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In the accounts at the time the property changes were effected It is ay view that compensatory water rates should be based upon the value of the property rather than on in­vested cost or “historical cost*0 It is also my understanding that no opposition to that principle was expressed by anyone during the informal conference recently held at Las Vegas. If you are In accord with that procedure, we are in a position to support, as of May 31, 1949, the following data as indicated on the attached summary statements identified as ”Aa and uB a: Statement aA a - Las Vegas Land and Water Company: Investment cost: Land $ None Water Distribution System,etc. 606.597.94 Depreciation and amortization accrued Booh value Present value: Land - present market value # None Water distribution system,etc.- Cost of reproduction less depreciation 621.008.00 #606,597.94 226,401.12 380,196.82 621,008.00 Statement HB H - Los Angeles & Salt Lake Railroad Company: Investment cost: Land Water supply system and trans­mission lines Present value: Land - present market value Water supply system and trans­mission lines - cost of reproduction less depreciation I 34,985.88 .753,695.04 406.144.00 912.616.00 #788,680.92 1 ,3 1 8 ,7 6 0 .0 0 Under date of October 28, 1949, the Association of American Railroads announced the latest methods fixed by the ICC in arriving at a single sum value for the rate base of the Ajax Pipe Line Company. By applying these foregoing data and adding recorded amounts for mceatshho dasn d to the material on hand, a rate base of #1,804,192 would be found as of May 31, 1949. Details follow: