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Mr, F.H,Knickerbocker, Los Angeles, California las Vegas, Nevada, Kay 24, 1927, ¥-15 Bear Sir: Enclosed la the proposed new agreement under whose terms the LA & SL HE Co* will supply LVL&W Co, with water for distribution in Las Vegas, as outlined in your letter 085-355 of May 20, The attached statement demonstrates that an increase from #200*00 to $500*00 in the monthly cost of water will result in an operating deficit for this Company. An average of the first six months of 1928 is shown in this statement, as maintenance costs in the last half of 1926 and in the first months of 1927 are unusually high due to the water-main renewal under Work Order ho. 31 at a cost of #17000.00, An annual increase of $3600*00 in the price of water seems excessive to the point of exorbitance as there are no means of obtaining additional compensation in retailing; this Company is restrained by franchise from increasing its rates, and the yearly increase in business volume is negligible. The advanced charge is evidently based on Nr. Adamson * a letter 20-8 dated April 22, which reflects certain hastily-formed opinions and takes other doubtful matters as granted facts. The population of this town is reported as having increased since 1920 from 2000 to 5000, according to the Chamber of Commerce. All Cham­bers of Commerce say tilings, none of which indicate diffidence. For instance, the local Chamber displays a booster (or boaster) sign at the depot proclaiming: POPULATION 1930- 25000. But to ascertain approximately the actual population at present it is more reasonable to proceed somewhat as follows, employing the figures in our recdrds: Water Water Year Population Services Collections Increase 1920 2304 423 $824.95 1927 7 571 1227,84 About « The present number of 571 services includes 78 served by three other companies, some of them having an independent source of water in 1920, Continuing our computation by increasing 2304 with 35$ of itself we obtain a population of 3110 for Las Vegas in 1927, if the 1920 ratio between services and residents still holds good. A parallel increase in the Railroad*s charge for water would make the rate $270.00 per month.