As projections of past rather than predictions of future, Professor Livingstone's figures on future plant expenditures and resulting deferred tax accumulations are not unreasonable. If industry continues to grow at past rates and if tax laws remain unchanged, one would expect amount of deferred federal income taxes to continue to grow in future. In fact, when present accelerated depreciation provisions of Section 167 of Internal Revenue Code were being considered by Congress in summer of 1954, Bob Eisner, who is currently head of Economics Department of Northwestern University, and I made some projections for Commonwealth Edison Company which indicated that this would be true for us. Of course, there is no assurance that plant investment will continue to grow indefinitely. There isalways possibility that little black box which can fit in your basement and produce electricity from methane, ethane, propane, butane, or uranium will be perfected some day and give us a real problem in this respect. Nevertheless, recognizing Livingstone's figures as a simple extrapolation of past, I have little quarrel with his view that by and large deferred taxes may grow indefinitely in future in electric utility business. However, I have considerable trouble with Livingstone's principal conclusion that the reporting of a liability for deferred taxes arising from sum-of-the-years-digits depreciation lacks empirical justification... burden of justification resting on those who claim that a liability exists in a particular case. This is a non sequitur. The mere indication of indefinitely continued future growth does not mean that a particular liability should not be recorded. In a growing, going concern, like Commonwealth Edison Company, one would expect accounts payable (for exam-