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Los Angeles, March 18th, 1930 9436-3-W Mr, W, R. Bracken: Referring to your personal undated memorandum, with which you transmitted copy of your letter March 15th to me upon subject of water supply at Las Vegas, separate reply to which letter I have made to you today: As for the question of increasing water rates at Yermo, I note you appear to have the impression that we are arranging to install meters at that point. While this was contemplated some time ago, yet I thought it was understood from our conversation latter part of February that I had decided it would be preferable to increase present flat rates. We have now under consideration just what increase should be made in those rates in order to at least materially decrease the deficit now being incurred by the Las Vegas Land & Water Company in sale of water at Yermo. The situation at Yermo is, of course, not altogether comparable with that in Las Vegas, in that Yermo is a very small community and practically all of the residents are railroad employes and their families who are entirely dependent upon the Railroad Company for water. Granting that it is to our benefit to not make an excessive charge for water, in order to encourage employes to plant and maintain lawns, shrubbery and trees to make their homes more attractice, yet inasmuch as the existing flat rate is not anywhere near sufficient to cover the actual cost to the Railroad Company of water developed at that point and sold to the Las Vegas Land & Water Company on basis of 10-cents per 1000 gallons, it does seem that it is entirely proper for us to increase the present flat rate to, say, $2.50 per month. On the other hand, while the Land & Water Company is classed as a public utility in the State of Nevada, yet that situation does not obtain with respect to California, so that should we increase our existing rates at Yemo too high, some disconcerted person may appeal to the California State Railroad Commission and result in an order from that body to the Land & Water Company to file a schedule of rates, although should anything of this sort occur, we could unquestionably contend for a schedule of rates which would at