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Los Angeles, August 4, 1954 S©*"-12 Mr. R, M. Sutton* FtfiCfilVffD land & Tax m (cc - Mr. W. R. Rouse Mr. W, H. Hulslzer AUG 4 1954 Mr. Wm. Reinhardt Mr. W, K, Johnson Mr. C. M, Bates) Ui.r'.H K Co, LOS ANGELES CAUF. I have your mailgram of July 30th regarding hilling by Union Pacific for general administrative, management, engineering, legal and accounting services furnished to LVL&WCosapany. These services are furnished pursuant to •SS'etlon "9 ' of agreement between the two companies dated November 30, 1950, UP Audit No. 74531 and LVL&W Audit No, 10567* It is my view that Section 9 of that agreement should be terminated as of June 30, 1954. It may be that the Accounting Department will wish to make a charge to the LVL&WCompany for services rendered after July 1, 1954, in connection with the closing of the books of the Water Department of the LVL&WCompany, but it appears to me that that should be a separate Item and not a charge made pursuant to the estimates which were made by all departments for services normally rendered in the main** tenance and operation of the Water Department. The agreement between the same parties dated August 1, 1953, UP Audit No. 30300 and LVL&W Audit 10699, providing for granting of revocable license by Railroads to Water Company for water transmission and power lines and for furnishing of water by Water Company to the Railroads, has expired by its own terms, but it probably is desirable to prepare a formal termination for record purposes. I also agree that commencing as of July 1, 1954, no further charges should be made against the LVL&W Company for such services by the Union Pacific because such charges relate solely to services furnished in connection with the management of the Water Department of the LVL&W Company. It may be that our executives will desire to make some charge against the LVL&WCorapany for management services furnished in connection with its other functions, but that Is not related to the charges which have to do solely with the Water Department of that company.