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continue our recent policy of extending distribution mains wherever reasonable inducement offers, municipal ownership is not likely to become a pressing issue. Neither the city nor ourselves would benefit from municipal ownership under existing conditions. (4) With regard to water from Lake Mead by extension of the line now being constructed to serve the magnesium plant, I think the subject should be gone into by Mr. Bracken with those active in the city1s affairs, to determine whether the city wants the lake water, if it should be piped to Las Vegas, combined with the product from our springs and wells, or desire to limit the use of the lake water to larger industries, in which latter event our mains need not be connected with the Lake Meed line. (5) Estimates as to the amount of water supplied to the LVLandWCo. , and also as to the amount sold by that company to its customers should not be resorted to as has been done during the 1 2 year period reviewed. T recommend replacement of meters Nos. 2601, 2594 and 7064 at Las Vegas with meters that will accurately measure the water. The responsibility for keeping meters in perfect operation should be firmly impressed upon the division superintendent of the LA&SLRR. No more meter failures should be permitted. (6 ) No system is in effect for auditing the revenues accruing to the LVLandWCo. from water sold. This condition should be corrected promptly. The first step under a simple accounting plan would be to Inventory the service outlets and assign an audit number to each. The maintenance of theue numbers would provide a running record of the sources of all water revenue and would be the base from which physical and office checks could be made at any time selected. Making the block