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G A I L C. L A R K I N SENIOR C O U N S E L S o u t h e r n C a l i f o r n i a . E d i s o n C o m p a n y E D I S O N B U I L D I N G L O S A N G E L E S 53 , C A L I FO R N I A February 17, 1949 Mr. E. E. Bennett UGneinoerna lP aScoifliicc itRoarilroad Company 422 West Sixth Street Los Angeles, California Dear Ed: I am sending over some briefs involving the condemnation of our property in the case known as Southern California Edi­son Company vs. Railroad Commission. You and Renwick may find something of value. I would make the suggestion that with respect to the pro­posed new section to the laws of Nevada, that you do not ac­cept the concept that upon condemnation you are entitled to the value of the thing taken together with severance damages to the remaining system. Our experience with the California Commission indicates that this results practically in a mathe­matical determination. The valuation engineers in California are apt to take the following steps: (1) inventory the property, (2) determine actual original cost, (3) determine reproduction cost new at the date of taking, (4) determine depreciation on a mathemati­cal basis, (5) estimate the cost of "binding up the wounds" resulting from the severance of part of your system, and (6) throw in 10$ to cover all of the other elements that the courts state must be considered, such as observed depreciation, ob­solescence, good will and other intangible matters. On the other hand, it has always been my opinion that the constitutional right of the condemnee is to receive "just com­pensation”. The cases definitely hold that in the case of utility property which is not generally dealt with on the mar­ket, that "market value” is not the equivalent of just compen­sation because market value cannot be ascertained. The court