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upr000105 324

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upr000105-324
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    File: 4705-11-22 Mr. Roy A. Wehe 408 Paoifio Mutual Building 660 Market Street San Francisco, California Bear Roy: November 15, 1951 You will be interested to know that when I examined seme of the affidavits of well completion filed by the LVL&WCo. with the Nevada State Engineer after my return from Carson Olty, I found that the affidavits did not purport to state the exact cost of the well and its connecting pipe line. There is nothing in the law whieh requires a statement of the actual cost of drill­ing we U s and the forms which are prescribed by the State Engineer state that at least a stated amount of money has been spent. For that reason, 1 do not think we are in a vulnerable position but 1 am having the filings reviewed so that we will know the true facts. I am also asking the Auditor to furnish additional infor­mation with respect to the Railroad capital Investment and aleo to furnish the Commission an Annual Report covering the water produc­tion facilities. The complaint against the Commission is being filed this week but X expect to have another conference with Mr. Allen after X have obtained additional information. I I have told Mr. Reinhardt on several occasions I believe it would be wise for the Railroad to transfer the water production facilities to the Water Company. In fact X believe there should be a Water Company owning both production and distribution facili­ties completely divorced from the Railroad and from the real es­tate interests of the LVL&WCo. It seems to me that such a Water Company would be In a strong position to demand proper rates before embarking upon extensive capital expenditures. The Railroad Com­pany could easily refuse to advance the money for such expenditures and X do not believe that the Water Company owing a substantial debt to the Railroad Company could borrow additional money from other sources unless its earnings were satisfactory. Mr• Reinhardt is now inclined to believe that this may be a good idea and has asked me to prepare a brief memorandum setting forth the advantages of such handling so that it can be considered by the President and other interested officers.