Government Shouldn't Take $10 Million of Charity Endowment for Taxes, Says Editor, Dec. 17, 1925

Confiscation Should Not Be Tolerated

Editors, civic organizations and individuals throughout the South have entered protest against the Federal Inheritance Tax which rules that $10,000,000 of the fund left by the late James B. Duke for hospital work in the two Carolinas must be paid to the federal government in taxes. The Charlotte Observer contends that if Congressional action is necessary to prevent the law being complied with, “then by all means such congressional action should be forthcoming.”

The Observer contends that taking candy from a child is mild when compared with the law which would take this money from humanitarian work. “For the Federal Government to take $10 million dollars bequeathed by any philanthropist to an agency devoted exclusively to the alleviation of human suffering or charity,” says The Observer, such as hospitalization work, providing hospital treatment for the thousands of poor people who otherwise could not have it, is not comparable to taking candy from a child—it is far worse than that.”

We have no idea that the framers of the present inheritance law and the men who passed it, ever intended for it to be effective in such cases as this. The law was intended, we are sure, to cover cases in which individuals received huge fortunes through inheritance. Surely the framers of the law and those members of Congress who voted for it did not intend for the government to take money bequeathed for charity.

The inheritance law is bad enough in any light but its defects become more apparent when such cases as this arise. The matter will be taken to Congress and it is hoped that it can be remedied. While Congressmen and Senators from the two Carolinas naturally would fight hardest for a revision of the law, effective last July, members of Congress from other States should be anxious to enter the fight also. Their respective States and districts will not benefit directly from the fund, it is true, but they should be interested enough in humanity to want to see an injustice righted.

From the editorial page of the Concord Daily Tribune, Thursday, Dec.17, 1925. J.B. Sherrill, editor and publisher, and W.M. Sherrill, associate editor

newspapers.digitalnc.org/lccn/sn92073201/1925-12-17/ed-1/seq-4/

FYI, Congress did not grant a special exemption for James B. Duke’s charitable bequest. The Duke Endowment was required to pay the federal inheritance tax—about $10 million—when the estate was settled in 1925–1926. Despite editorials and lobbying efforts arguing that taxing a charitable trust was unjust, the law at the time did not exempt such transfers. The Endowment was created with roughly $40 million, but the federal government collected its share before the funds were distributed to hospitals, orphanages, and schools.