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% / .] Q&j WM. R. JAN 20 1& January 26, If 50 File 5 8®-5 Mr* Bey A* Wehe 111 Suitor Building San Francisco 4, Calif* Boar Mr* wehts I hare your latter of January 20th outlining your understanding of the study to he made by you in eonneetion with proposal to increase the rates of the later Department of the Las Vegas Land and Water Company at Las Vegas, Nevada* In general, your understanding of the work to he undertaken is In aeoord with mine* However, I do have a few comments upon certain matters re­ferred to in your letter* tion he given to adjusting the hook figure® to reflect the esti­mated historical cost of the properties. I am not certain whether you are suggesting that consideration he given to adjusting the present accounting records or whether you merely have in mind the preparation of an estimated historical cost statement for use be­fore the Commission in a rate proceeding* This is a matter which will have to he given careful consideration by our auditor and other executives after you have developed from our records the necessary material from which to prepare an estimated historical cost upon a basis which you can recommend* Undoubtedly an historical cost statement would have greater weight with the Commission if the cost therein developed were actually reflected in our hooks and if our accounting methods thereafter used were In conformity therewith. I also sec an ad­vantage in having such historical cost reflected in our hooks in ease of a future sale or condemnation of the water distributing and producing facilities at Las Vegas since we anticipate that the historical cost which you develop will exeeed the present hook value. You state that it Is your own tiews that considers W. H. J. JAN 2 7 1950 JAN 27 '950 La* C l Cl