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Mr, Wra, Reinhardt 2 expense* In the reproduction cost of oil pipe lines they generally allow only'l$ although I have noted one case where 2% was allowed due to difficult construction on account of canal, railroad and highway crossings and the construction of larger buildings. It is my present thought that probably an addi­tive of 2% for the production facilities and 1$ for the distribu­tion facilities would be a fair allowance. However if higher percentages can be supported by cost data or estimates they should of course be used. General Expend!turea: The I.C.G. in its reproduction of railroad facil­ities and oil pipe lines universally include an additive of applied to base cost plus engineering for organization expense, general officers and clerks, law service, stationery and print­ing, taxes during construction and other general expenditures. I would recommend this same procedure in estimat­ing the reproduction cost of the water facilities instead of the 10$ as noted above under “Overhead Costs". Interest during Construction: Reproduction cost includes l\% for l/2 the construc­tion period of 3& months or a total of 6$ applied to base eost plus overhead plus engineering. The I.C.C. in its reproduction cost of L.A.&S.L. R.R.Co.*s line between Las Vegas and Caliente, which includes the water production facilities at Las Vegas, estimates the construc­tion period at 30 months and computes interest at 6$ for l/2 the construction period plus 3 months or a total of 9$ which is ap­plied to the base eost plus engineering plus general expenditures. In the reproduction cost of oil pipe lines the I.C.C. have esti­mated construction periods of from 2 to 6 months in the valua­tions I have reviewed, with length of trunk and gathering lines of from 166 to 826 miles. The type of construction is different than that of our water facilities and direct comparison is not afforded. For the LA&SL water production facilities at Las Vegas, the largest single project as constructed was the Charles­ton Blvd. Reservoir, settling basin, well, pump-house, pipe lines and power lines constructed under work order 31o0 in 19i+6, the cost