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Los A n g e le s , August 4 , 1954 80-12 Mr. R. M. Sutton* (cc - Mr. W. R. Rouse Mr. W* H, Hulslaer Mr. Wm, Reinhardt Mr. W* H. Johnson Mr. C. M. Bates) I have your mailgram of July 30th regarding billing by Union Pacific for general administrative, management, engineering, legal and accounting services furnished to LVL&W Comp any. These services are furnished pursuant to Section 9 of agreement between the two companies dated November 30, 1950, UP Audit No, 74531 and LVL&W Audit No. 10567. It is my view that Section 9 of that agreement should be terminated as of June 30, 1954, It may be that the Accounting Department will wish to make a charge to the LVL&WCompany for services rendered after July 1, 1954, in connection with the closing of the books of the Water Department of the LVL&WCompany, but it appears to me that that should be a separate item and not a charge made pursuant to the estimates which were made by all departments for services normally rendered In the main­tenance and operation of the Water Department, The agreement between the same parties dated August 1, 1953, UP Audit No. 80300 and LVL&W Audit 10699, providing for granting of revocable license by Railroads to Water Company for water transmission and power lines and for fur­nishing of water by Water Company to the Railroads, has ex­pired by its own terns, but it probably is desirable to pre­pare a formal termination for record purposes, I also agree that commencing as of July 1, 1954, no further charges should be made against the LVL&W Company for such services by the Union Pacific because such charges relate solely to services furnished in connection with the management of the Water Department of the LVL&W Company * It may be that our executives will desire to make sob® charge against the LVL&WCompany for management services furnished in connection with its other functions, but that is not re­lated to the charges which have to do solely with the Water Department of that company. AUG 5 1954 Li C, Cl a a s . »ua 4 HM