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N statement of the duties performed by the various railroad departments, a portion of whose expenses it is proposed to charge to the cost of either producing or distributing water0 Mr. Hulsizer said that he would furnish such in­formation o 2o There was some discussion concerning the value and the area of water producing lands to be included in the rate base. We advised Messrs. Hulsizer and Barnes that some con­sideration was being given to the area to be included, it being our thought that some of the land was not required for production of water. Mr. Barnes stated that he did not think that was a facto We told him that we had not come to a definite conclusion on the subject, but had the matter under discussion0 We told them we would be glad to have their views on the land question, and Mr. Hulsizer said he would furnish his views. 5. The value of land to be included in the rate base was also discussed,, We advised them that we proposed to use the present market value of land in our rate base, and we all agreed that Mr. Charles Adams should be largely relied upon for this value. However, it would also be necessary to have a rate base developed on recorded costs. We pointed out to them that we expected difficulty with the Commission on this item. Mr. Wehe advised them that Mr. Allard, Chairman of the Public Service Commission, at our recent informal discussion had expressed himself very definitely that the original cost of the land as well as plant should be used for rate-making purposes. We also advised them that the California Commission, although it had previously adhered to the use of present market value of lands in conjunction with historical cost of plant in the establishment of a rate base, had recently changed its views, and in the Pacific Telephone Case and several water cases, had used the original cost of land rather than its present market value in fixing a rate base. We pointed out that the Nevada Commission is a small commission without engineering staff, and works closely with and relies ex­tensively upon the views of the California Commission. We pointed out that Mr. Allard, the Chairman of the Commission, is a close friend of one of the California Commissioners, and that we loiow he has already consulted the California Commission concerning some of the problems involved in our proposed rate increaseQ Mr. Wehe stated that he had found from our recent conference with Mr. Allard that he was reasonably well informed on rate-making matters and the recent change in regulatory policies sions I of many State commis­i