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Filed. M. F o rm 16-1 25,000 Telegram r > I SALT LAKE ROUTE Los Angeles, Dee* 87, 19X9* B* 1* Calvin, Omaha, Nebraska* Oar conversation a few days ago In regard renewal portion pipe line Las Vegas* fhts work Is argent and must lie taken oars of at ones* It is estimated expense replacement thousand feet vitrified pap pipe with wood staves will he between Five and Six thousand dollars inolading cost of distributing ditohing and backfilling* It Is prohshle that oost of renewal with wood staves will he approximately same as present cost of renewal In kind, so that very portion total oost will he charge able to capital aooount* Corporation is of course, willing to hear any expense in connection with project properly chargeable to capital account, ffifltt expense to he financed hy deduction from standard return*. I have had twitter up with icy brother and Judge Lovett and the Corporation is unwilling to agree in advance to pay cost of work properly chargeable to operating expense on assumption that maintenance expense for this line will he equal to or exceed the equated maintenance expenditures during test period* corporation, however, recognises its obligation under Paragraph B, of Section Five, of Com­pensation Contract to pay for this work if final accounting shows that it will constitute an excess of maintenance as defined hy the contrast provisions, fbfs conclusion is reached through our understanding that maintenance allowance for current year on this line has boon predicated partly on estimates, and is not conclusive .that total maintenance ex­penditures during Federal control have exceeded average of equated saint enanoe expenditures during test period, and as to this partienlsr project the work will probably not he done before January First and if done in January or Fehruaxy,maintenance expenditures during those months including expenditures for this woxk may not exceed the equated mainten­ance expenditures during the corresponding months of the »e|iwper 100.0 ill you please advise If you will authorise the renewal of this line with the above understanding* J. HOBS OLAHK* CC-J.D.F.