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Hr* Sexton* #3 July 81, 1939, The oa»h of the L&s Vega® Lend and Water Company ha# not been earmarked by departments. All collsetions from every source bar© been included in a single ©ash fund from which all disbursements have been sad a. 1 do not be* litre that any business operating more than one department attempts to allocate its cash .fund to the respective depart— meats operated. Any attempt to make such an allocation mould be burdensome and unwieldy and would result in an unending series of loans and repayments between departments, ana so far as the officers of our Company are concerned would add nothing to the ability to ©zeroise proper super** yleios over the company’s operations. The fact is, then, that the net earnings of the water department, less expend!* turee-maie from such earnings for investments, are not rep* reeaeted by cash on hand for the reason that all or part of eueh net earnings have been used in connection with the cp~ oration and Improvement of other departments of the Company, Regarding your reference on pages 40 and 48 of the transcript, to some four million shown as assets, I understand your wishes will be met if we exclude from the balance sheet schedule of the Annual Report to the Commis* slon all ssaete and liabilities applicable to other than water service operations. TMas can only be done by assuming, as stated above, that non© of the proceeds from issuance of capital stock were used for the water service system, sni treating the difference between the assets and liabilities as heretofore determined for the purpose of the Annual Report as account# receivable from the other departments of the Company. There mould still be no amount reported for cash as all cash rights of the water depart** moot would be in accounts receivable from other departments, Trusting this will be satisfactory- t© yourself and the Commission, s M with kindest personal regards, I remain Tours very truly. iI ltI r r V "b r a c k e n , 'Tiee**Freeident»