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Mr* Bennett 3 , J a n u a r y 2 0 , 1 9 5 0 Since the straight line method is used in providing for the accounting of the animal depreciation requirements, a depre­ciated rat© has© must he used. This may be obtained by deducting the amount now set up on the books for the retirement reserve when the hook figures are used for the historical cost. Such hook reserve would he subject to adjustment If not within reason­able limits. A proportionately higher deduction for present day cost figures would he appropriate. If the historical cost basis he used, land may he includ­ed at present market value. This last approach will he of espec­ial importance in reference to the L.A.&S.L.R.R.Co., with its im­portant acreage in water-hearing lands. Mon-Utility Operations of Railroad Water ffao 133fci.es In support of the charges made by Union Pacific Railroad Company to Las Vegas Land ana Water Company under the terms of the present contract, an earning study will be prepared. While such study can be Incorporated as part of the main study, It can he handled as a separate chapter or as an appendix, indicating it is supporting material for the cost of water purchased and not as a part of the public utility property of the Las Vegas Land and Water Company. Operating Sspenseg At this time it need only he said that a study of present expenses and practices will be made. Attention will be given to allocation practices and what amounts of salaries and expenses of general and supervising officers and employees are properly charge­able to water operations* Tax and depreciation practices will also be reviewed* Operating Revenues Actual and estimated revenues amounts will be made under present and preferred rates.