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''mine or other natural deposit" within the meaning

of the Internal Revenue Code.

1. That in the event this Court rules in the nega-

tive on this proposition, the tailings deposit in ques-

tion in any event constituted a depletable deposit of

partially processed ores within the rule enunciated

and applied in the Kennedy and New Idria cases,

supra, and that Small Leasing Company had a de-

pletable economic interest therein.

1. That the depletion allowance upon gross income

from the reworking of this tailings deposit must be

apportioned between the lessee and the lessors in

proportion to their respective economic interests in

said deposit, that is to say, in proportion to their

respective shares of the gross income from the

operation.

We therefore respectfully submit that the judgments

for the defendant below should be reversed.

Dated, San Francisco, California,

July 9, 1952.

Arthur H. Kent,

Charles E. Horning,

Attorneys for Appellants.

(Appendix Follows.)

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