The Augusta Courier Editorial December 12, 1955

STRICTLY PERSONAL

By ROY V. HARRIS

To Senators:
Walter F. George
Richard B. Russell

To Congressmen:
Prince H. Preston
J. L. Pilcher
E. L. Forrester
John J. Flint, Jr.
James C. Davis
Carl Vinson
Henderson Lanham
Iris Blitch
Phil M. Landrum
Paul Brown

The Augusta Courier has proved beyond any doubt that the Ford Foundation and its subsidiaries have contributed three hundred and ninety thousand dollars to the Southern Regional Council to fight segregation in Georgia.

Not only have we proved this beyond any doubt, but our charges have never even been denied.

We have also proved beyond any doubt that the Ford Foundation has given the NAACP fifty thousand dollars with which to fight segregation.

In addition, we have proved that the Director of the Southern Regional Council is an ex-official of the communist-front Southern Conference for Human Welfare, that twenty-four members of the Board of Directors of the Southern Conference for Human Welfare are now Directors of the Southern Regional Council and that at least thirty-eight officers, members of the Executive Committee or members of the Southern Regional Council's Board of Directors have known records of association with various organizations which have been cited as communist-fronts by either the Attorney General of the United States or the House Committee Investigating Un-American Activities.

We have documented for your information the fact that the Ford Foundation has given to the Fund for the Republic fifteen million dollars which is being spent, as charged by the National Commander of the American Legion, in an effort to persuade the American people that:

1. Communism is not and has never been a serious threat to the United States.

2. Forces fighting communism are the real danger and threaten the civil liberties of the American people.

3. Security measures to keep communists out of government are being used to persecute and harass innocent people.

4. To show that most of us are ignoramuses being misled by evil demagogues.

We have documented for you, item by item, numerous accounts of appropriations that the Ford Foundation has made for the purpose of carrying on propaganda for such ideas as the following.

1. A committee of Congress has lambasted the Foreign Policy Association financed by the Ford Foundation. The research director is a communist sympathizer who cooperated with red agents who set up the (Continued on page 2)

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"Congress of American Women", and whose activities have been denounced by the House Committee on Un-American Activities.

2. The Foundation has given over a half million dollars to the Institute of Philosophical Research. This organization is headed by Professor Mortimer Adler. The Cleveland Plain Dealer on October 29, 1945, quoted this professor as saying, "We must do everything we can to abolish the United States."

3. The Ford Foundation has set aside three and a half million dollars for its "Behavioral Sciences" division which is encouraging and trying to rationalize marriages between Negroes and white people.

We cite these as a simple illustration of the propaganda purposes for which the Ford Foundation money is being used.

We could cite more of them and cite them all day. But you are familiar with these which we have set out in detail for your benefit over the past few months.

You are also familiar with the fact that the Carnegie Foundation brought Gunnar Myrdal to this country and financed him in the production of a book, "An American Dilemma", which was used by the United States Supreme Court as a basis for overthrowing the law of the land and substituting this Swedish socialist's views in place of the law of this country.

All of this leads us to believe that the time has come when the Congress must put some restriction on the purposes for which foundations can be permitted to spend money as a condition precedent to their being granted tax exemption under the revenue laws of this country.

It is doubtful in my mind if any foundation should be tax exempt. Why should I be taxed, and my neighbors and friends taxed, by the federal government to the point to where it is back-breaking when others are permitted to go tax free?

To show you the injustice of it, let me cite a few instances. If I were able to contribute money to one of the foundations, I could take the contribution as a tax deduction and escape paying federal tax on the donation. Likewise, the foundation, under the present law, is tax exempt and pays no income taxes.

But, suppose I have some friend or relative who is badly in need of an operation to save his life. Suppose I agree to pay five hundred or a thousand dollars for the hospital and doctor bills. If I should do that, I get no tax credit and then must dig up the tax on the money so contributed.

Suppose one of us should happen to have an aged father or mother with no means of support and we undertook to contribute to their support, we would have to pay tax right on.

Suppose one of our relatives needed a serious operation to save his life and we paid the bill, we would still have no tax exemption.

Suppose I meet some poor devil on the street who is hungry, who is sick and who is about to die for the lack of medical attention. Suppose I decide to do something about it and to spend a few hundred dollars in his behalf. If I do, I have got to dig up about thirty-five cents for every dollar I spend and pay it to the government as tax on my charity.

But, if I contribute to the Ford Foundation or the Carnegie, or some other foundation, then I get tax exemption.

We are developing so many tax free agencies now until private business and individuals are being saddled with an unbearable burden of tax-paying.

Take the Ford Foundation as an illustration. The Fords took money

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which would ordinarily have gone to the federal government in taxes and gave it to the Ford Foundation. The Ford Foundation today is valued at five hundred million dollars. The rest of us have to make up that five hundred million dollars and pay what they should have paid.

This five hundred million dollars is represented by stock in the Ford Motor Company. The foundation has been receiving an average of thirty million dollars a year in dividends from the Ford Motor Company. They pay no income tax on this thirty million although the foundation is in business and in competition with every other business.

But I may be wrong in my thinking and it may be necessary that we have these tax exempt foundations. It may be right to let them go into the market and buy stocks and bonds in competition with any and everybody else and take the dividends and spend them as they see fit without paying taxes to anybody.

You might be able to argue with me on that point. But there is one point that you cannot argue. These people should not be permitted to create foundations and the foundations permitted to get into business in competition with me, and you and everybody else tax free and then spend their money for propaganda purposes.

I say that is wrong regardless of what the propaganda might be.

There is only one answer to the situation. The Congress should limit the purposes for which foundations and such so-called "charitable organizations" can spend their money in order to secure tax exemption.

I say that the purposes should be limited to gifts or grants to colleges and universities for new buildings, equipment, maintenance, research, teaching and scholarships for students; and to hospitals, churches, schools, orphans homes, homes for the aged, for buildings, equipment and maintenance and to organizations whose entire funds are spent for the benefit of the needy and the underprivileged.

Now, in this statement, I may have overlooked some other worthwhile project, but I believe that this general statement will cover all the purposes for which foundations should be permitted to spend their money as a condition precedent to their securing a tax exempt status.

There are over six thousand of these foundations in the United States today and no one has yet been able to determine the exact value of the capital assets held by these foundations.

The Reece Committee of the House undertook to do so and it was never able to get accurate figures.

We do know, as a result of their investigation and the investigation of others, that the value of the total capitalizations runs high into the billions.

Their capitalizations increase from year to year. They do not spend all of their income and the amount of capital investment is growing by leaps and bounds every year. Not only are they growing by leaps and bounds, but more foundations are being created every year. Many of them are being set up by comparatively small people from a financial standpoint. The capital of these foundations is usually invested back in the original donor's business and they are able to secure financing from tax exempt money and to escape the payment of taxes in so doing.

You may ask the question: Why should the Congress concern itself with the regulation of these foundations? In my opinion, the Reece Committee aptly stated the question on Page 4 of its report to the Second Session of the 83rd Congress, known as House Report Number 2681, when it said:

"With an occasional but rare exception, foundations are created under state law. Their activities are, therefore, under state control, for the most part. The Federal government acquires its immediate interest through the tax laws. It has never sought directly to regulate foundations, deeming this to be the province of the respective states in which the foundations are created and operate. But the Federal government extends to foundations certain exemptions from Federal taxation. Their income is exempt from Federal income tax; contributions to them are free tax and estate tax; and the donor is permitted a deduction for income tax purposes to the extent of twenty percent of the income of an individual donor and"

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...five percent of that of a corporate donor. These exemptions are acts of grace by the Federal government. In so far as they relieve foundations and their creators and supporters from taxation, they impose a greater tax burden upon the generality of the people of the country. Thus the Federal government permits the equivalent of public money to be used by these foundations. Accordingly, it is justified in applying certain restrictions on the right to the various exemptions granted to foundations.

The theory behind such restrictions is simply that, as exemptions are acts of grace, the government may clearly impose such conditions on the exemptions as may be calculated to prevent abuse of the privilege and to prevent the use of the exempted funds against the public interest.

There are several reasons why this limitation is fair and right:

1. Individuals are not permitted to spend their money as they see fit and take tax deductions for it. There is no reason why corporations, trusts or foundations should be treated any differently from that of individuals.

2. It is wrong for the federal government to allow any individual or group of individuals to take money which belongs to the government and create a trust, or foundation, with it and spend the money as they see fit and especially for propaganda purposes.

3. There are too many tax free enterprises in this country today. The government is expanding its business enterprises everywhere. The states and cities are doing likewise. Then we are allowing co-ops, and so-called 'foundations' to go tax free. Their number is growing by leaps and bounds and unless we change our policy the wealth of the nation will be in the hands of tax-dodging agencies, trusts and foundations before we know it.

We should never forget that when a man dies his property is divided between his heirs and between the state and federal government. His fortune is broken up.

But with these foundations and trusts it doesn't make any difference how many people die, they are never broken up. They go on and on and they keep getting bigger and bigger.

As they get bigger and bigger and own more of the wealth of the nation, the individuals get poorer and poorer and own less of the wealth of the nation.

All of you know history and know that at one time in some of the old European countries the church gradually got control of all of the land which was the wealth in that day.

Unless we stop the present-day trend, the government and tax exempt organizations will soon own the wealth of America.

When this happens, we will see a socialist state and the individual reduced to a state of slavery.

Our forefathers braved the Atlantic Ocean in rickety boats to escape this kind of condition and to find a new land where the individual had an opportunity to do something for himself.

We are now headed down the road that all of the old countries followed and as the rolling stone gathers momentum, we are being rapidly catapulted into a life, the kind of which our forefathers sought to escape.

It is nothing but right and fair that this be done.

Consequently, I am writing this open letter to the members of the Congress from Georgia to urge you to lead the movement in Congress to restrict the operations of these foundations and trusts or else deny them tax exemption.

Tax exemption is a special privilege. It is a privilege for individuals to take money which belongs to the federal government and spend it for their own purposes.

If they are to be permitted to divert tax money from the federal treasury into a foundation of their own creation, then the government should have some say-so as to how the money is spent.