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EX PLA NA TO R Y TEXT Reproduction costs have been estimated by trending original cost in place at date installed to the average prlee level for the three year period 19*4-7 to 19*4-9. Price trends are developed by using the ratios agreed to by joint committees consisting of representatives of the Western Carriers and the Bureau of Valuation, Inter­state Commerce Commission. These ratios for buildings and appurtenant facilities (including wells, pipe lines, etc.) are developed each year and a joint report issued showing the relation of construction costs for that year for rail­roads in Western Group territory to reproduction new costs on similar items at the average price level for the five year period 1910 to 191*4-. These ratios have not yet been developed for the year 19*1-9 and ratios for this year have been taken to be the same as for 19*4-8. To illustrate, the estimated present reproduction cost of a wrought iron pipe line constructed in 19*4-2 at a cost of $1,061.07 is developed as follows* Ratios for wrought iron pipe lines: Year 19*1-7 - 2*4-5 * 19*4-8 - 270 " 19*4-9 (est)- 270 3 year average - 262 Year 19*4-2 - 190 Estimated cost of reproduction new : $ 1,061.07 X 262 p $ l,*t-63 190 Depreciation: Depreciation for the different classes of property from date installed to present date has been computed at the rates allowed by the Bureau of Internal Revenue for income tax purposes. No property was depreciated below 25$. Office of General Manager of Properties Omaha, Nebraska April 12, 1950