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(COPT OF A COPT) C £ ) . - / / ' &r . / ) to* / % $ U f *? Omaha - January 7, 1952. 3 7 0 3 .1 , V ol. 10. Mr. A. E. Stoddard: CC • Mr. E. M. Sutton Mr* W. R« Rouse P le a se r e f e r to your l e t t e r of Dec. 10, 1951, f i l e 199. a tta c h in g copy o f Mr. R e in h a rd t’ s l e t t e r to you of Dec. 4 , 1951 and a ttac h m en ts th e r e to su g g e stin g a change in th e c o rp o ra te s e t- u p o f th e w ater pro d u cin g and d i s t r i b u t i n g f a c i l i t i e s in Las V egas. I have been giving this matter considerable study and I am not in favor of setting up a new corporation, principally because this apparently envisions our continued operation of the whfcer system in Las Vegas - at least until its problematical sale on some basis to the Las Vegas Valley Water District. Whereas in my opinion, for reasons which I will try to bring out, we should divest ourselves of title to and any pionstseirbelset. in the property and its operation lust as promptly as While by setting up a new corporation with capital­ization divided between stocks and bonds, somewhat along the lines suggested by Messrs Renwick and Wehe, we might escape any legal obligation with respect to operation of the property, I think we are not here confronted with a legal problem, but by one which is more a political problem and one of public relations. In no event would I be in favor of retaining any first mortgage bonds, which we might have to foreclose on, and be in the same boat we are now in, unless they would be immediately marketable and if they were, we should promptly get rid of them, my views, vI iawi';l-l try to set out hereunder the reasons back of (1) The population of Las Vegas is growing and h as every prospect of continuing to grow. As an instance, shortly after the first of this year the Government has contracted to spend well over $1,000,000 to make permanent the Desert Rock camp, which serves the atomic experiment site in Frenchman’s flat and this will bring in added army personnel. The Flamingo Hotel is presently adding"lOO