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SMITHSONIAN INSTITUTION 518 
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MADE BY BAKER-VAWTER CO.
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October 21, 1921.

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The Smithsonian Institution,
Dr. Charles D. Walcott, Secretary,
Washington, D. C. 

Dear Mr. Walcott:

In the matter of the Estate of Charles L. Freer, deceased, the Executors have completed the administration and are ready to turn over the balance of the assets of the Estate, constituting the residue thereof, to the Smithsonian Institution, the residuary legatee, with the exception of the outstanding obligation of the Estate to the State of Michigan for the unpaid balance of the State Inheritance Tax upon the transfer of the residuary estate. The total State Inheritance Tax was about $435,000. We have paid on account the sum of $200,000. leaving a balance of approximately $235,000. The law of Michigan provides that Inheritance Taxes unpaid after eighteen months from the date of their accrual (which is the date of the death, September 25, 1919) shall bear interest at the rate of 8% from the date of such accrual. Therefore, the unpaid balance of this tax is drawing interest at the rate of 8% from September 25, 1919.

We have handed you a statement of the present condition of the undistributed assets of the Estate, and by this statement you will see that the principal item is 6546 shares of Parke, Davis & Company stock. This stock is of $25. par value and has for years paid regular dividends at the rate of $1. per share per quarter. The stock was appraised in the Estate as of the date of Mr. Freer's death at $114.75 per share. The present market value of the stock is about $80. per share. This market value is influenced largely, in our opinion, by the fact that it is generally known that the Smithsonian Institution is the owner of a large amount of Parke Davis stock; that the Estate still holds a lot of it; that a considerable sum of money is required to be raised by the Executors to pay the State Inheritance Taxes of the Estate; that the probabilities are that the Estate will have to liquidate the Parke Davis stock to pay the indebtedness. All of these things tend to depress the market value and will continue so to depress it until the obligations of the Estate are paid and the threatened forced sales of Parke Davis stock have been removed.

The Executors' attitude, of course, is to pay the indebtedness of the Estate out of any assets in their hands. The Executors have hesitated to force this issue in their desire to save to the Smithsonian Institution the sacrifice in values which would be bound to ensue if forced sales of these assets were made at this time, and have been considering a plan by which such sacrifice might be saved.

We are advised that the legal opinions the Institution has received from its counsel are to the effect that the Smithsonian Institution is not in a position legally to borrow money secured by a pledge of its trust funds of which the residuary estate of Mr. Freer would constitute a part.

This being so, the other alternative which has occurred to us is as follows:

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