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E. E. B. 2. July 10, 1952 with Mr. Wehe, and he believes that 10$ is a rough, average figure to use for going value in the absence of a more complete calculation. I believe the representatives of the District have already made some comment that in view of our present earning position our company does not have a going value. That view overlooks the fact that the company for many years filed earnings statements with the Commission showing a favorable earning position and it is because of the recent increased costs which are being incurred whieh have not been fully met by rate increases that it is not in a favorable earning position. It cannot be assumed that the courts of Nevada will allow the company to remain in an unfavorable earning position even though because of politics the Public Service Commission has been reluctant to increase our rates by the a-mount we proposed. The important fact to remember is that the Company is capable of being placed in a favorable earning position. The people of Las Vegas are well able to pay rates for water which would provide a fair return. So in no sense is the Water Company an obsolescent plant such as some street railways are where it is impossible for the u-tility to earn a fair return under any reasonable rate schedule• Just as a matter of illustration I should like to quote from the case of U.S. v. Boston C.C. & N.Y. Canal Co,, 271 Fed. 877 at page 896, involving the condemnation of the Cape Code Canal by the United States. This quotation deals with the ascertainment of going value and points out clearly that going value should attach to a plant which operates profitably or which has a reasonable probability of becoming a profitable venture. The Court said: "In ascertaining the fair value of a public utility, apart from its franchise, consideration has to be given to the value of its physical property, including preliminary and overhead costs necessary to prepare the plant for service, and also to those costs incurred in creating the business and revenue of the enterprise, or what is generally known as ’going value’ of the concern, provided the business has become profit-// able, or there is a reasonable probability of ( its becoming so. 7 "In ascertaining the 1going value’ of such a utility, consideration may properly be given