Proceedings of the Board of Regents (1936-1939)

932

SECOND MAY MEETING, 1939

We are informed that it is probable that the State of Illinois will exact a tax
upon the gross estate, including in that gross estate, the principal of the trust
estate as it existed at the time of Mr. Babcock's death. We are further advised
that in the event a tax is assessed on the aforesaid basis, it will approximate
$326,750.00. It also seems to us advisable to resist the payment of such a tax for
legal reasons and should the tax be resisted, it is agreeable to us that the Executors of the estate, namely, Arthur M. Kracke and Robert S. Babcock, as Executors
are authorized to employ Davis and Kracke, as attorneys to contest the payment
of the said proposed tax and that such Executors may make a contract for their
services in that behalf.
It is.further agreeable to us that in the event that the assets remaining in
the estate are not sufficient to meet the expense of contesting the tax proposed by
the State of Illinois, then the Executors shall be at liberty to draw from the
principal of the trust estate for any sums of money due or expended in such litigation which cannot be satisfied out of the assets of the said estate.
This letter and understanding is written to you jointly after full consideration
by the Board of Regents of the University of Michigan of the questions involved
and after the Board of Regents has approved the plan proposed and as further set
forth in the above letter.
I am directed as Vice-President and Secretary to execute this letter and understanding and agreement on the part of The Regents of the University of Michigan.
Mr. Kracke withdrew.
Regent Cram withdrew.
The Regents adopted the following preamble and resolution with
respect to the agreement herein below appearing and with the understanding that the agreement when executed should not be actually
delivered or take effect until The Regents should approve the therein
proposed agreement with the Engineering Society of Detroit (p. 917).
WHEREAS, the Agreement dated May 11th, 1939, between Horace H. Rackham
and Mary A. Rackham Fund, a Michigan non-stock Trustee Corporation, as Donor,
and The Regents of the University of Michigan, a body corporate, as Donee, has
been considered by The Board of Regents of said Donee, a copy of which Agreement is set forth in the minutes of this meeting immediately following this Preamble and Resolution;
Now, therefore, be it Resolved, That The Regents of the University of Michigan, a body corporate, does hereby accept said Agreement of May 11th, 1939, and
does hereby authorize, empower and direct Alexander G. Ruthven, as its President,
and Shirley W. Smith, as its Secretary, to execute and deliver said Agreement on
its behalf, and does hereby ratify and approve all acts and things heretofore performed and undertaken by said officials on its behalf in connection with said
Agreement.
The agreement is:
Agreement made this 11th day of May, 1939, between the Horace H. Rackham and Mary A. Rackham Fund, a nonstock trustee corporation organized and
existing under Act No. 327 of the Public Acts of 1931 of the State of Michigan,
having its principal office in the City of Detroit, County of Wayne, State of
Michigan, as Donor, and The Regents of the University of Michigan, a body corporate, created by and existing under the provisions of the Constitution of the
State of Michigan, having its principal office in the City of Ann Arbor, County
of Washtenaw, State of Michigan, as Donee.
WITNESSETH:
I. Donor does hereby give, grant, transfer and assign to Donee all of the
bonds, securities and cash described in Exhibit "A" hereto attached and made a
part hereof and having a market value as of the date hereof of Five Hundred
Thousand Dollars ($500,000.00) or thereabouts, the principal, income and proceeds thereof to be used in the manner and for the purposes hereinafter specified.
II. Donee hereby accepts the aforesaid grant and agrees that the principal,
income and proceeds thereof shall be used in the manner and for the purposes
hereinafter specified.
III. Donor and Donee agree as follows:
a) The bonds, securities and cash described in said Exhibit "A," and the
proceeds thereof and income therefrom shall be used by said Donee, in addition