Evening Star Newspaper, February 28, 1932, Page 82

THE SUNDAY STAR, WASHINGTON, D. C, 2 . -— Contrasting Wills ot Multimillionaires No Tzo Greater Extremes of Frugality and Charity Were Ever Recorded Than in the Cases of the Mail Order Magnate Who Belicved Money Was Made to Give Away and the Soup King Who Didn’t. HERE are multimillionaires and multi- miliicnaires. Some of them like to give away their money and some do not—most emphatically, do not. When two such men are put side by side in the spotlight by the accident of current events, the result is a striking contrast. At about the time that the will of the late Julius Rosenwald was being probated in Chi- cago recently—a will which left $11,000,000 to charity and brcught the total charitable gifts of the mail order genius to the neighborhood of $70,000000—the State of Pennsylvania was fighting t> collect inheritance taxes of the estate of the lote Dr. John T. Dofrance. Dr. Dortance, who had been sole owner and president of one of America’s bigger soup companies, left an estate estimated at $114.- 000,000 in New Jersey and at $200,000,000 in Pennsylvania. In his life he had given nothing publicly to charity: in his will he left nothing to charity—ncthing, even, to any faithful servants. Rosenwald wzs famous for years as ome of America’s greatest philanthropists. He is said to have given away four times as much money as he finally left to his heirs, He gave, for instance, $20,000,000 to the Julius Rosenwald Fund, and stipulated that interest as well as principal must be spent within 25 years of the date of his death. He gave $5,000,000 to found an industrial museum in Chicago, $6.000,000 for Jewish colonization work in Russia, $3,000,000 to the University of Chicago, $2.500,000 to build model tene- ments for Negroes in Chicago, $5,000,000 to the American-Jewish Joint Agricultural Cor- poration, $5,000,000 to the Jewish Theological Seminary, $500,000 to aid German war orphans and widows—end so on, through a long lis% that contains almost innumerable items. R. DORRANCE—at the time of his death, in the Fall of 1930—was rated one of the Nation’s richest men. Only two American fami- lfes, the Fords and the Rockefellers, had more money than his family; only two individuals outside of those families—Andrew Mellon and Anna R. Harkness—had as much private capi- tal as he. Yet Dr. Dorrance remained a saver of dollars to the last. In his 35-page will he gave his entire fortune to his immediate family, and stipulated that his estate be kept intact for 16 years so that State and Federal inheritance taxes might come out of the interest on the principal and leave the body of the fortune untouched for future distribution. By comparison with that 35-page will there s Rosenwald’'s will of slightly over a page— with its final $11,090.000 bequest to charity. Never was there a greater contrast between the lives of two rich men. Rosenwald was born in Springfield, IIl., th: son of a small storekeeper. He went to the public schools until he was 16 and then en- tered business. After operating a elothing store for some years, he entered tre mail order field in 1895 and built up a gigantic mail order house. Entering the firm with an investment of $35,000, he saw his holdings increase to a total value—before the 1929 crash—of more than $150,000,000. R. DORRANCE was born in Bristol, Pa, attended a private school in Philadelphia, the Massactusetts Institute of Technology and the University of Gottingen, in Germany, where he won a doctor’s degree in science. His family wanted him to tzke up a profession, but he had a practical turn of mind and busi- ness appealed to him. Returning to the United States, he went to work in the factory of his uncle, who had a canning plant in Camden, N. J. A tireless worker and an expert in scientific agriculture, he spent his time improving varieties of fruits agd vegetables and delevoping condenced soups. Thirty-four years ago he founded a soup company. The company grew by leaps and bounds, and he became sole owner. But he never stopped working., and he never spent his money freely. The present litigation over inheritance taxes arises from the fact that Pennsylvania and New Jersey could never agree on Dr. Dor- rance’s place of residence. At Cinnaminson, N. J., he bad a farm, and a modest brick house. At Radnor, Pa., he had a huge estate with an elaborate and ex- pensive home. HNis family lived there—and had he lived there, too, Pennsylvania would have collected about $400,000 a year from him in taxes. But he insisted that his home was in New Jersecy, where his real estate and personal property were taxed at a modest $106 a year. and where his $73,000,000 worth of soup com- pany stock was not taxed at all T his death New Jersey collected $12.000,- 000 in inheritance taxes, while Uncle Sam took another $9,500,000. Now Pennsyl- vania, claiming that be was really a Pennsyl- vania citizen, is trying to collect inheritance taxes of $31.465.200—the largest in she history of the State. Ellis Ames Ballard, lawyer for the Derrance estate, declares that Dr. Dorrance always con- sidered Cinnaminson his home and owed noth- ing to Pennsylvania. William A. Gray, special counsel for Pennsylvania, on the other hand, The late Julius Roseiwald, who gave away $70,000,000. FEBRUARY 28 1932 —— o, The late Dr. John T. Dorrance left a vast fortune to his family. asserts that the Cinnaminson house was merely a blind, maintained to evade Pennsylvania taxes. Gray, incidentally, called Dr. Dorrance the stingiest man he had ever known. To buttress this assertion, he got testimony concerning the soup king’s living expenses over a period of «years. “ Prom 1920 to 1925 Dr. Dorrance’s income ranged from $3,500,000 to $4,000,000 a year. During that period his living expenses at Cin- naminson ran to not more than $10,000 an- nually. Add to that an additional $10,000 a year which he spent on trips to Florida and Europe, and it appears that he was saving all but about $20,000 of each year's income. In 1925 came a change in the Dorrance household. Elnor, eldest of the four daugh- ters, was almost ready to make her debut. Ethel, Charlotte and Peggy were growing up. Little Jack was almost old enough to go to scheol. And Cinnaminson, at $10,000 a year, was hardly a setting for social affairs. HUS came Dr. Dorrance’s one and only ex- travagance. He bought a big home at Radnor, Pa., for $350,000, adderl $80,006 worth of land and spent $450,000 on the furnishings. From 1925 to 1930 the annual expenses at Radnor were $95.000. Thus, including the complete cost of the hcuse, during those five years he was able to save around $18,000,000 out of his income. His widow testified that Dr. Dorrance often vehemently objected to the size of the electric light and gas bills at Radnor, telling her once to take the bulbs out of the servants’ quarters because the servants burned too much light. She said that he argued with her about the size of the food bills and was particularly en- raged with a butler who had bought the family food az a high-priced store. Domestics in the soup king’s employ received from $12 to $14 a week. Once, when a num- ber of applicants responded to an advertise- ment for servants, those who were willing to work for $12 were asked fo raise their hands— and the others were immediately turned away. His head gardener said that onee Dr. Dor- rance looked out of a window and saw an under-gardener resting for a few minutes. Dr. sweat of his brow, and said that the gardener must be discharged at When people came to ask him to to charity in Pennsylvanis he said in New Jersey. A citizen of Cinnam the other hand, ssid that he had Dorrance to give momey fcr coal for church and had been refused. R. DORRANCE'S will, with its 36 pages, is & compiicated document. The four daughters receive a monthly income of $10,006 each: the som and widow receive twice that amount. When the estate is divided in 1946, the son and the mother are to get a quarter each, while the daughters will each get an eighth. Control of the soup company re- mains entirely with the family. Dr. Dorrance’s entire library, goes to his som, with the stipula- tion that it be kept intact until the boy reaches the age of 50. Rosenwald, in his will, simply directed the payment of his debts, begueathed $11,000,000 to the Rosenwald Family Association, a char- itable organization he had set up, and crdered that the remainder of his fortune be equally divided among his five children. His willingness to be cpem-handed with his money, exemplified so many times in his gifts to charity, was also shown in his conduct of business affairs during the post-war depression of 1921. Incidemtally, that very liberality was ultimately to enrich him very greatly. During that depression sales of his company fell off by $75,000,000 a year. Rosenwald came to the rescue by buying $16,000,000 worth of the company’s real estate and giving 50,000 shares of stock to the company’s treasury. The stock was va'ued at $60 a share. ATER he bought this si:ck back at 3100 a share. In 1928, the cempany issued four new shares of stoek for eaeh one of the old, and thus the temporary loss that he took im 1921 turned into a personal profit of $25,000.000. In striking contrast, too, with Dr. Dorrance’s assertion that he had made his money by the sweat of his brow was Rosenwald's famous declaration that the ingredients which went to the making up of his own fortune were 10 per cent hard work and 90 per cent luck— and he said, with a smile, immediately after- ward, that the amount of luck really ought to be figured st 95 per cent instead of 90. He = “I never could understand the popular belief that because s man makes a lot of money he has a lot of brains. Some of the richest men I have met in my life have been the most stupid. There are men in America today, financial failures, who have more real brains than I ever will have. I had the luck to get my opportunity; their oppertunity never came.” One thing he would never discuss very freely was his own philanthropy. Aside from saying that “like Topsy, it ‘just growed,’ ” he would not talk absout it. Associates said that for some timwe his bemefactions amounted to around $6,000.000 a year—not counting the gift in his w'll NE of the gifts of which he was proudest was the great industrial museum in Chi- cago, housed in the old Fine Arts Building of the Chicago World's Fair. In this museum are being assembled com- plete working models of almost every industriat and mechanical device in the world, from steam engines down to dish-washing machines, from coal mine systems to a replica of the Welland Canal. All “of these models will be right out where the spectator can tinker with them, too; no glass cases or iron bars or for- bidding signs will keep people at a distance. The colored race owes the philanthropist & good deal, too. He contributed to funds for the erection of more than 4,000 schools for Negroes, helped build 16 Y. M. C. A buildings. for them., and helped to supply libraries for 140 colored rural schools and 11 colored normal schools and colleges, {