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' ? Mr. W.R. Housei cc: Mr. W®. Reinhardt Mr. W.H. Hulsiser Mr. R.M. Sutton ' - -- S , ' ,l r t C * . - ' ‘ - jft* In connection with Mr* Stoddard's mailgram S-39^ to Mr. Reinhardt, dated March 27th, copy of which you sent me with your mailgram of March 31st: I would like to draw your attention to a phase of this transfer which possibly has not been given consideration by our executives in Omaha and which I think is of material Importance in the event the proposed bond issue doesn't carry. It is my recollection that the Union Pacific or Los Angeles & Salt Lake Railroad Company carries as an open book account, without any Interest charges thereon, the indebtedness due fram the Las -Vegas Land and Water Company. As you know, it is still an open question whether the proposed bond issue to be floated by the Les Vegas Valley Water District, for the purchase of the production and distribution facilities of the railroad and the Water Company, will be approved by the voters of the Las Vegas Valley Water District. If that is not approved, we will probably be faced in the near future, with the necessity of filing another application for increase in water rates. It would seem to me desirable, therefore, in the propoaed transfer to have the cost of the facilities transferred by the railroad to the Water Company, to be evidenced by something more substantial than an open account or at least to have that open account bear Interest. This would not necessarily include interest on the present open account but on the sale price as evidenced by the transfer. Possibly it might be better to have the cost of the railroad facilities so transferred to be evidenced by an Interest-bearing note of the Water Company or to go further, by bends issued by the Water Company and accepted by the railroad company In payment for the railroad facilities. The Interest on such Indebtedness would, of course, be taken into account In any rate hearing and such outstanding indebt edness would alao be given.consideration in the event the Water Company was requested to make additional large expenditures for improvements and would be obliged to secure outside Los Angeles - April 6 , 1953 8 0~3ri —