The Washington times., 1937-01-26
MOST AGENCIES
CRIPPLED BY
NEWLEV
State Medicine Seen
As Likely Result
OF Situation
EDITORS NOTE:

EDITORS NOTE:
The effects of the depression
haze placed financial foundG-
ttonS of many priDGte charitable
institutions in precGriouS co1ldt-
ton. FeWer beQueStS have
DeGkened the financial under
ptnnings OF such institutions.
Features of the present req
e7tue act relating to inheritance
tdIeS and tares affecting res
tdu1ry legGcieS, the form in
tDhtch most bequeStS are made,
haze created an acute problem
for the continued operation OF
these institutions solely BY prt-
UGte support.
The ultimate imposition of
system of estate medicine to
SupplGnt services notD end1n-
gered by prospects OF lon.Sup-
port has been forecast By local
as nell as national figures in
the fields of finance, pthGn-
thropy and social Serutce.
The tolloWitg is the first OF a
series of four articles dealing
Nth the operation, effects and
results of our revenue lGtDS on
reSiduGry legdcieS affecting prt-
pate charitable institutions.
Charitable organizations, not
ably hospitals, scientific institu-
tions, and colleges whose very ex-
istences depends upon the philan-
thropies of rich and public,spirited
individuals face a serious struggle
for continued services with the
tendency of large estate owners
to cut down on the amount and
number of charitable endowments.
The two basic reasons for this
discontinuance of private bequeStS
have been the effects of the eco
nomic depression and the present
revenue act which exactS heavy
tax toll from the net amounts re-
ceived by charitable institutions
named as residuary legatees in the
wills Of their benefactors.
So ruinous have been the as
sessments on residuary legacy be-
quests that a survey of local bust
ness men, bank officials, hospital
authorities and social agency
heads forecasts but one result--a
decided movement toward the es-
tablishment of State medicine on
a nationwide scale.
Families Put First
While not all charitable be-
quests are made in the form of a
reSiduary legacy, the result of the
depression has been to elevate this
type of gift to the favorite posi-
tion among donors. The reason
for this has been that such do
nors, having experienced the
flicklenesS and uncertainty of eco
nomic success, have become con-
vinced that the welfare Of their
families must come first and the
charities second.
AS a result, bequests are not
as likely to be made as direct be-
quests. Instead, the amount set
aside for charitable organizations
is made to take effect following
the deaths of the donors widow
and children.
During the lives of the latter,
the interest accruing to the char
liable bequest is payable to them,
and the body Of the bequest,
known as the residuary bequest,
comes to the charitable organiza-
ton considerably emaSculated by
huge slices extracted by the tax
requirements on reSiduary lega-
tees.
The recent illustration of the
disposal of the estate of Jesse I.
Straus, former ambassador to
France, whose will originally left
more than $1,000,000 to various
philanthropic institutions, has
been made an example. These be-
quests were revoked, however, in a
codicil, dated July 81, 1884, shortly
after the amendments to the Fed
eral Revenue Act providing for
the indirect taxing of reSiduary
legatees.
Tax Burden Increased
The codicil contained the fol-
lowing statement:
"The present Federal and
State estate tax laws impose
substantially increased tax bur-
denS upon the estates of de-
cedentS, and may, under GER
tain conditions, cause undue
hardShips, financial sacrifice,
and loss resulting from un-
timely sale and liquidation of
assets of estates to provide for
the payment of such taxes.
"The increased estate taxes
upon the estates of decedents
are devoted in large part to gov
ernmental social prog rams.
Under the circumstances now
existing, l deem it advisable to
cancel and revoke the beQuestS
made by me in the paragraph
designated fifth Of my said
last will and testament"
The situation has become so
grave as a result of the ogre-like
tendencies of the revenue act that
a recent report made by the United
Hospital Fund of New York city
just begins to forecast its ramifi-
cations if pushed to include the