New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-02-22
Gifts to Rockefeller
Foundation Not Ex-
empt, State Holds.
SAYS 1T ACTS AS
TRUST COMPANY
Controller Appeals in APP
praisal of Estate Of
Oil Kings Wife.

Lafayette Il. Gleason. attorney Tor
State Controller Travis, filed in the
Surrogate's Court yesterday an appeal
from the transfer tax appraisal OF the
estate Of Mrs. Laura s. Rockefeller
wife Of John d. Rockefeller, in when
the state will attack the status OF the
Rockefeller Foundation as charitable
institution under the meaning OF the
Law. Mrs. Rockefeller left S1,49O,3'l.
II is the contention Of Controller
Travis that bequests' 10 the foundation
should not be exempted from the pay
ment Of transfer taX, as bequests 10
charitable institutions are exempted
because it is within the powers OF the
trustees Of the foundation to use sucn
funds for other than charitable pur-
poses.
II is also contended that the Rocke-
feller Foundation, which was estao-
lished By the Oil King with gift oil
500. 900 900. is exercising the functions
of q trust company. II is believed thst
the institution will some day receive
larger share Of the fortune OF It's
founder. II this is bequeathcd by VIII
II will have to pay the state large
transfer tax if the contention Of the
Controller is upheld.
A letter written by Starr j. Murphy
of the Rockefeller counsel, - 70 be
used in en- eudeevor to prove that
trusts in perpetuity are established IN
gifts. an act contrary 10 the law, ss
such trusts arc valid only for two lives
in being.
Residue Of Estate at Issue.
The point Of issue now is the $685.
593 left by Mrs. Rockefeller to the
foundation. This constitutes the resi-
due Of her estate, and was exempted
from taxation by Appraiser Spencer
From this ruling Mr.. Gleason yester-
day filed his appeal, which. will open
the broader question u the standing
Of the gres, phiiantnropic institution
SCHUYLER {. Carlton, IN charge OF
tho matter fcr Mr.. Gleason. contends
that tho foundation is a benevolent, ed
ucational and investment corporation
The argument that the foundation IS
used as a trust company is based on
the donation OF S4s,0oO by Mrs. KocNe-
fellcr while alive. It was sent through
Starr J. Murphy, with the following
letter:
"At the request OF Mrs. Laura ,.
po,kefeller. ! herewith hand you ten
Colorado Industrial Company five per
cent convertible bonds, due 1884, the
income to be paid as it accrues TO the
Baptist Home Mission Society OF the
civ Of New York, so long as IN the
Indictment of the foundation 1t is wise
so TO dc.
The foundation is to have the power
- ;ts discretion 20 sell the bonds ana
,einvcst the proceeds and to change
tho investment from time to time as u
deems wise, but the bonds ana thelr
nroceeds shall be kept upon its DOCKS
az separate fund.
Trust Company Substituted.
There was also separate gift III
,rust Of ten bonds by Mrs. Rockefeller
70 the Baptist Home Mission society.
These were placed in trust with the
Fouitable Trust Company. Subsequent
" Mrs. Rockefeller substituted the
Rockefeller Foundation for the trust
companv as trustee for these bonds
and MIR. Murphy, with the authorization
of the Baptist society. had the trust
fund transferred from the tqr.ta1l
Trust Company to the RockefeIier
Foundation as trustee, which is given
as further proof OF the trust company
character OF the foundation.
The state contends that II person
contributing 70 the foundation directs
the use OF the principal or income OF a
certain fund. there is nothing to pre-
vent. il such bequests are TO be e1-
empted. the turning Of large estates
over to an institution like the tounda-
ton. In such case the fund might
finally be distributed among indiyid-
uals or such other institutions that
would not be entitled 10 exemption un-
der the law.