Last Thoughts

In 1934 the New Deal upped the scale of estate taxes from a top rate of 45% to a top rate of 60%. Year later it upped them again to their present top of 70%.

These increases have given a sombre cast to the dying thoughts of many a rich man.

One rich woman. Sarah P. Duke, widow of power-tobacco Tycoon Benjamin Duke, evidently was not greatly worried, for her will, probated last week, showed that she still felt able to leave a fat slice of her fortune to Education (see p. 54). The high cost of death taxes last week caused the anxious heirs of the late Harold M.

Lehman, banker nephew of New York's New Deal Governor, to carry to the U. S.

Board of Tax Appeals a levy of $268,000 made against his estate. More unusual was the protest of Jesse Isidor Straus, the New Deal's Ambassador to France, who died fortnight ago.

In August 1935, before the last boost of taxes took effect, Mr. Straus hastily gave away 52,000 shares of stock--about one quarter of his holdings in Manhattan's great Straus department store of R. H.

Macy & Co. The value of these gifts then was some $2,300,000 and the Federal tax on them footed up to about $450,000. Had Storeman Straus kept the stock in question until his death the Federal tax on it would probably have been upwards of three times as much, without making allowance for the fact that Macy stock has increased over 10% in value during the past year.* Last week when the terms of Jesse Straus's will were made known, it was seen that he had given troubled thought to estate taxes. His will, dated May 9, 1933, when the New Deal was only two months old, left 17,100 shares of Macy stock (worth today $855,000) to 18 philanthropic and educational institutions. Beneficiaries included the Federation for the Support of Jewish Philanthropic Societies of New York (6,700 shares); Harvard University (3,300); Manhattan's Presbyterian Hospital (1,700); Catholic Chari- ties of the Archdiocese of New York (700); Tuskegee Institute (200); New York Fire Department Relief Fund (200); Metropolitan Museum of Art (200).

On July 31, 1934. some 15 months later, when the first New Deal tax increase had been made. Ambassador Straus wrote a codicil to his will in which he withdrew these benefactions in these words: "The present Federal and State estate tax laws impose substantially increased tax burdens upon the estates of decedents and may under certain conditions cause undue hard ship and financial sacrifice and loss result ing from untimely sale and liquidation of assets of estates to provide for the pay ment of such taxes. The increased estate taxes upon the estates of decedents are devoted in large part to Governmental so cial programs. Under the circumstances now existing, I deem it advisable to cancel and revoke the bequests made by me . . .

in my said last will and testament."

*The Federal tax varies with the size of the net estate. Mr. Straus held, after the gifts mentioned, 146,000 shares of Macy stock, currently valued at about $50 a share or $7,300,000. The lowest tax on any part of a net estate over $7,000,000 is 61%.

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