Appeal of Hampton Cotton Mills

*443OPINION.

The evidence affirmatively shows that the depreciation deducted by the taxpayer in the years prior to 1917 was inadequate and that the amount allowed by the Commissioner within that period represented a reasonable deduction. The witnesses for the taxpayer gave the machinery a life of 40 years and such allowance is applicable also to the buildings. We think the rate of 2y2 per cent prior to 1917 should stand.

It is agreed by the parties that the depreciation on machinery subsequent to 1916 was three times greater than in the prior years and the evidence shows that the depreciation on the buildings was 50 per cent greater. The machinery constitutes something less than 80 per cent of the depreciable property and upon the basis of the agreement as to the amount of depreciation which was sustained subsequent to 1916, and the evidence with relation to the additional depreciation of the buildings, we are of opinion that a composite *444rate of 6y2 per cent constitutes a reasonable allowance for the wear and. tear sustained during the year in question. The tax should therefore be recomputed, using a composite rate of 2% per cent prior to 1917 and a composite rate of 6% per cent subsequent to that time.