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E.E.B. 2 August 26, 1952 the year 1952, We are selling to the District many valuable facilities which were never capitalized on the books of the Railroad or the Water Company, and therefore the Commiss i o n s figures do not reflect even the cost of such facilities. With respect to the railroad production facilities these non-capitalized items include such things as maintainerfs shanty and dwelling, roads, most fences, dikes and ditches and pavement work. With respect to the Water Company facilities these non-capitalized items include service connections and the Marlin and 14th Street lines. The Commissions figures represented depreciated book cost. The deductions for accrued depreciation of the production facilities of the Railroad made by the Commission were excessive because they represent the depreciation which Roy Wehe computed upon the original cost of such facilities, which was higher than the accrued depreciation which he had computed upon the book cost of such facilities. With respect to the distribution system the deductions for accrued depreciation made by the Commission included the amortized defense plant facilities, which have been completely written off the books, but which are facilities which actually have substantial present value. In arriving at its rate base figure the Commission also deducted $206,400 as advances in aid of construction. This is the sam^ deduction which Roy Wehe took from the capital base for the purpose of arriving at a rate base and represents approximately 70% of the unrefunded advances existing in the period covered by the Commissions figures. If you were going to consider book values at all, you should consider the true book value of the properties as of the present time. Mr. Hulsizer’s letter to Mr. Stoddard of July 2, 1952, attaches a schedule showing the ledger value of 507 acres of land and of the capitalized production and distribution systems. His figures also include approximately $15,000 as the ledger value of offiee furniture and work shop and equipment. The total undepreciated ledger value of the production and distribution facilities plus 507 acres of land as of June 30, 1952, is shown to be $1,361,039.12. The