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•nnual depreciation e xpense. Such depreciation deduction is either that set up on the books or as computed as the reserve requirement* In addition, these fixed capital accounts have been lessened for Amortisation of Defense Plant Properties and for Donations In Aid of Construction* Since the magnitude of these letter items is compare* tivsly largo, the disposition of these is fairly important and some special discussion is believed warranted. Amortisation of Defense Plant Facilities: On the Balance Sheet as of 12/31/49 this item, under Account 175, etood at $160,402.97. Historically, this capital was amortised and the following sets forth the amounts, along with net earnings and other pertinent information, as fellows: 1942 1943 H«?t After Amortisation $4,782 $9/^9 Amortisation Expense 7,342 17,920 Net before Amortisation and Income Taxes 12,124 27,049 J-JLess 1st. Income Taxes 3.170 9.200 Met before Amortisation 8,17,149 Hat to mid 6£ on Investment 12,400 17,700 TI57Bm 36,S02 3T,773 10.BOO 20',*970 19,200 It thus appears that Defense Capital amortised through charges to operating expenses during the four years 1942-1945 inclusive, was done at tha sole expense of the stockholders* The problem to decide is - How shall this $160,4*3 be treated in computing the present and prospective earning# of the later Company. (1) limited to normal and sur-taxes estimates.