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Omaha, March 17, 1932 Mr. F. H. Knickerbocker, Vice President, Los Angeles, Cal Dear Sirs The water operations of the Las Vegas hand and Water Company at Las Vegas, for the period October 1 to December 31, 1931, since the increased rates have been in effect, show a net profit of $3,692, which is at the rate of eighteen per cent per annum on the investment. However, during this period the expenditures for maintenance were quite low, averaging $125. per month, and any large expenditure for pipe line renewals would reduce materially or eliminate the present margin of profit• During the period January 1, 1920, to September 30, 1931, a net deficit of $29,994 was incurred, after including in expenses interest on investment at 6 per cent, and restating for the years 1927, 1928 and 1929, payments to the LA&SL for water on the basis now in effect. The attached statement gives the details of each year's operations. The increased rates granted by the Public Service Com­mission, effective October 1, 1931, average approximately 20 per cent higher than the rates in effect prior thereto. The applica­tion for higher rates was to have been made for a loo per cent in­crease in all rates, but I note from the schedule contained in the Commission's order that the increases in rates proposed by the Las Vegas Land and Water Company were as follows: of Items Percentage Increase ~T~ 500 9 100 9 20 to 50 15 Hone 1 40$6 deer The above Includes only items contained in both old and proposed schedules. Will you please advise why the application did not ask for the ld|f per cent increase in all rates. The large deficit accumulated in prior years, and the probability that the present margin of profit will not be as large for a year's operation, indicates the necessity for close supervision, with the following in mind: