upr000105 35

m e t - M m m % NOV. 2 7 1951 R D Y A. W E H E C O N S U L T I N G E N G I N E E R P A C I F I C M U T U A L B U I L D I N G 6 6 D M A R K E T S T R E E T S A N F R A N C I S C ? <4, C A L I F O R N I A B. B; B, Hoy 26 1951 Noveafber 23, 1951 Mr. Edward C. Renwick w Assistant General Solicitor Union Pacific Railroad Company 422 West Sixth Street Re: File 4705-11-22 Los Angeles 14, California Dear Mr. Renwick: thus bI e wabsr oupglheta suepd ttoo draetcee ivoen ytohue r prloegtrteesrs ofo fN otvhee mbweorr k 15a nda nydo ur thinking. I have been pondering over the suggestion raised by you as otow netdhe apndo ssoipbelrea teadd vabnottahg etsh e anpdr odduicsatdivoann taangde sd isift ritbheu tWiToatne rf aCcoimlpiatn­y ies as an independent company. If the assets of the Production Company, as represented by its water production and transmission facilities, were transferred ctoo rptoher atDei starctiibvuittiioens Caonmdp anrye oarngdan itzheed ,l attthee r owdnievrosrhciepd, frtohmr ouitgsh osteh­er curities to be issued, would necessarily have to be held by Union Pacific. I say '’necessarily” for the reason that I do not believe ctihpearel rweoauslodn sb,e naanmy elpyu blbiecc aumsaer keoft: at the present time for two prin­The most urgent condition to follow up on is item (l), that hiis,g hetro kreaetpes atf ort hew attears k seofr visceec.uring the necessary earnings through The question then arises, is there any advantage in changing the corporate set-up, even though the ownership in effect remains uonf chtahne gewadt earn d cbuesctoamuesres ofa ret hnato,t ttoheo mruecghu lactoonrcye rnaeudt hoirf ittyh e an’’dr imcahn”y Union Pacific does not earn the generally accepted rate of retu rn. ings1.. The present and recent past unsatisfactory earn 2. The critical water supply situation Before examining some of the considerations that management