only amounts credited to the depreciation or retirement reserve account for depreciation on all of the property, (property which is kept in service, as well as property to be retired, or is being retired), were $1,699.60 in 1944; $3,412.27 in 1945; and $3,672.06 in 1946. In Exhibit "F”',' respondent shows the sum of $32,001.49 as being the credit to the retirement reserve account on December 31, 1947. This total is arrived at by adding to the credit balance of $30,131.69 on December 31, 1946, (Exhibit "F"), the depreciation taken for the year 1947, (Exhibit "0"), plus a credit transfer of $1,195.74 as net salvage and removal, (taken from annual report filed with the Commission), then deducting the sum of $4,418.31 as book value of fixed capital withdrawn during the year. According to the figures submitted in Exhibit "I", the gross retirements of property of the water department during the year 1947 totalled $2,392.07, and not $4,418.31 as claimed. The Commission has disallowed the sums of $7,120.84 and $6,914.78 debited to the retirement reserve account for the years 1945 and 1946 and has reduced the 1947 debit from $4,418.31 to $2,792.0, for the same reason as noted previously in this opinion, i,e,,no amount can be charged to the retirement reserve account for book value on plant property withdrawn during the year on which very little depreciation, if any, had previously been set up on the company’s books and credited to the retirement reserve account. The rate of return, as corrected, is 6.44% in 1944; 9.30% in 1945; 3.77% in 1946 and 7.47% for the year 1947. At the end of the year 1947 the company was furnishing water to 745 customers who consumed an average 38,000 cubic -7-