This is an appeal from the determination of a deficiency of $8,604.40 in income and profits taxes for the calendar year 1919. Only that part of the deficiency which results from the difference between the rate of depreciation claimed by the taxpayer and that allowed by the Commissioner is in dispute. The taxpayer contends that, due to abnormal conditions existing, it is entitled to a deduction for depreciation on its machinery, computed at a higher rate than the 5 per cent rate allowed.
FINDINGS OF FACT.
The taxpayer is a Georgia corporation with its principal office at Commerce. It is engaged in the spinning and weaving of cotton goods.
In 1919 the taxpayer had 15,000 spindles and 444 looms in its mill. Under normal conditions the average life of the mill machinery is 20 years but, in order that this average may be attained and in order to produce a good quality of merchandise, it is necessary to employ skilled operators and repair men.
During the World War a number of the taxpayer’s employees entered the military service and others were drawn away to engage in the construction of military camps, several of which were located within a hundred miles of the taxpayer’s place of business.
Due to these and similar causes, the taxpayer lost the services of 80 of its 216 male employees which it had at the beginning of the war, and 9, or over 40 per cent, of its 22 skilled repair men. Tne superintendent of the plant was ill during a great part of the year 1919 and was unable to see that proper repairs to the machinery were made. This loss of employees who were familiar with the operation and care of the various and complicated machines reduced *1201the efficiency of the plant and accelerated the rate of depreciation of the machinery.
The normal weekly operation of the taxpayer’s mills is 60 hours. During the first four months in 1919 the mills were operated 65 hours per week.
A depreciation rate of 7 per cent for the year 1919 represents a fair rate on the machinery used by the taxpayer in its mills.
DECISION.
.The deficiency should be computed in accordance with the foregoing findings of fact. Final determination will be settled on 10 days’ notice, under Eule 50.