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'annual 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 latter items is compara­tively large, 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» stood at #160,482.97. Historically this capital was amortized and the following sets forth the amounts, along with net earnings and other pertinent informa­tion, as follows: let After Amortization Amortization Expense Hat before Amortization 1942 1943 1944 1945 147782 7,342 #9,129 17,920 '{1 5 ,0 3 2 1 36,802 (#70,378) 98,419 , and Income Taxes 'i’Less Sat. Income Taxes Net before Amortization Net to Said 6% ©n Investment I2 -T Z 4 3.170 “ BfV5X 12,400 277B 59 9.200 1 77 85 9 17,700 3 1 ,7 7 0 10.£00 207970 19,200 '"237041"’ 9,500 T i t t e r 25,000 It thus appears that Defense Capital amortised through charges to operating expenses during the four years 1942-1945 inclusive, was done at the sole expense of the stockholders. The problem to decide is - How shall this #160,483 be treated in computing the present and prospective earnings of the Water Company. 1 (1) limited to normal and sur-taxes estimates