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I -2- The chief purpose of the pipe line and the facilities at the spring is to insure a water supply for the Railroad; all other rights and privileges granted are made secondary and subordinate, as the proposed agreement evidences. Still, in apportioning upkeep expenses Las Vegas Land and Water Company is put upon a plane of equality with the Railroad because it receives a surplus flow of 2,820,000 gallons per day (much of which also becomes a surplus that produces no revenue) and is made to bear 77$ of such expense. An arrangement of this nature can hardly be called equitable. The Water Company incurs a monthly deficit of more than $4000.00 at present. This is brought about principally by the payment of taxes on East Yard property to which there is no offsetting income. In spite of every effort made toward economy, the low rents charged in Las Vegas Rooming House bring barely enough revenue to cover expenses. The water system at Yermo has thus far given no income, all collections having been retained by the Railroad. Depreciation of Company Cottages in Las Vegas has progressed to an extent that will soon necessitate extensive repairs, and the resultant expenditure will absorb the rents for some time thereafter. How to add another to the units of the Com­pany not paying a return is disturbing, from an operating viewpoint. However, these facts are set forth less as an objection or protest than as an explanation of conditions. The course decided upon has doubtless been fully considered and deemed politic for the Railroad^ W—^ •*- Yours truly. W a lte r R. B racken, V ic e P r e s id e n t and A g e n t. s