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Mr* W. E. Rouse 3 November 11, 1952 question of whether capital losses could be realized in the accounts of the LVL&W Company should be thoroughly canvassed because I think there are certain advantages In having the transfer of the water production facili­ties made to the LVL&W Company so that it can make the sale of the combined plant to the District* Section 6137 of the Nevada Compiled Laws must be considered in case a sale to the District is made either by the LVL&W Company or by the Railroad Company. This section provides in part that MIt shall be unlawful for any public utility to discontinue, modify, or restrict service to any city, town, municipality, community, or terri­tory theretofore serviced by it, except upon twen­ty (20) days* notice filed with the commission, specifying in detail the character and nature of the discontinuance, or restriction of the service intended, and upon order of the commission, made after hearing, permitting such discontinuance, modification, or restriction of service.” If the LVL&WCo. made the sale of the combined plant to the District, it would have to comply with this provi­sion and obtain the consent of the Public Service Com­mission. I think the Commission would grant permission to discontinue service if it were convinced that the service would be continued by the District. If a sale were made in such a fashion, no authority would be re­quired for the transfer of the water production facil­ities by the Railroad to the LVL&W Company because th$ Railroad Company is not now classified as a public u-tility. If the LVL&W Company should transfer its water dis­tribution system to the Railroad Company and the Rail­road should sell the combined plant to the District, we would have to give consideration not only to the above quoted portion of Section 6137, but also to the provi­sions thereof stating as follows: ”Svery public utility owning, controlling, operating, or maintaining or having any contera-