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X V Isos Angeles, August 4, 1954 80-12 Nr. R. M. Sutton i (cc - Nr. W. R. Rouse Hr. W* H. Hulaizer Mr. Wm. Reinhardt Mr. V. K. Johnson Mr, C, M. Bates) 1 have jour mailgram of July 30th regarding hilling by Union Pacific for general administrative, management, engineering, legal and accounting services furnished to LVL&WCorapany. These services are furnished pursuant to Section 9 of agreement between the two companies dated November 30, 1950, UP Audit No. 74531 and LVL&W Audit No. 10567. It is ay view that Section f of that agreement should be terminated as of June 30, 1954. It may be that the Accounting Department will wish to make a charge to the LVL&WCorapany for services rendered after July 1, 1954, in connection with the closing of the books of the Water Department of the LVL&WCompany, but it appears to me that that should be a separate item and not a charge made pursuant to the estimates which were made by all departments for services normally rendered in the main­tenance and operation of the Water Department. The agreement between the same parties dated August 1, 1953, UP Audit No. 80300 and LVL&W Audit 10699, providing for granting of revocable license by Railroads to Water Company for water transmission and power lines and for fur­nishing of water by Water Company to the Railroads, has ex­pired by Its own terms, but it probably is desirable to pre pare a formal termination for record purposes. I also agree that commencing as of July 1, 1954, no further charges should be made against the LVL&W Company for such services by the Union Pacific because such charges relate solely to services furnished in connection with the management of the Water Department of the LVL&W Company. It may be that our executives will desire to make some charge against the LVL&WCompany for management services furnished in connection with Its other functions, but that is not re­lated to the charges which have to do solely with the Water Department of that company. AUG 5 1954 L . C . C .