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C O P Y V December 30, 1919. Ur. Hale Holden, Regional Director, Chicago, Illinois. Dear Sir:- Las Vegas, Nevada, terminal of the Los Angeles & Salt Lake Railroad, which includes its principal shop, receives its water supply through a pipe line 9,200 feet long, consisting of 4,000 feet of 16 inch redwood stave, 2,200 feet of 16 inch vitrified clay encased in concrete and 3,000 feet of 16 inch plain vitrified clay pipe. The latter has failed and reduced the water supply to such an extent that it is seriously interferring with operations; in fact, it has been necessary to haul some water to Las Vegas to meet the situation. It is necessary to immediately renew the 3,000 feet of plain vitrified pipe, which will involve an expense of approximately $6,000., all chargeable to Operation, and I have authorized digging trench and placing order for the new pipe which, however, cannot be delivered for about 90 days. Inasmuch as this is an unusual or extraordinary operating expense, the matter has been discussed with the Corporation but it is unwilling to agree in advance to pay the cost of the work on the assumption that maintenance expense for the Los Angeles & Salt Lake Railroad will be equal to or exceed the equated maintenance expenditure during the Test Period. The Corporation, however, recognizes its obligation under Paragraph B of Section 5 of the Standard Contract to pay for this work if final accounting shows that it will constitute an excess of maintenance as defined by the contract provisions. This conclusion is reached by the- Corporation upon the understanding that maintenance allowance has been predicated partly on estimates and is not conclusive that total maintenance expenditures during Federal Control have exceeded average of equated maintenance expenditures during the Test Period; also, that the work will not be done until next year and that the maintenance expenditures during January and February may not exceed the equated maintenance expenditures during the corresponding months of the Test Period. Yours truly, (Sgd) E.l.Calvin.