This investment was effected with the proceeds from the tax of one-tenth of 1 percent which up to that date aggregated $1,485,092.25, the surplus from operation and a bond issue of $1,000,000.

In the year 1935-36, the Matrullas section of the Toro Negro project was completed. The work performed in this section consisted of the construction of 33,500 feet of canal, the Matrullas Dam with reservoir capacity of 3,000 acre-feet and the Matrullas Road. For the construction of the Matrullas section of the project, a loan of $1,000,000 was made; $387,241.97 were expended in completion of the Guineo section of the project.

The following increases in the system were made in the fiscal year 1936–37:
$1, 027, 481. 92

Acquisition of the Ponce electric system, at the cost of
Additions to the hydroelectric system...

Total for the year.

These additions were as follows:

Extensions to Toro Negro plant No. 1.
Toro Negro hydroelectric plant No. 2.
Carite hydroelectric plant No. 3.

Extensions to the transmission and distribution system.

General equipment. .

Purchase of the Ponce electric plant

Total__

1, 388, 685. 56

2, 416, 167. 48

$374, 552. 82 409, 151. 15 176, 185. 98 412, 236. 12 16, 559. 49

1, 027, 481. 92

2, 416, 167. 48

Of this total, the Federal Government, through the Puerto Rican Reconstruction Administration, made a contribution in the amount of $1,306,861.95.

During the fiscal year 1937-38 the cost of additions to the system amounted to..

And in the last year, 1938-39, extensions aggregated

With these additions, the system of utilization of the water resources covers an investment (excluding depreciation) of

This amount of $6,049,906.29 is distributed as follows:

Toro Negro plant No. 1

Toro Negro plant No. 2.

Carite plant No. 3.

Reservoirs, dams, and waterways.

Transmission plant__

Distribution plant..

General plant_

Other property

Total.

Ponce electric system-

Less depreciation_

Net value.

$94, 887. 18 362, 333. 06

6, 049, 906. 29

$354, 038. 15 149, 673. 72 77, 126. 07 2, 590, 807. 89 927, 948. 50 683, 660. 43 158, 543. 24 16, 116. 46

4, 957, 914. 46 1, 091, 991. 83

6, 049, 906. 29 423, 098. 90

5, 626, 807. 39

Surplus: At the close of operations on June 30, 1939, utilization of the water resources had the following surplus:

Deferred liabilities: Deferred liability in the balance sheet covers the amount of bills under collection pertaining to the Puerto Rico irrigation service.

Depreciation: Depreciation of plant and equipment amounts to $423,098.90, as of June 30, 1939. Computation of depreciation was started in the year 1934 since in accordance with the law depreciation could be recorded only after the project was completed. During the first years depreciation appears under the title of "Replacement reserve" in the liability section of the balance sheet. During the last 3 years it is shown as a deduction from total plant value, in the asset section of the balance sheet. Depreciation is shown in the same place as it appears in the annual reports for the 10 fiscal years.

Under the system of accounts of the Federal Power Commission, adopted by U. W. R. as of July 1, 1939, the reserve for depreciation is again recorded in the liability section of the balance sheets under the title "Depreciation reserve.”

Balance sheet-December 31, 1939

Under the title "Special deposit" account 121, there appears $936,151.79 which is the amount originally paid and deposited with the district court.1

This balance sheet also includes the transfer of the Garzas hydroelectric project by the Puerto Rican Reconstruction Administration to the Insular Government in the amount of $1,408,963.17, which amount increases the capital surplus by that amount.

Government of Puerto Rico, utilization of the water resources-comparative statement of balance sheets for the last 10 fiscal years

1936-37

1937-38

1938-39

300,000.00 2,800.00

400, 000. 00 24, 000.00