Section 214 (a) (7) of the Revenue Act of 1918 provides that, in computing net income, there shall be allowed as deductions- — ■
Debts ascertained to be worthless and charged off within the taxable year.
In this case the requirement that the debt be charged off within the taxable year was satisfied, and the only question involved in this appeal is whether or not the Eureka Coal Co. was justified in reaching the conclusion that the debt of the Century Coal Co. was worthless.
*357The early part of the year 1920 was a season of unusual strength and activity in the coal trade! Prices were high and the demand active. This situation suddenly changed in the latter part of the year. There was an unusual and wholly unexpected slump in the selling price of coal. This threw the trade into a state of uncertainty and confusion. Many who had purchased at high prices and then saw the same grades of fuel offered at lower prices slowed up in their payments. Brokers and dealers were wholly unprepared for this situation and were for a time unable to meet their obligations. The experience of the taxpayers was the same as that of many other persons and firms engaged in the same line of business, and, while it no doubt appeared to the taxpayers in December, 1920, that the collection of the account here under consideration was uncertain, we are of the opinion that they should not have caused this account to be written off as worthless without having acquired some more definite knowledge of their debtor’s business situation than the record shows their inquiries developed. It appears that the condition of their débtor was not different from the condition of many others in the same trade and that within a few months, when trade conditions had become adjusted to the now situation, the debtor was able to and did pay.
In view of the situation here presented we are of the opinion that the debt of the Century Coal Co. was not ascertained to be worthless in 1920 within the meaning of section 214 (a) (7) of the .Revenue Act of 1918.