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SMITHSONIAN INSTITUTION 520 
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MADE BY BAKER-VAWTER CO.
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SMITHSONIAN INSTITUTION
WASHINGTON

November 2, 1921.

Dear Judge Gray:

At a recent meeting of the Executors of the Estate of Charles L. Freer, held in Washington, October 21, 1921, the question came up of how, in view of the unpaid Michigan inheritance tax, the estate could be settled and the residual estate be turned over to the Smithsonian Institution.

It appeared that if the Executors sold a sufficient amount of Parke Davis & Company stock it would be necessary to make a large sacrifice and also depreciate the stock in the market. After full consideration, the Executors worked out a scheme as per enclosed copy of letter addressed to the Smithsonian Institution. ^[[(P.518)]]

The next step in the solution of the difficulty was to ascertain if the Probate Judge in Detroit would issue an order authorizing the Executors to borrow the money on their note, putting up as collateral a sufficient amount of Parke Davis & Company stock. This morning I received a telegram from Mr. Charles P. Spicer, Vice President of the Detroit Trust Company, as follows:

Probate Judge this morning has advised me that he not only will issue order on petition of executors to borrow necessary funds pledging stock as collateral under plan as tentatively agreed in Washington between the bank and ourselves, but he recommends it as most advisable course. Hope therefore you can secure authority Smithsonian to proceed.

The next step is to ascertain whether the Smithsonian Institution will accept the residual estate with the obligation of the note, the same being secured by collateral represented by the Parke Davis & Company stock of which the Executors now have over 6,000 shares, having turned over 10,000 shares to the Smithsonian Institution.

The American Security & Trust Company of Washington is willing to take the note from the Trust Company in Detroit provided that when the Executors transfer the note the Smithsonian Institution will free the Executors from responsibility and assume the responsibility for the payment of the note.

The Smithsonian would have back of the note about 16,000 shares of Parke Davis & Company stock, which at present market price is worth about $1,280,000. The note will probably be for $165,000 to $175,000. The income from the Parke Davis & Company stock will in all probability be $80,000 a year, as the company has gone through the great business depression of the past two years and kept up its earnings at the rate of over 5 per cent on market value or 20 per cent on the face value of the face value of the stock at $25 per share.

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