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Mr. 6. A* Cunningham -3- 4/24/58 with respect to that portion of the capacity of Well No, 1 which we have not actually used during the last five years* We do not need any permit for this well In order to enable us to continue beneficial use of the amount of water and for the purposes for which It has been used during the last five years. However, if we should in the future desire to use this water for supplying gas turbine locomotives or if we should desire to make an increased use* for ahy other purpose, . we should obtain a permit therefor. With respect to Well No, 2, it is my understanding that this is a much larger well than Well No. X; that it was drilled some time £fter 1913 and that we have not been accus­tomed to make any beneficial railroad use of the water from this well during the last five years, but that we have leased the well to a third person for his use. In the first place, it is ray opinion that we should have had a permit before drill­ing this well because at the time it was drilled, Section 534*050 had not yet been enacted. This is the section which, as above set forth, allows the contractor to go ahead with drilling the well at present because it is not in a conservation area. The Basic Law, enacted in 1913# required everyone to get a permit before commencing the drilling of a well. Whether or not we were wrong in not obtaining a permit before drilling the well, however | we should have obtained a permit before using the water. Furthermore, the use to which the water should be put Is a beneficial use for our own purposes and, in my opinion, does not include developing water on one's own land for the purpose of leasing the well to a third person. In any event, it seems that matters which might em­barrass, the RaiIroad Company might well be brought up if there is an investigation of the water situation at Dry Lake, such as would be bound to be instituted by the State Engineer if we were to protest the granting of a permit to the contractor. Also, at the proper time consideration should be given to applying for a permit with respect to Nell No. 2, As I understand the law, however, the proper time would not be until such time as we desire to make a beneficial use of the water developed from Well No, 2 for railroad purposes. Iaa sending Mr, Gory a ropy of this letter and will appreciate his reviewing the same and advising whether he agrees with the foregoing comments or whether he has any correc­tions or additions to make. In the event it is decided to protest the issuance of