*103 Decisions will be entered for the respondent.
Held, the Foundation for World Government was not organized and operated exclusively for educational purposes within the meaning of sections 23 (o) (2) and 1004 (a) (2) (B) of the Internal Revenue Code of 1939; accordingly, the gifts in controversy are not deductible in computing income or gift taxes.
*1195 The Commissioner determined that there were deficiencies in taxes due from Anita McCormick Blaine as follows:
| Tax | Year | Amount |
| Gift tax | 1948 | $ 369,961.37 |
| Income tax | 1948 | 162,954.24 |
| Gift tax | 1949 | 33,498.33 |
| Gift tax | 1950 | 5,260.56 |
The sole issue is whether gifts made by Anita McCormick Blaine in 1948 to a trust known as the "Foundation for World Government" are deductible under the provisions of sections 23 (o) (2) and 1004 (a) (2) (B) of the Internal Revenue Code of 1939 as contributions to an "educational" organization. The gift tax deficiencies for 1949 and 1950 depend entirely upon the correctness of the gift tax deficiency for 1948, since the 1949 and 1950 gifts fall into higher*104 brackets if the 1948 deficiency is sustained; otherwise, the 1949 and 1950 deficiencies are not in issue.
FINDINGS OF FACT.
Some of the facts have been stipulated and are so found. The stipulation and exhibits annexed thereto are incorporated herein by reference.
Anita McCormick Blaine, hereinafter sometimes referred to as Mrs. Blaine, was a resident of Chicago, Illinois. The tax returns here involved were filed with the collector of internal revenue for the first district of Illinois.
In June 1948, a meeting (hereinafter also referred to as the Pocono Conference) of leading world federalists (persons who advocated *1196 the formation of a world government on the federal system) was held at Pocono Pines, Pennsylvania. Stringfellow Barr was instrumental in the organization of the conference and Mrs. Blaine furnished funds which were necessary to hold the meeting and pay the expenses of the persons invited to attend. Barr became chairman of the conference. The purpose of the Pocono Conference was to formulate plans to activate, in the United States, a movement for popular support of world government, known as the People's Convention. The theory of People's Convention was *105 that the creation of world government could be accomplished most expeditiously by mass agitation for worldwide election of delegates to an assembly which would write and adopt a world constitution for presentation for ratification to the national governments of the world.
Barr, at the conclusion of the Pocono Conference, was appointed chairman of the Continuing Committee organized to advance the program supported by the conference. In a "Final Report on the Pocono Conference," he wrote as follows:
Mr. Wofford, Mr. Usborne, and I discussed with Mrs. Blaine the results of the Conference. Mr. Wofford and Mr. Usborne became convinced that, if I would defer returning to college teaching and would assume responsibility for organizing the Campaign for a People's Convention, Mrs. Blaine would consider the effort worth backing. I finally decided to do so, provided Mrs. Blaine was willing and able to supply the initial million of the fund which such an effort would involve. * * *
* * * *
Mrs. Blaine had decided to place at my disposal a million dollars to advance the project, and steps were taken to set up a board of trustees for the fund. * * *
On August 3, 1948, Anita McCormick Blaine, *106 as donor, established a trust, to be known as the Foundation for World Government, by agreement with Stringfellow Barr, Scott Buchanan, Harris Wofford, Jr., and Anita McCormick Blaine, as individual trustees, and the Fiduciary Trust Company of New York, as corporate trustee. The trust agreement provided in part as follows:
WHEREAS, world peace and human progress depend upon the establishment of a world government representing all mankind; and
WHEREAS, this goal can only be achieved if, through a moral and educational regeneration, people everywhere desire a new and higher level of world citizenship; and
WHEREAS, this popular support must be developed, in time to prevent war, by means of a vast public educational campaign in the principles of world government; and
WHEREAS, it is the desire of the Donor to establish a fund to further these purposes, which fund shall be used exclusively for educational, religious, charitable, scientific or literary purposes;
* * * *
*1197 ARTICLE III.
The trustees shall apply the whole or any part of any income from or principal of the fund to such educational, charitable, scientific, literary or religious purposes as the individual trustees*107 shall from time to time in their absolute and uncontrolled discretion determine; provided, however, that no part of the fund shall ever be used for the personal pecuniary profit or gain of any individual or organization, except as otherwise hereinafter expressly provided, or to carry on propaganda or otherwise attempt to influence legislation, it being the intent of the parties hereto that such funds shall be used particularly to educate the public to understand what it would mean to each individual's freedom, security and prosperity and to the cause of peace to accomplish the purposes set forth in the WHEREAS clauses hereof.
ARTICLE IV.
Since the imperative task for which the fund is established is to spread the movement for world unity as rapidly as possible, the Donor hereby instructs the individual trustees to utilize the fund as promptly as shall, in their sole discretion, be compatible with the achievement of the purposes set forth in the WHEREAS clauses hereof, and further instructs, and the individual trustees hereby agree, that the fund shall be entirely liquidated and expended not later than December 31, 1958; provided, however, that the individual trustees by unanimous*108 action taken at any time prior to said date may extend the time of complete liquidation and expenditure for a further period not to exceed ten (10) years from said date.
On August 9, 1948, Mrs. Blaine transferred to the Foundation for World Government (hereinafter referred to as the Foundation) 33,334 shares of common stock of International Harvester Company, which had a fair market value on that date of $ 972,936.13; on November 11, 1948, she made a further transfer to the trust of $ 70,439.70 in cash, in order to fulfill the commitment, which she had made to Barr, to donate one million dollars to the Foundation. 2 These were the only contributions made by anyone to the Foundation.
The original trustees of the Foundation were Stringfellow Barr, *109 Harris Wofford, Jr., Scott Buchanan, and Mrs. Blaine. At times subsequent to the organization of the Foundation, Robert M. Hutchins, John O. Neustadt, and William Kyle Smith also were elected and served as trustees of the Foundation.
Stringfellow Barr, who has been president of the board of trustees of the Foundation since its organization in 1948, was a Rhodes Scholar at Oxford University from 1919 to 1921. He also attended Tulane University, the University of Virginia, the University of Ghent in Belgium, and the University of Paris. He has taught at the University of Virginia and the University of Chicago, and from 1937 to *1198 1946 was president of St. John's College at Annapolis, Maryland. He has been very active in world government organizations, participating in various capacities and associating himself with groups which represented the "maximalist" school of federalists, i.e., groups which advocated strong powers in the central government of the contemplated world organization. Barr was instrumental in the organization of the Pocono Pines conference, which resulted in the establishing of the Foundation and the gifts thereto by Mrs. Blaine.
Scott Buchanan had a background*110 which was largely academic, having taught at Amherst College, Harvard University, College of the City of New York, and the University of Chicago. He also served, from 1937 to 1947, as dean of St. John's College in Annapolis, Maryland. He had not been active in world government organizations prior to his association with the Foundation.
Harris Wofford, Jr., was a student at the University of Chicago when he became a trustee of the Foundation. He had been associated with the movement for world government prior to that time. While in high school, he founded and became the first president of Student Federalists. He was also a member of United World Federalists, an associate editor of "Common Cause," a federalist publication, a council member of the World Movement for World Federal Government, and served in various capacities with other like groups.
Robert M. Hutchins served as president of the University of Chicago from 1929 to 1945 and chancellor of that university from 1945 to 1951. He was an ardent supporter of world government and a contributor of articles to world government publications.
John O. Neustadt was elected as trustee of the Foundation on April 28, 1950, at which *111 time he was a medical student at Johns Hopkins University. He had previously served as acting dean of St. John's College. William Kyle Smith, elected as trustee on the same date, had taught at the University of Virginia and been a tutor and assistant dean at St. John's College.
Clifford Dancer was named executive director of the Foundation. He was also a member of other federalist organizations.
After the Foundation was established by Mrs. Blaine in August 1948, the first six meetings of its board of trustees -- extending to December 1949 -- were held in her home in Chicago. Thereafter, due to the failure of her health, the board of trustees met at other places convenient to its membership.
At an early meeting of the board of trustees, they established the following staff with the salaries as indicated, some of which represent part-time activity: *1199
| Stringfellow Barr | $ 15,000 |
| James S. Martin | 12,000 |
| Clifford Dancer | 7,000 |
| Harris Wofford | 5,000 |
| Stephen Benedict | 3,000 |
| Ruthmary Lewis | 3,015 |
| Scott Buchanan | 7,800 |
The Foundation first established temporary offices in the office of the Emergency Committee of Atomic Scientists on Madison Avenue in New York City. *112 This group had "heartily endorsed" the Crusade for a People's Convention. Later in 1948, the Foundation established its own office at 58 Park Avenue, New York City. When Barr returned to teaching at the University of Virginia in September 1951, the offices were moved to Charlottesville, Virginia.
Most of the early grants made by the Foundation were made to organizations which were strongly advocating world government, namely, those to the Crusade for World Government, to the Centre International de Recherche et d'Expression Mondialiste, to the World Movement for World Federal Government, to World Republic, and to World Student Federalists. However, the grants made by the Foundation over the entire period from August 3, 1948, through June 30, 1952, may generally be classified in three groups: (1) Those to organizations and individual leaders in the field of world government; (2) those to institutions and individuals studying the political and theoretical problems of world government; and (3) those to institutions and individuals studying problems of world economic development.
During the period from August 3, 1948, through June 30, 1952, the Foundation made disbursements of grants*113 in the total amount of $ 422,788.37 to the following organizations and individuals:
| a. | World Movement for World Federal Government | 3 $ 23,110.00 |
| b. | World Student Federalists | 7,000.00 |
| c. | Crusade for World Government | 50,000.00 |
| d. | Centre International de Recherche et d'Expression | |
| Mondialiste | 62,300.00 | |
| e. | World Republic | 8,000.00 |
| f. | Lord John Boyd-Orr | 5,000.00 |
| g. | Abbe Groues Pierre | 867.56 |
| h. | Garry Davis | 500.00 |
| i. | Educational Fund, Inc., University of Chicago | 35,000.00 |
| j. | Committee to Frame a World Constitution | 15,000.00 |
| k. | Grenville Clark | 5,000.00 |
| l. | F. Palmer Weber | 15,000.00 |
| m. | Henry Collins, Jr | 3,500.00 |
| n. | Rexford G. Tugwell | $ 3,503.46 |
| o. | Fritz Sternberg | 10,808.86 |
| p. | James R. Newman | 20,600.00 |
| q. | Max Werner | 13,125.00 |
| r. | American Friends Service Committee | 13,000.00 |
| s. | Frederick Schuman | 5,000.00 |
| t. | Thomas R. Amlie | 500.00 |
| u. | Harris L. Wofford, Jr | 7,121.41 |
| v. | Public Affairs Institute | 39,900.00 |
| w. | Basil Davidson | 5,605.00 |
| x. | James S. Martin | 12,000.00 |
| y. | Roland W. Boyden | 5,059.50 |
| z. | Hermann Herrey | 5,000.00 |
| aa. | Israel Settlement Study Project | 30,497.58 |
| bb. | Community Development Projects, Ltd | 2,540.00 |
| cc. | Massachusetts Institute of Technology for Helen Boyden Lamb | |
| project | 8,250.00 | |
| dd. | University of Chicago for printing "Let's Join the Human | |
| Race" | 2,000.00 | |
| ee. | Union for Democratic Action Educational Fund, Inc | 1,000.00 |
| ff. | International Development Placement Association, Inc | 1,000.00 |
| gg. | Robert Sarrazac (Consultant's Fee) | 2,500.00 |
| hh. | Johanne Allemond-Martin (Consultant's Fee) | 2,500.00 |
| ii. | Rammanohar Lohia (Consultant's Fee) | 1,000.00 |
*1200 Grants in Category (1).
(a) World Movement for World Federal Government. This organization was an international federalist liaison organization formed for the following declared purposes:
a) to work for the creation of world federal government in order to achieve world peace;
b) to unite all organizations which seek the creation of a world federal government having a defined sphere of jurisdiction limited to world affairs, functioning through a legislature to make world law, a judiciary to interpret it and an executive with adequate powers to enforce it upon individuals.
The grants totaling $ 23,160 to this organization were made to support its general activities and to finance its annual meetings in Luxembourg and Stockholm in 1948 and 1949. Clifford Dancer, of the Foundation staff, was assigned to work with the group planning the*115 Stockholm meeting.
(b) World Student Federalists. This organization was the youth section of the World Movement for World Federal Government, and its purpose as stated in its charter was as follows:
Article 2. The object of this division is to facilitate the purposes of the World Movement for World Federal Government, as stated in its Statutes, and more specifically:
a) To stimulate thinking among youth of the world on the urgent need for a world federal government.
b) To mobilize and to unite youth on a world level in support of steps leading to world federal government.
*1201 Two grants totaling $ 7,000, made in 1948 and 1950, were used to defray the general administrative expenses of the organization.
(c) Crusade for World Government. This was an organization, largely sponsored by members of the British Parliament, which vigorously campaigned for world government advocating the device of the People's Convention to achieve that end. It was one of the purposes of this group to have the world constitution formulated by the People's Convention ratified by the national governments of the world. The grant, made in 1948, was intended to eliminate a deficit in the*116 organization's budget for 1948.
(d) Centre International de Recherche et d'Expression Mondialiste. This was one of the leading world government groups in France. Its charter stated in part as follows:
Article I -- The signing members have formed a Civil Research Association having the purpose of finding methods and techniques likely to promote world citizenship, sovereignty and world institutions, in the direction of a world confederation, the detecting, information and education of groups of world citizens.
Research on the methods and techniques to create a public opinion in the world prepared to face these problems.
The organization of scientific investigation and the publication of documents related to this research.
This group actively sponsored the People's Convention, an international registry of world citizens, the publishing of material for the Crusade for World Government, and the publication of a paper, People du Monde. The grant was made in 1949 to support the organization's general activities.
(e) World Republic. The grant to this group was made in 1949 to enable it to design a program by means of which the People's Convention device could be made*117 effective in the State of Illinois.
(f) Lord John Boyd-Orr. The grant given to Lord Boyd-Orr in 1950 was to enable him to travel outside the sterling area in connection with his work for world government. He had been head of the Food and Agricultural Organization of the United Nations, was a Nobel Peace Prize winner, and was an outstanding proponent of world government.
(g) Abbe Groues Pierre. Abbe Groues Pierre was president of the executive council of the World Movement for World Federal Government and a member of the National Assembly of France. The grant was given him in 1948 to enable him to make a trip to the United States in 1948 in order to discuss world government with federalist leaders in this country.
(h) Garry Davis. Garry Davis was a federalist who had renounced his American citizenship and declared himself to be a "citizen of the world." Davis took this step to dramatize the world federalist cause. In his subsequent crusade in behalf of this cause he wore himself out physically and needed a rest. The Foundation *1202 granted him support money to enable him to take this needed vacation from his work and at the same time study the works of Tolstoy*118 and Gandhi.
Grants in Category (2).
(i) and (j). Educational Fund, Inc., University of Chicago. The grants in 1948 and 1949 to this organization were used to finance studies of problems of a world constitution by the Committee to Frame a World Constitution. The money was used to help publish "Common Cause," a journal devoted to this problem. The Committee was located on the campus of the University of Chicago in a building provided by the university, although it was not an official activity of the university. "Common Cause" was a monthly magazine, the purpose of which was to clarify the theory and philosophy of world federalism; to promote critical discussions of the Committee's preliminary draft of a world constitution; to discuss and analyze current world political trends; to promote discussion and study of the possibilities of convoking a world constituent assembly to review and discuss new national institutions, and to review and discuss books having a bearing on world politics, world community, and world government.
(k) Grenville Clark. The grant was made in 1950 to Mr. Clark to help finance the studies which he was making with Louis B. Sohn, a lecturer*119 on law at the Harvard Law School, looking toward revision of the United Nations Charter. Arrangements had been made to have the final result of this study printed by the Harvard University Press. Clark was a New York attorney, a vice president of United World Federalists, and one of the sponsors of the Pocono Conference. He was a strong proponent of world government among the "minimalist" school of federalists, which advocated only limited powers in the central world government.
(l) F. Palmer Weber. The grants were made to Weber in 1949 and 1950 for a study of philosophical postulates of governments. He had received a doctor of philosophy degree in philosophy from the University of Virginia. He studied at the University of Virginia under Scott Buchanan. Weber submitted to the Foundation the result of the work which he was able to do because of the grant, which was an analysis of the philosophy of John Locke, Jean Jacques Rousseau, Adam Smith, Thomas Jefferson, and Thomas Paine.
(m) Henry Collins, Jr. The grant made to Collins in 1949 was given to enable him to translate into English all of the constitutions of European governments that had been written since World *120 War II. Collins was the director of a library which was collecting such documents in their original language.
(n) Rexford G. Tugwell. Tugwell received a grant in 1949 to enable him to travel in Europe and to study the economic and political *1203 problems of the world. He had been a professor in a number of universities and served in positions with the Federal Government. He also acted as a consultant to the Foundation from time to time. He had been a member of the Committee to Frame a World Constitution, and in 1948 served as chairman of the Progressive Party Platform Committee, in which capacity he advocated a world government plank in the party platform.
(o) Fritz Sternberg. In 1949 Sternberg received a grant from the Foundation to help him finish his work on "Capitalism and Socialism on Trial." In 1950 the Foundation made a research-travel grant to Sternberg to enable him to travel and to study a program of economic aid to Europe upon the expiration of the Marshall plan aid in 1952. Sternberg was born in Germany and had taught in German universities until 1933, when he left that country. He came to the United States in 1939 and is a citizen. He is an economist*121 with an international reputation and an analyst of socialist theory and practice.
(p) James R. Newman. In 1949 Newman was given a grant by the Foundation to enable him to prepare a detailed study of the political, economic, and military implications of atomic energy. A portion of his study was published in the Yale Law Journal. Newman is a New York City lawyer, who held positions in the War and State Departments in the United States and England during World War II. During 1945 and 1946 he had been counsel to the Senate Committee on Atomic Energy.
(q) Max Werner. Werner was a specialist in military history who had been a newspaper correspondent during World War II. Two grants totaling $ 13,125 were given to him in 1949 and 1950 to enable him to finish his study in political and military situations since World War II. He died before the study was completed.
(r) American Friends Service Committee. The grant to this group, a tax-exempt organization, was made in 1950; the money was used to finance roundtable discussions in the United States and abroad on American-Soviet relations.
(s) Frederick Schuman. Schuman was an instructor and assistant professor of political*122 science at the University of Chicago from 1927 to 1936. Since 1936 he has been a professor of political science at Williams College. The grant was given him in 1950 to prepare a college textbook dealing with the problems of world government. A book entitled "The Commonwealth of Man" was published as a result of the grant.
(t) Thomas R. Amlie. Amlie had been a Member of Congress from Wisconsin from 1931 to 1939 and a Special Assistant to the Attorney General of the United States in 1939. The grant, made in 1950, was to enable him to complete a compilation of United States congressional *1204 voting records over the past 20 years. The compilation was published under the title "Let's Look at the Record."
Grants in Category (3).
(u) Harris L. Wofford, Jr. This grant was made in 1949 to Wofford to enable him and his wife to travel and study in India for 1 year. On return to the United States they wrote a book entitled "India Afire," which was later published.
(v) Public Affairs Institute. In 1949 the Foundation made its grant to Public Affairs Institute, a tax-exempt organization, to enable it to undertake a study of Point Four. Its findings were published*123 in a series of pamphlets entitled "The Bold New Program." The trustees of the Foundation were of the opinion that economic development of backward areas of the world was a necessary condition precedent to world government. They thought it desirable to have specialists in this field study the whole subject under the Point Four program.
(w) Basil Davidson. Davidson, a British journalist, received a grant in 1950 to study problems of the economic development of Africa. A book entitled "Report on Southern Africa" was written by him and later published.
(x) James S. Martin. Martin, a member of the staff of the Foundation, received a grant in 1950 to study the use of the corporate form in economic development.
(y) Roland W. Boyden. Boyden is at present dean of Marlboro College. The grant made to him by the Foundation in 1950 was to enable him to complete his study of the history of the corporate form of business organization. The work has not yet been completed, but portions of it have been submitted to the Foundation.
(z) Herman Herrey. Herrey, an architect who has had considerable experience in planning and economic development, was awarded a grant in 1950 in order*124 to prepare a book on problems of regional and world economic development. The book has not yet been published.
(aa) Israel Settlement Study Project. In 1950 the Foundation furnished funds to send a group of 27 young people to Israel for a summer to study the institutions, chiefly the agricultural settlements, used to develop Israel. It was the thought of the trustees that a study of the economic development of Israel would be beneficial, since they considered that Israel was a prototype or pilot project for the development of other backward areas.
(bb) Community Development Projects, Ltd. This was a London group, organized by some leading federalists. Its purpose, as stated in its charter, was to function as a world development corporation *1205 "to help prepare, on the community level, for the establishment of the rule of law among nations and the creation of a world-wide federation of peoples under a common government * * *," and also "to promote legislation and other measures effecting the objects of the organization." The grant was made in 1950 for initial organization and incorporation purposes.
(cc) Massachusetts Institute of Technology. In 1950 this university*125 was given funds to enable it to provide Mrs. Helen Lamb with the opportunity to do research on economic development in India. Mrs. Lamb wrote two studies for publication.
(dd) University of Chicago. This university received a grant in 1950 to aid in the publication of Stringfellow Barr's pamphlet entitled "Let's Join the Human Race." The theme of that pamphlet is that Americans should join the people of the rest of the world in a common community with a common government.
(ee) Union for Democratic Action Educational Fund, Inc. The grant was made in 1951 to this group in order to aid in the distribution of a book entitled "The Only War We Seek" written by Arthur Goodfriend. The purpose of the book was to show that the United States must make real friends among the people of the world if democracy is to survive. The book was published for the Americans for Democratic Action.
(ff) International Development Placement Association, Inc. This organization, sponsored by a group of leading federalists and headed by Clifford Dancer of the Foundation's staff, was established to help young people find opportunities for service in underdeveloped areas. The grant was made in *126 1952.
The staff of the Foundation handled routine administrative work and the processing of applications for grants. Staff members made field trips to observe how grant money was being used. Clifford Dancer on occasions was sent to London, England, to observe the work of the Crusade for World Government and to Paris to observe the work of the World Movement for World Federal Government. He helped that organization prepare for the Stockholm conference. In 1950 he supervised the 27 students who visited Israel. The staff also conducted seminars on the problems of world government.
Certain persons were employed by the Foundation as "consultants." In that capacity Fritz Sternberg reported on "The Revolutions in Asia." Basil Davidson reported on "The Crisis in Africa." Stringfellow Barr published a book entitled "Citizens of the World." Scott Buchanan prepared a report on a visit to Israel and a book called "Essay in Politics."
The Foundation never made grants to persons or organizations antagonistic to the idea of world government.
*1206 In his Final Report on the Pocono Conference (referred to above), Stringfellow Barr described the activity of the Foundation in its first days*127 as follows:
The trustees of the Foundation, though not committed to launching in America a Campaign for a People's Convention, are still of the opinion that such a Campaign, on the basis of unofficial popular elections, is the most genuine proposal for mass education yet made. Until they have explored its possibilities further, they have felt constrained to refuse all but three of the applications for financial assistance which the Foundation has inevitably received. Of these the most relevant to the present discussion was an application from the Crusade for World Government in Great Britain. The trustees deemed it wise, while their staff carried on research, to consider Great Britain as the likeliest laboratory for the sort of mass movement for world government which is required. The British have more experience in this kind of political action than perhaps any other people. They are least likely to find difficulty in combining a mass movement with governmental action. They are perhaps the most likely to see the dangers in work "at the higher levels" without popular support. The Foundation for World Government has therefore made a grant of $ 50,000 to the Crusade for World*128 Government with offices in London, and with their permission is sending a member of its own staff to participate in the work of organization in order to gain experience. This experience may prove highly relevant in the event that American Federalists tackle the job here. Meanwhile, the Foundation staff is engaged in a program of study. That study is based on the assumption that to work effectively for world government may prove simpler if the broad outlines of that government can be discovered, and that to discover even the broad outlines of a possible government for all mankind, one must get a pretty clear picture of the present condition of man.
* * * *
At a meeting of the trustees of the Foundation on January 13, 1949, Stringfellow Barr, as president, submitted a progress report which read in part as follows:
Nearly six months have passed since the establishment of this Foundation; and the problems which its establishment has posed have become sufficiently clarified to invite a general review by the trustees. When the decision to establish it was made on July 7, it was understood by Mrs. Blaine and by me that its objective was American participation in the campaign for a Peoples' *129 Convention which the British Parliamentary group under the leadership of Henry Usborne had proposed. My own willingness to tackle that difficult objective was based on the discussion of its merits and defects which I had heard at the Pocono Conference, a conference which Mrs. Blaine had made it possible to hold.
When the Foundation was legally established on August 3, its objective was wisely generalized into a "Public Educational Campaign in the Principles of World Government", and its staff set to work to explore further than the Pocono Conference could explore, the feasibility of the Peoples' Convention as a means to that education. This exploration was carried on jointly with leaders in the United World Federalists. If the work of the Foundation is to be assessed, it is important at this point to distinguish the occasion of its birth and the historical accidents surrounding its birth, from its proper longterm purpose. Not only did the Foundation spring historically from the Pocono Conference. The Pocono Conference itself sprang historically from a group within United World Federalists*1207 who shared the views of World Republic in Chicago that the American people should*130 participate in the proposed Peoples' Convention. This view was not shared by the leadership of United World Federalists, to whom the Foundation appeared as a victory for a troublesome populist element in its membership. The facts just reviewed have little bearing on the future of the Foundation; but they have great bearing on its early history and the factional disputes that inevitably afflicted that history.
* * * *
the trustees of the Foundation concluded that they would not precipitately organize a national Campaign for unofficial elections to a Peoples' Convention without further staff study of the implications of such a Campaign. The Peoples' Convention remained, in their words, "a working hypothesis" for such study. At the beginning of October a study program was formally organized under the leadership of Scott Buchanan, who has ever since then come to New York two days a week for that purpose. It involved the reading of relevant books and staff discussion of them. It involved full staff conferences with various men whose views were needed, at the offices of the Foundation where that was possible, in Chicago or New Hampshire if necessary. * * *
* * * *
As the problems*131 of the Foundation have begun to clarify themselves, the tasks it ought to undertake have become apparent to its entire staff. These tasks fall into two main categories. On the one hand, it should stick to its working hypothesis that the issue of world government must be raised above the level of membership organizations and committees of well-intentioned persons, and must be taken to the American people, either by means of the People's Convention or by some modification of it or by some even more appropriate device. On the other hand, if this step is not to be blind propaganda and mass agitation, the concrete problems upon whose solution a just and democratic world government will depend must be faced by competent persons with real knowledge of those problems. At present, those who have discovered the necessity for world government are either incompetent to solve the problems it poses; or are unaware of their existence; or are aware and competent, but are vainly trying to deal with them in their spare time. As a result, the world government movement wears an air of innocence or recklessness that has repelled many intelligent men of good will, capable of guiding the actual inception*132 of a world government. In the opinion of the Foundation staff, the Foundation should seek to establish an Institute of World Government under possible university auspices, where these problems could be studied, whether in the field of economics, jurisprudence or elsewhere. * * *
The two poles, then, that are guiding the staff of the Foundation in their thinking are the Peoples' Convention and a first-class Institute for World Government. Pointing towards the first of these poles are the $ 50,000. grant the Foundation made to the British Crusade, and the work Dancer is now doing with them; an investigation of the practicability of holding a state referendum in North Dakota, which may later cause me to lay such a project before the trustees; the project of World Republic to "elect" delegates to the Peoples' Convention from Chicago and perhaps from Illinois as a whole, a project the trustees have already separately examined and on which I believe they should act, whether favorably or unfavorably, at the present meeting; a canvass of the situation in Asia which Harris Wofford hopes the trustees will authorize him to make; plans which the Abbe Pierre has discussed with our staff and *133 which his office in Paris is now *1208 maturing; and, less directly, a plan which he and I are working upon to persuade Charlie Chaplin to make a film that would help focus popular opinion in this country and abroad.
Pointed towards the other pole, the Institute for World Government, are the study program of the Foundation staff; the project of James Martin which will be submitted to the trustees today; a very different project which Palmer Weber is submitting; a project which we hope to persuade Frederick Schuman to submit to the trustees, looking towards training American youth in our colleges in the problems of world government; and a task which Scott Buchanan has promised to undertake for Richard Bolling, a friend of the Foundation now in the Congress -- the sketch of an American national policy, both domestic and foreign, that would lead this country towards, rather than away from, a good world government. All these projects, whose differences spring in large part from differences in personal competence and even from historical accident, are germinations of what might well become the Institute which is so badly needed.
Stringfellow Barr, on December 31, 1949, submitted to*134 the trustees his report on the Foundation from its organization on August 3, 1948, to December 31, 1949. In part, this report read as follows:
The occasion for establishing the Foundation was the hope of answering the appeal of a group of British Parliamentarians that the American people participate in unofficial elections of delegates to a Peoples World Convention, called to draft a constitution for a world government. It is true that the trustees of the Foundation were not convinced that all the details of the British proposal were workable. They were not even convinced that a good draft constitution could be secured by the proposed device, or that, if secured, it could be ratified. But the British proposal did seem to be the only one to date, capable of placing the problems and issues of world government before the American people, where they appeared to belong. It did seem capable of provoking the farmer and the laborer to confront problems that could not safely be left to middle-class liberals to solve.
On the other hand, it was obvious at the first meeting of the trustees -- as in fact it was in the deed of trust that had set up the Foundation -- that our purposes could*135 not stand or fall on the British proposal; that back of our interest in that proposal lay our recognition of the necessity for common political institutions in the new world community; that back of that lay our knowledge that such institutions must "establish justice" and "promote the general welfare" as well as ward off the rain of atom bombs with which world government orators terrified or bored their listeners. What sort of institutions must these be?
* * * *
It [the Foundation] opposes an effort to organize politically a free, white, rich world to defend its possessions against the dispossessed. And it opposes just as drastically a world government movement that attempts to detour, skirt or underplay the world revolution for equality, while fighting for the world revolution against national sovereignty. Everything indicates that, if a just and free government is to emerge, it will emerge from aggressive efforts to solve the concrete political and economic problems that confront the human race now. By attacking those problems aggressively now, we may hope to discover the sort of political institutions through which the human race can govern itself and promote its general *136 welfare.
* * * *
A new foreign policy is indicated, not only in America, but for America's military allies. It should be a foreign policy that leads consciously toward world *1209 government, not away from it. It must lead to a world attack on the concrete problems of a desperate world community. It must build peace instead of trying to buy it with subsidies or bully our opponents into accepting it on our terms. To find such a foreign policy, we shall have to ask questions we have not been asking, and dig up their answers. That will require patient and competent research, not mere propaganda.
It will require research on two levels. There must be a reinterpretation of contemporary history, to find out what has really happened and where we all really are. But, in addition, there must be the sort of technical research that such problems as atomic energy cry aloud for, if Mr. Lilienthal's advice to the American voter to inform himself is to be heeded. The Foundation has planned and assisted both types of research. It is now clear that that is its proper role. The work of agitation, of propaganda, of "action" can safely be left to others. Our business is to ask those questions*137 which our generation must ask itself if mankind is to discover the political institutions adequate to its needs, and to see that competent researchers find answers. Our business is to make available the information and insight without which agitation and action may easily do more harm than good.
It now seems clear that this cannot be done well through world government organizations, although it has taken months of patient trial and error to convince us. These organizations have done good service during the past decade in calling public attention to the need for world government. But it is doubtful how much more they can do until the idea of world government has been given more content. That idea is now in circulation and would appear assured of a future. But if public opinion is to take any useful concrete shape, if statesmanship is to find any concrete solutions, then hard study is indicated.
* * * *
I therefore recommended to the Trustees at their meeting on December 2, 1949, that we adopt as our policy the planning and promotion of a program of research such as this report has described, focusing in the immediate future on the prompt development of the world economy. By joint*138 effort to develop our common economy, the American people and other peoples could learn together how to construct the common political institutions they now lack. The United Nations is presently expanding its efforts in this direction. We should second those efforts and see that the American people have before them the relevant data to guide their own participation as well as the data requisite to integrating a good program of world development into their total foreign and domestic problems. My recommendation of December 2, 1949 led to the adoption of the following resolution by the Trustees:
That the Trustees of the Foundation for World Government, at a meeting on December 2, 1949, in Chicago, having reviewed their operation of the Foundation since its establishment on August 4, 1948, have unanimously reached the following conclusions:
Experimental efforts to forward the purposes set forth in the deed of trust which established the Foundation, by grants-in-aid to world government organizations, have on the whole not brought positive results;
Grants made for research into concrete problems, particularly the economic problems, which must be attacked if a good world government*139 is to be established, seems a more promising means of carrying out the Foundation's purposes;
The trustees therefore adopt as their formal policy: to foster, guide, and finance study and research, whether by individuals, by academic institutions, *1210 by other tax-free research groups, or by members of their own staff, and to conduct such research with an eye to a free, just, and democratic world government as the final goal.
Many advocates of world government will consider such a decision by the trustees of the Foundation to be a retreat from the problem or an acceptance of the view that nothing can be done about world government until a cold war miraculously and automatically develops into a sense of world community. It is on the contrary a decision to accept the actual gage of battle already at our feet and to discover the public policies that can lead from where we actually are to where we must somehow get.
While many world government groups will deplore this change, there are, fortunately, many men and women who are quite aware that a world government must be invented and established; who would not now join any world government organization, because of the facile solutions*140 such organizations have proposed for a cruelly complex problem; who know that there are governments and governments, whether national or world-wide; and who can be counted upon to help us if we conduct our enquiry with due skepticism and due determination. We must focus on the problem all the professional competence, all the technical knowledge, and all the wisdom that such men and women can furnish.
On August 27, 1951, the Commissioner of Internal Revenue in response to an application by the Foundation ruled that the Foundation was not exempt from taxation as a foundation "organized and operated exclusively for educational purposes within the meaning of" section 101 (6) of the Internal Revenue Code of 1939. On December 12, 1952, the Commissioner issued a ruling that the Foundation was exempt from taxation as an organization "not organized for profit but operated exclusively for the promotion of social welfare" under the provisions of section 101 (8) of the 1939 Code.
OPINION.
The question before us is not whether the Foundation for World Government is exempt from income taxes. The Commissioner has already ruled that the Foundation is exempt under section 101 (8) of the Internal*141 Revenue Code of 1939, 4*142 which deals with organizations, among others, "not organized for profit but operated exclusively for the promotion of social welfare * * *." The questions before us are (1) whether the transfers made by Mrs. Blaine to the Foundation are deductible from her gross income under section *1211 23 (o) (2), 5 and (2) whether such transfers are deductible for gift tax purposes under section 1004 (a) (2) (B). 6Sections 23 (o) (2) and 1004 (a) (2) (B) are not correlated with section 101 (8), and, if they are applicable, it must be for some reason other than the applicability of section 101 (8).
*143 Section 23 (o) provides generally for income tax deductions of charitable and related contributions; section 1004 (a) (2) provides for gift tax deduction of charitable and similar gifts. The only provisions relied upon by petitioner here are common to both sections 23 (o) (2) and 1004 (a) (2) (B), and deal with gifts made to a foundation "* * * organized and operated exclusively for * * * educational purposes * * * no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation." The key word in these provisions for present purposes is "educational." To come within these provisions petitioner must establish that the Foundation was an "educational" institution within the meaning of the statute. Had the Commissioner ruled that the Foundation itself was exempt as an "educational" institution under section 101 (6), 7 it is doubtful whether this case would ever have *1212 arisen, for the language of section 101 (6) in this respect corresponds with the language of sections 23 (o) and 1004 (a) (2). However, the Commissioner refused to rule that the Foundation was exempt as an "educational" institution under section 101*144 (6); he ruled only that it was exempt under section 101 (8) as a "social welfare" organization. But there are no corresponding provisions in sections 23 (o) and 1004 (a) (2) dealing with "social welfare" organizations; no income tax deductions are provided for gifts to "social welfare" organizations, nor are such gifts declared to be deductible in the computation of the gift tax. To prevail here, petitioner must establish that the Foundation is an "educational" institution.
*145 Congress has enacted detailed statutory provisions dealing with exempt organizations and the tax consequences to donors of gifts to such organizations. The question in any particular case is neither whether the organization is worthy, nor whether it is engaged in desirable activities, but it is whether the particular matter under review is covered by the specific statutory provision relating to it. Thus, in this case we are not concerned with whether the Foundation for World Government was "charitable" in a general sense or whether it was devoting its efforts towards a commendable objective; the sole question presented by the parties is whether it was organized and operated exclusively as an "educational" institution within the meaning of sections 23 (o) and 1004 (a) (2). If it cannot qualify as such an "educational" institution, then the gifts in question are not deductible under section 23 (o) or 1004 (a) (2).
It is to be noted that the applicable statutory provisions require that the Foundation in question be organized "and" operated for educational purposes. These are conjunctive conditions, and we must inquire whether the Foundation fulfills both of these requirements. The*146 record before us is voluminous. We have in evidence a detailed account of the establishment of the Foundation and the history of its operations during the first few years of its life. And after a careful study of the entire record we are satisfied that the Foundation was neither "organized" nor "operated" exclusively for educational purposes.
Mrs. Blaine was the sole benefactor of the Foundation. It was she who established it, pursuant to an understanding with Stringfellow Barr to donate one million dollars. It was not contemplated that there would be other donors or that Mrs. Blaine herself would make any further contributions. It was an outgrowth of the Pocono Conference, which Mrs. Blaine had financed, and the evidence before us is clear that her interests went beyond any mere academic or educational studies in relation to world government. The trust instrument itself speaks of world government as a "goal" to be achieved and states that *1213 "the imperative task for which the fund is established is to spread the movement for world unity as rapidly as possible." While it is true that there are other recitals in the instrument compatible with the establishment of an educational*147 organization, we are satisfied that these represent merely a subordinate objective and that the dominant aim was to organize a foundation to assist in bringing about a world government as rapidly as possible. Indeed, the latter objective was regarded of such importance that article IV of the trust instrument directed the trustees "to utilize the fund as promptly as possible," and provided that "the fund shall be entirely liquidated and expended not later than December 31, 1958," with permission to the trustees to extend the period for 10 additional years.
Moreover, the activities of the Foundation, particularly during the first year of its life, fail to qualify it as having been operated exclusively for educational purposes. The early grants, which were substantial in amount, were largely to organizations or groups that were vigorously supporting the world government movement, and we cannot find that such grants were made for "educational" purposes. Subsequently, the trustees apparently concluded that such grants would not turn out to be as fruitful as had originally been hoped for, and they modified their policy by making grants for studies and similar projects, in view of their*148 conclusion that further study was necessary in the field of world government and the problems relating to it. It is these grants that come closest to qualifying the Foundation as operating for educational purposes. However, we are satisfied that these grants were merely made as a means to the sought-after end of world government. And though they on the surface would seem to qualify as "educational," the ultimate aim of such work was the attainment of a political objective. Cf. Slee v. Commissioner, 42 F.2d 184">42 F. 2d 184, 185 (C. A. 2). 8 But in any event, as already noted, these "study" grants were merely some of grants made by the Foundation, since it had already made large amounts available to groups that were actively advocating and seeking the establishment of world government. Furthermore, we have serious doubt whether a change in policy, such as was adopted by the trustees herein, could render deductible gifts to the Foundation which were made prior to such change. We find that *1214 the Foundation was not organized and operated exclusively for educational purposes, 9 and we hold that the gifts made by Mrs. Blaine are not within the purview*149 of sections 23 (o) (2) and 1004 (a) (2) (B).
*150 Decisions will be entered for the respondent.
Footnotes
1. Anita McCormick Blaine died on February 19, 1954. On March 4, 1954, an order was entered substituting the executors of her will as petitioners in her place and the caption was accordingly changed.↩
2. The stipulated amounts of the gifts, as set forth above, are in excess of one million dollars. This excess is due to the fact that the stock which Mrs. Blaine gave the Foundation did not produce as much cash on its sale as was expected at the time the gift was made.↩
3. The stipulation of the parties fixes this amount as $ 23,110. However, the evidence suggests that this may be in error and that the correct amount is $ 23,160.↩
4. SEC. 101. EXEMPTIONS FROM TAX ON CORPORATIONS.
the following organizations shall be exempt from taxation under this chapter --
* * * *
(8) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes;↩
5. SEC. 23. DEDUCTIONS FROM GROSS INCOME.
In computing net income there shall be allowed as deductions:
* * * *
(o) Charitable and Other Contributions. -- In the case of an individual, contributions or gifts payment of which is made within the taxable year to or for the use of:
* * * *
(2) a corporation, trust, or community chest, fund, or foundation, created or organized in the United States or in any possession thereof or under the law of the United States or of any State or Territory or of any possession of the United States, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation. * * *↩
6. SEC. 1004. DEDUCTIONS.
* * * *
In computing net gifts for the calendar year 1943 and subsequent calendar years, there shall be allowed as deductions:
(a) Residents. -- In the case of a citizen or resident --
* * * *
(2) Charitable, etc. gifts. -- The amount of all gifts made during such year to or for the use of --
* * * *
(B) a corporation, or trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals; no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation. * * *↩
7. SEC. 101. EXEMPTIONS FROM TAX ON CORPORATIONS.
the following organizations shall be exempt from taxation under this chapter --
* * * *
(6) Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation. * * *↩
8. In the Slee case, Judge Learned Hand, dealing with gifts to the American Birth Control League, stated (p. 185):
"It may indeed be for the best interests of any community voluntarily to control the procreation of children, but the question before us is whether the statute covers efforts to proselytize in that or other causes. Of the purposes it defines 'educational' comes the closest, and when people organize to secure the more general acceptance of beliefs which they think beneficial to the community at large, it is common enough to say that the public must be 'educated' to their views. In a sense that is indeed true, but it would be a perversion to stretch the meaning of the statute to such cases; they are indistinguishable from societies to promote or defeat prohibition, to adhere to the League of Nations, to increase the Navy, or any other of the many causes in which ardent persons engage."↩
9. The Government has urged further that the income tax deductions and gift tax exemption be denied because of the alleged "subversive" character of some of the recipients of the grants, which, it is argued, taints the Foundation itself in the circumstances of this case. Some evidence was received in this connection, over vigorous objection by petitioner. The conclusions that we reach herein in no way rest upon any such evidence.↩