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Los Angeles, March 26,19^6. Mr, A. H. Scribner? (a / ^ 0 ' ' (ce- Mr. ¥. R. Bracken Mr. Frank Strong Mr. 1. 1, Bennett Mr, Leo A. McNamee) Re Nevada taxes- LVL&W, Supplementing my letter of March 11 on the sub­ject of Nevada taxes: in conversation last week with Mr, <!*$> Allard of the Nevada Tax and Public Utilities Commissions, 1 was advised, that our statement that the LVLAW water plant was operated at a loss, was not taken seriously; that the additional water distribution facil­ities now being constructed by the Railroad 2k inch pipe line and l£ million gallon reservoir - were considered as necessary facilities of the LVL&W which are essential for water service in the southerly additions to has Vegas; that water facilities constructed by the Railroad in recent years in the area west of its yards-as wells, pipe lines, pQmps,©te.,were likewise consider­ed as essential to the hVLAW water plant; we furnish Itemised statements showing as to the area west of the yards the investment of the Rail­road in water production and distribution facilities for each of the past six years; that the amounts of interest and depreciation charged the LVLAW by the Railroad are exhorbltant: that the value of the facilities on which LVLAW pays the Rail­road rental should be in the LVL&W investment account and that rental paid therefor is not a proper operating charge; there will be a substantial increase In the %$k& assessment of the LVL&W water plant. Mr. C. B. Sexton, who was Allard’s predecessor, regularly protested the LVL&W reports as being incomplete and unsatisfactory for his purposes in arriving at a Valuation of the water plant, and particularly he objected to the terms of the rental contract with the Railroad which he considered ex­orbitant and unjustifiable. The contentions of Mr, Allard are identical with those first advanced by Mr, Sexton in 19^0, S