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Chapter 29: Liberty Fund, Inc. - Dane Starbuck, The Goodriches: An American Family [2001]

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The Goodriches: An American Family (Indianapolis: Liberty Fund, 2001).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Chapter 29

Liberty Fund, Inc.

What spectacle can be more edifying or more seasonable, than that of liberty and learning, each leaning on the other for their mutual and surest support?

james madison

It is intended to use this Fund to the end that some hopeful contribution may be made to the preservation, restoration, and development of individual liberty through investigation, research, and educational activity.

pierre f. goodrich, Liberty Fund Basic Memorandum

What do men and women who have much more money than they could possibly ever spend on themselves do? They form a foundation. Where a man’s treasure is, there is also his heart.1 Through the Lilly Endowment, Pierre Goodrich’s contemporary Eli Lilly made tremendous contributions to historical research, education, and other causes throughout the state of Indiana and beyond; Harrison Eiteljorg, another Indianapolis businessman who made his fortune in the coal industry, built a fabulous museum of original American Indian and western art; Hoosier industrialist Irwin Miller’s love of architecture has resulted in prize-winning and aesthetically beautiful churches, libraries, and schools in his hometown of Columbus, Indiana.

Pierre F. Goodrich wanted to be an architect of the mind. His vision was Liberty Fund, Inc. He left his fortune—an endowment now valued well in excess of $360 million—to encourage a deeper understanding of what it takes to achieve and maintain a free society.2 He did not want his money to be spent for the construction of a football stadium or a gymnasium. In fact, the only capital building project to which he is known to have contributed was the Goodrich Seminar Room at Wabash College’s Lilly Library. He gave money for that undertaking only because he hoped the seminar room would serve as the venue for frequent philosophical discussions. Goodrich thought money should be spent on developing minds and culture, not on “things.”3 He felt appreciated most not when he received honorary degrees or certificates of merit, but when people accepted his ideas.

Irwin H. Reiss, a founding board member of Liberty Fund, believes he has at least a partial understanding of why Goodrich established this unique foundation. “Mr. Goodrich saw liberty and freedom for the individual slipping through our hands and if he could leave a legacy to future generations and halt that loss of freedom, I think he, in his own opinion, would feel like he was really accomplishing something. And he surrounded himself with people who felt like that and could help him implement this concept.”4

One reason Goodrich formed Liberty Fund is that he did not think that the kind of continual learning he believed was important could be facilitated by donations to an existing college, university, or foundation.5 Goodrich believed that the traditional liberal arts college, let alone the large university or technical school, was sorely in need of reform. Rather than risk contributing his millions to a particular educational institution in hopes that it might embrace his vision (his years of association with Wabash College made him highly doubtful that such an institution existed), Goodrich decided to create his own foundation. Goodrich’s establishment of Liberty Fund can be seen as the culmination, the magnum opus, of his life.

Liberty Fund was incorporated in the state of Indiana on August 18, 1960. It was also on that date that the founding board of directors first met.6 Goodrich’s vision for Liberty Fund existed for several years before 1960, however, as is evident from his years of writing the Basic Memorandum, the document that is the foundation’s bible. The first board of directors of Liberty Fund included Goodrich and his wife Enid (who were elected lifetime directors), Benjamin A. Rogge (then dean of Wabash College), Irwin H. Reiss (then president of Meadowlark Farms in Sullivan, Indiana), and Don E. Welch (then vice-president of Peoples Loan and Trust Company in Winchester, Indiana). Helen Schultz served as secretary and treasurer (she was named a Founder Member in June 1967).7

In his creation of Liberty Fund, Goodrich was assisted by the late William Casey, as well as by Goodrich’s personal attorney, William Hunter. Casey was a top-notch tax lawyer who later became director of the Securities and Exchange Commission, director of the Central Intelligence Agency, and chairman of Ronald Reagan’s 1980 presidential campaign. Another individual who assisted in the early formation of Liberty Fund is William Fletcher, who at the time was a partner with Arthur Andersen, the large accounting firm based in Chicago. Fletcher was managing partner of Arthur Andersen’s Indianapolis office from 1960 to 1972. Goodrich consulted with these men extensively about the establishment of Liberty Fund and the need to have it exist as a tax-exempt private foundation.

In August 1962, the Internal Revenue Service (IRS) denied Liberty Fund’s initial application for tax-exempt status. The formal basis for the denial was that Liberty Fund was “not organized exclusively for educational purposes within the intention of section 501(c)(3).”8 Apparently, the real basis of the IRS’s denial was that it believed that the goal of the foundation was to promote political (legislative) change. After Casey, Fletcher, Hunter, and Goodrich redrafted the articles of incorporation, however, the IRS granted Liberty Fund tax-exempt status in December 1962.9

An indicator that Goodrich had designs for establishing Liberty Fund in the 1950s is his plan for endowing the foundation. In 1945, Goodrich had formed the Winchester Foundation. Goodrich made monetary contributions to the Winchester Foundation in the 1950s with the intent that those funds would spill over into his education foundation (then unnamed) when it became operable as a nontaxable private foundation.10 In May 1962, Liberty Fund held only a minuscule endowment of slightly more than $4,000. By June 1963, however, after Liberty Fund’s tax-exempt status had been achieved, Goodrich transferred funds from the Winchester Foundation to Liberty Fund. Those funds, which were in the form of cash, stock, and real estate, amounted to nearly $670,000. Almost all the contributions were made from five holding companies controlled by Goodrich himself: Engineers Incorporated; the P. F. Goodrich Corporation; Central Shares, Inc.; Muncie Theatre Realty; and Patoka Coal Company (a holding company that owned shares in the Ayrshire Collieries Corporation).11

In the 1960s and 1970s, Liberty Fund was primarily a grant-making foundation. Gottfried Dietze, professor of political science at the Johns Hopkins University, served as a paid consultant to the board during that time. At board meetings conducted by Goodrich and attended by Enid Goodrich, Rogge, Reiss, and Welch, the board would consider grant requests from several institutional and individual applicants. The board would then contribute amounts as small as fifty dollars to assist, for instance, with a professor’s traveling expenses to attend a conference. Many of the early awards included grants to the Foundation for Economic Education (FEE), the Foundation for Foreign Affairs, the Great Books Foundation, Wabash College, the China Institute of America, and other institutions in which Goodrich took a long-term interest. Each grant request was measured against whether its purpose was consistent with the criteria contained in the Basic Memorandum.12

At the time of his death, Goodrich was fighting for Liberty Fund to exist as an operating foundation. He was still working with tax advisers and the Internal Revenue Service to see that his personal profit from the sale of the Ayrshire Collieries Corporation was transferred to Liberty Fund with no, or minimal, tax. As Goodrich wrote to his tax attorney, E. Victor Willetts, he saw that how the taxation issue was finally resolved would have major implications, beyond the viability of the foundation itself. “We are hopeful that we can be declared an operating foundation which will have a chance to survive, and survival may be worthwhile not only to us and to the people working with Liberty Fund, but to society itself (usually, however, prophets prophesy too late—wasn’t Jewish society all through after Solomon, really, and the great prophets, Amos, Hosea and Micah came along 200–300 years later).”13

Goodrich left two trust funds with combined assets in excess of $26 million. This formed the foundation’s initial substantial endowment. Most of this money came from Goodrich’s sale of the Ayrshire Collieries Corporation in 1969. Other money that was funneled into the Liberty Fund’s endowment came from the liquidation of holding companies (for example, Engineers Incorporated and the P. F. Goodrich Corporation), the sale of City Securities in 1970, and the 1978 sale of the Indiana Telephone Corporation. Well into the 1990s, approximately one-fourth of Liberty Fund’s endowment was held in stock in Central Newspapers.14 Tax-free transfers of stock were especially important because of the steep capital-gains tax that Goodrich (and later his estate) would otherwise have had to pay.15

Still, other tax obstacles plagued Liberty Fund during its early years. For instance, Goodrich had initially planned for Liberty Fund to manage the companies that the Goodrich family controlled even after his death. Goodrich had hoped this could be achieved, because it would have provided the board of directors with a unique opportunity to apply to practical, day-to-day business operations the classical liberal economic theories that underlie Liberty Fund’s philosophy. Such an arrangement, Goodrich thought, would provide the additional benefit of allowing the income generated from his businesses to be transferred tax-free to the operation of Liberty Fund. That would have provided Liberty Fund with ongoing operating capital to carry on its research and grant-making activities.16 Both federal and state laws, however, essentially precluded such a plan. The Tax Reform Act of 1969 held that a foundation could not retain its tax-exempt status and hold more than a nominal percentage of stock in any one company. Therefore, Goodrich and the subsequent directors of his businesses had to sell off companies such as the Indiana Telephone Corporation. After they were sold, the proceeds could be transferred to Liberty Fund without incurring capital-gains taxes.17

In 1973, after Goodrich’s death, Helen Schultz was elected president of the foundation. Neil McLeod, who had served as economist and director of the Institute of Paper Chemistry in Appleton, Wisconsin, was hired as executive director. Benjamin Rogge served as a paid consultant, spending two to three days each week working on Liberty Fund affairs. William Fletcher was financial vice-president and treasurer.

By the mid 1970s, Schultz, McLeod, Rogge, Fletcher, and the board of directors reached a decision that was extremely critical to the viability and success of Liberty Fund.18 Beginning in May 1975, Liberty Fund entered into, in essence, a probationary period of three years during which it made the transition from a grant-making to an operating foundation, what Goodrich had desired himself. During that time, the general Socratic seminar format, which is now the core of Liberty Fund’s program structure, was fully developed.

From 1975 to 1978, Liberty Fund contracted with both the Institute for Humane Studies (IHS) and individual scholars to hold conferences and seminars. Moreover, a senior-scholars program was established in conjunction with IHS in which prominent scholars such as Friedrich Hayek were invited to conduct seminars.19 Henry Manne, a longtime director of the Center for Law and Economics and formerly associated with George Mason University in Virginia, coordinated approximately a dozen conferences during those three years and many other conferences in later years. Many of the early seminars dealt with practical topics such as planning and the American constitutional legal system, advertising and free speech, deregulation, bankruptcy, and private alternatives to the judicial process.20

According to Manne, “Liberty Fund is generally credited today by the most senior and outstanding scholars in the field of law and economics with having created that whole field. Almost every one of those conferences resulted in either a book or a symposium issue of a law review. Many of them were cited in United States Supreme Court cases. They were absolutely cutting-edge stuff on mundane topics that, nonetheless, philosophically could be always pushed to the issues of a free society.”21

After its three-year probationary period, in March 1979 Liberty Fund received a determination by the Internal Revenue Service granting it operating-foundation status.22 Under its new operating arrangement, Liberty Fund has gone on to sponsor more than sixteen hundred conferences, with more being added each year. Subsequent seminars have included such diverse topics as the “Christian Idea in a Secular Culture: C. S. Lewis and T. S. Eliot,” “Economic Calculation Under Inflation,” “Business and Liberty,” “Freedom and Responsibility in Plato’s Laws,” “The Influence of Foreign Affairs on the American Founding,” and “The Rise of Capitalism in the West.”

Beginning in 1976, Liberty Fund initiated a film series. Four films were produced: Adam Smith and the Wealth of Nations, The Industrial Revolution, Hong Kong: A Story of Human Freedom and Progress, and A Design for Liberty: The American Constitution. From 1976 to 1982, the first three films reached a broad audience, being viewed by more than a hundred thousand high school and college classes, service organizations, and other groups. It is estimated that nearly four million people viewed the films in person and another eleven million viewed them on television.23

Also in 1976, Liberty Fund contracted with IHS, the Reason Foundation, and the Center for Libertarian Studies to organize summer seminars for young scholars (graduate students and new professors). The Liberty Fund Research Seminars were conducted in New York, Chicago, and California until 1980.24 In recent years, Liberty Fund has employed resident scholars to perform research at its Indianapolis offices.

Liberty Fund, as a private, operating foundation, must meet several Internal Revenue Code spending requirements. When the earnings of the endowment exceed this required expenditure, which has generally been true during the last twenty years, then the corpus increases.25

Goodrich’s vision for Liberty Fund can be at least partially attributed to his years of serving on other educational boards. In the 1940s, 1950s, and 1960s, Goodrich served as a director of the Great Books Foundation, the Foundation for Economic Education, the China Institute, the Institute for Humane Studies, and Wabash College. Moreover, his membership in the Mont Pelerin Society enabled him to benefit from the experiences he had gained during his long association with this education-oriented body.

Liberty Fund seminars are a major activity of the foundation, and they originate from Goodrich’s own vision. From the Great Books Foundation, Goodrich adopted the following ideas: the small Socratic seminar that has one or two moderators who encourage discussion among participants on a particular topic (seminars usually have sixteen participants); the importance of discussion rather than lecture; the idea that great texts should form the core of discussion; and the belief that the great conversations worth pursuing were begun in the ancient past, have continued into the present, and will continue in the future.

From Leonard Read of FEE, now a cooperating institution with goals similar to those of Liberty Fund, Goodrich learned the importance of involving people of myriad backgrounds. Goodrich also took from FEE the ideas that political and intellectual liberty are closely linked with economic freedom and that economic freedom has its responsibilities beyond maximizing the greatest profit.

From his association with the Mont Pelerin Society, Goodrich realized the importance of reaching out to scholars and intellectuals who have common regard for individual liberty. This is true for several reasons. First, Goodrich and his associates knew that even with the help of resources as great as those held by Liberty Fund only a small percentage of the total population can ever directly participate in a sponsored seminar. Therefore, in order to maximize the resources of Liberty Fund, it is important to attract participants who are in a position to affect the thinking of others. It is not by accident that the majority of Liberty Fund participants are academics. Others in positions of intellectual influence, however, are also invited to attend conferences, including individuals in business, the media, government, and the learned professions, including law, medicine, and the ministry. Second, many participants are repeatedly invited to attend seminars; this practice is based upon the belief that thinking about the ideal of a society of free and responsible individuals is a continuous and evolving experience that is best achieved through repeated conversations with other learned individuals.26

The central tenets of Liberty Fund can be summarized briefly. First, education is a lifelong process; Goodrich sought people who recognized that their education was not yet complete. Second, Liberty Fund seminars are generally built around works and ideas of the past. Goodrich valued learning that accumulates throughout the ages, based on the experiences of preceding generations. He recognized that human nature does not change greatly but is not immutable. Man is capable of raising himself to a higher plane of thought and behavior by studying and reflecting upon the great thinkers of the past.27

Third, Liberty Fund seminars are based on a theory of action that focuses on the future. Goodrich believed that the opportunity to engage in discussion about important issues and ideas was worthwhile. Inherent in the seminar format is the belief that man is a truth-seeking being, able to gain insights into complex matters and to test hypotheses, capable of reaching virtually unconditional judgments on the basis of reasoned discourse. These qualities make it possible to improve the lot of both individuals and society. Without this underlying belief, seminar discussions would have little value.28

The ground rules of Liberty Fund seminars are extremely important: No one participant is able to dominate a discussion, and the role of the moderator is to ensure that the true exchange of ideas (a sort of cross-pollination) occurs. Moreover, in an attempt to build a sense of community, participants dine together for all meals and stay for the entire conference, which is usually held at a hotel. Speakers are not sought to address the seminar participants; everyone participates in formal and informal discussions. Liberty Fund seminars have been held in locations as diverse as Australia, South America, and Europe, as well as in hundreds of cities in North America. Participants are given an honorarium.

As a tax-exempt, private operating foundation, Liberty Fund is purely an educational foundation and is unique for what it is not. For instance, it does not (and cannot by law) engage in politics or political action of any kind. It does not, as do such traditional think tanks as the Heritage Foundation, the Brookings Institution, and the American Enterprise Institute, concern itself with influencing topical political debate. It does not attempt to reach the largest number of people. It seldom seeks publicity, and it is hardly known, even in Indianapolis, the location of its headquarters.

Liberty Fund’s charter, known as the Basic Memorandum, was written by Goodrich in the late 1950s and early 1960s with the consultation of a number of broadly educated people he knew from the business and scholastic world.29 The Basic Memorandum is a detailed 129-page blueprint of Goodrich’s “means of relating and combining ideals, experience and business practice.” The manual is primarily composed of Goodrich’s views about how Liberty Fund should operate: everything from how new board members should be selected to what should happen to Liberty Fund in the event that it becomes impossible for it to carry out its stated purpose.30 The Basic Memorandum also contains Goodrich’s views—as they were expressed in letters and other works he authored—on such subjects as man’s ignorance and imperfect nature, the desire of men to govern others, and the problems of power.

The Basic Memorandum also contains selections from John Mill’s On Liberty and the Statement of Aims of the Mont Pelerin Society. At the end of the Basic Memorandum is a book list containing seventy-six great literary works: from the Old and New Testaments to books by more than thirty thinkers, including Aristotle, Luther, Goethe, Lord Acton, F. A. Hayek, and Ludwig von Mises. Goodrich recommended that board members and anyone interested in enduring ideas should read liberally from this list. The list of books is reproduced in appendix B.

In years to come, the Basic Memorandum will no doubt take on even greater significance as a guide to Goodrich’s desires for the foundation. While almost all current board directors knew Goodrich personally, many future directors, who will not have had the benefit of knowing Goodrich, will have to rely even more on the tenets found in the Basic Memorandum if they are to maintain the foundation’s integrity.31 Still, the memorandum is vague; it is not an explicit guidebook, but a reflective document about Goodrich’s personal concerns. As Liberty Fund senior fellow William C. Dennis states, “The Basic Memorandum doesn’t tell us what to do; it tells us how to think about what we should do.”32

The publishing arm of Liberty Fund is another important aspect of the foundation. In 1971 Liberty Fund published in book form the papers presented at the seminar “Education in a Free Society.”33 Since that time, Liberty Fund has published more than one hundred titles, many of them reprints of such classical texts as Adam Smith’s Wealth of Nations, The Selected Writings of Lord Acton, Ludwig von Mises’s Socialism, and F. A. Hayek’s The Counter-Revolution of Science. A cuneiform inscription, the earliest-known appearance of the word “freedom” (amagi), or “liberty,” is imprinted in each book.34

In April 1978, Helen Schultz stepped down as president of Liberty Fund. Neil McLeod succeeded her, serving until May 1986 in that position. After McLeod’s retirement, Dr. W. W. “Dub” Hill, a former Indiana state senator, headed Liberty Fund until 1992. Hill was succeeded by T. Alan Russell as chairman and chief executive officer and by J. Charles King, a former philosophy professor, as president. King, in turn, turned over the presidency in November 1995 to George B. Martin, formerly a professor of literature at Wofford College in South Carolina.

The board of directors is composed of men and women who take Goodrich’s mission seriously. They bring to their positions diverse and valuable experiences from their own occupational backgrounds: Among them are a former president of a large Illinois milling company, a bank president, a founder of the Universidad Francisco Marroquin in Guatemala, a former president of the Indianapolis Power and Light Company, a lawyer and current college professor of political science, a former president of Meadowlark Farms, and a former undersecretary of defense during the Nixon administration. Pierre’s wife Enid served as vice-chairman of the board until her death in November 1996.35

Was Pierre Goodrich’s decision to establish Liberty Fund a wise one, especially in light of the huge sum of money that he left to the foundation? Would it have been better for Goodrich to have applied his wealth to more practical ends? With so many needs and problems in the world—humanitarian, educational, social—could not the assets have been used to support more beneficent, humane, and practical endeavors? Moreover, if Goodrich truly wanted to influence people’s thinking, would it not have been better for him to establish a more traditional think tank whose results could have been more readily seen and evaluated? These questions are invariably raised whenever the work of Liberty Fund is closely examined.

To see the intrinsic worth of Liberty Fund takes a certain kind of long-term vision. Changing people’s perceptions of themselves and how they are governed and behave in society is an ongoing endeavor. Yet the foundation has the luxury of taking a long-term approach: It does not have shareholders or employees to appease; it is not beholden to anyone or anything except the tenets that Goodrich set out in the Basic Memorandum. There is no reason that the foundation should not continue to exist in perpetuity.

It is interesting to observe how unusual an institution Liberty Fund is. In many ways, it is a modern replica of the ancient Greek academy: While it invites participants to address searching questions, it is not interested in obtaining specific answers or in applying the information that is shared toward a specific purpose; it has a permanent staff and board of directors, but no permanent group of students. It does have disciples, however: participants who have noted the influence that the foundation has had through its extensive seminar and publishing endeavors.

“There’s a totally different set of ideas being discussed in what you call political philosophy,” said James M. Buchanan, a 1986 winner of the Nobel Prize in economics who is general director of the Center for Study of Public Choice at Virginia’s George Mason University. “Surely it [the Fund] has been in part a contributor to that.”36

“It has made a tremendous difference in seeing that the predicate questions of a society are discussed,” said Stephen J. Tonsor, an emeritus professor at the University of Michigan who has attended dozens of Liberty Fund seminars.37 That is indeed the mission of Liberty Fund: to see that the larger questions about man and individual freedom are continually asked and examined. That momentous task and responsibility are commensurate with the desires and the inquiring mind of Liberty Fund’s founder.

V

The Goodriches Assayed

lf1429_figure_056

[1. ]Matt. 6:21.

[2. ]As of April 1996, Liberty Fund had total net assets of $129,745,645, with a fair-market value of $161,358,195. See annual report of Liberty Fund, Inc., available at Liberty Fund offices, 8335 Allison Pointe Trail, Suite 300, Indianapolis, Indiana, pursuant to Section 6104(d) of the Internal Revenue Code. In June 1997, it was announced that the estate of Enid Smith Goodrich had left approximately $80 million to Liberty Fund, bringing the total endowment to more than $200 million. Enid Goodrich also left large gifts to other cultural institutions, including approximately $40 million to the Indianapolis Museum of Art and $40 million to the Children’s Museum of Indianapolis. Smaller amounts were left to the Indianapolis Symphony Orchestra, Conner Prairie, and other Indianapolis institutions. See Steve Mannheimer, “A $160 Million Windfall,” Indianapolis Star and News, June 20, 1997, p. 1, col. 1. Most of the assets held by Liberty Fund are invested in stocks and bonds through Harris Bank of Chicago, Illinois; the U.S. Trust Company of New York, New York; and Peoples Loan and Trust Bank of Winchester, Indiana.

[3. ]When his uncle Percy sought Pierre’s advice about building a band shell in Winchester, Indiana, Pierre responded that Percy’s money could be better spent in fostering an excellent band. If that could be successfully achieved, Pierre reasoned, the local townspeople might build a band shell themselves. See letter from Pierre F. Goodrich to P. E. Goodrich, October 4, 1948 (the letters of Percy Goodrich are held by the family of Perce G. Goodrich, Portland, Indiana).

[4. ]Irwin H. Reiss, interview by William C. Dennis, February 11, 1991.

[5. ]J. Charles King, interview, December 10, 1993; Donald Welch, interview, November 23, 1991.

[6. ]The articles of incorporation of Liberty Fund are located at the Indiana secretary of state’s office, 302 W. Washington Street, Room E018, Indianapolis, Indiana. The incorporators included Pierre F. Goodrich, Enid Goodrich, John B. Goodrich (Pierre’s first cousin), Lucy Ann Elliott (a longtime secretary and administrative assistant to both Pierre and his father), and Helen E. Schultz (secretary to Pierre and later the second president of Liberty Fund).

[7. ]“Minutes of the Organizational Meeting of the Board of Directors of Liberty Fund, Inc.,” August 18, 1960. Helen Schultz became a Founder Member of the Liberty Fund board of directors on June 14, 1967 (for the term of her natural life). See “Minutes of the Board of Directors of the Liberty Fund, Inc.,” June 14, 1967, p. 128 (in possession of Liberty Fund, 8335 Allison Pointe Trail, Suite 300, Indianapolis, Indiana). Schultz resigned as president and member of the board of directors in April 1978.

[8. ]Letter from J. F. Worley, Chief, Exempt Organization Branch, Internal Revenue Service, Washington, D.C., to Liberty Fund, 100 S. Meridian Street, Winchester, Indiana, August 10, 1960 (in the possession of Liberty Fund). Apparently, Liberty Fund’s application was originally denied because of the concern that the IRS had about its activities being not purely educational, but somewhat political. This concern apparently arose as a result of the contents of the Basic Memorandum, which was attached to Liberty Fund’s application for 501(c)(3) status. The view was that the Basic Memorandum had a strong libertarian tone to it. The IRS was concerned that for Liberty Fund to achieve its objectives (a free society), it would have to advocate legislation, since that was the only means to reverse or overturn the existing political structure. See correspondence between Goodrich, Casey, and William Hunter, August–September 1962, tax-exempt-status file, Liberty Fund.

[9. ]Letter from J. F. Worley, Chief, Exempt Organizations Branch, Internal Revenue Service, Washington, D.C., to Liberty Fund, 100 S. Meridian Street, Winchester, Indiana, December 4, 1962 (in the possession of Liberty Fund). Goodrich, Casey, Hunter, Fletcher, Reiss, and Welch met on August 23 and 24, 1962, and redrafted the articles of incorporation to respond to the IRS’s denial. See “Minutes of the Meeting of the Board of Directors of the Liberty Fund, Inc.,” October 1, 1962, p. 27, and memorandum to file of Helen Schultz detailing the reasons for the denial.

[10. ]Don E. Welch, interview, December 16, 1991. Goodrich contributed $1,000 to Liberty Fund on August 18, 1960. According to the board minutes, this was the first money funding the foundation. See “Minutes,” Liberty Fund, August 18, 1960. Board meetings of Liberty Fund were held in Goodrich’s law offices at 711 Electric Building, Indianapolis, until mid 1962. Thereafter, they were held at 3520 Washington Boulevard, Indianapolis, until after Goodrich’s death, when Liberty Fund moved to 7440 N. Shadeland Avenue, Indianapolis. According to William Fletcher, the reasons for moving the headquarters were twofold: first, Liberty Fund (and the other Goodrich companies) had grown too large for the building; second, the location on Washington Boulevard was in a marginal neighborhood, and Fletcher and the board believed that it was not prudent to maintain offices there. William Fletcher, interview by William C. Dennis, January 25, 1991 (recording in the possession of Liberty Fund).

[11. ]In the spring of 1962, the Winchester Foundation contributed five thousand dollars to Liberty Fund. This was the single largest gift to Liberty Fund until after it received tax-exempt status in December 1962. After that, in 1963, thousands of shares and tens of thousands of dollars were transferred from the Winchester Foundation to Liberty Fund. The shares were of Engineers Incorporated, the P. F. Goodrich Corporation, Central Newspapers, Ayrshire Collieries Corporation, Central Shares, Inc., and the Peoples Loan and Trust Company. See “Minutes of Meeting of the Board of Directors of Liberty Fund, Inc.,” January 21, 1963, pp. 36–38.

[12. ]See “Board Minutes” of Liberty Fund, January 25, 1961.

[13. ]Letter from Pierre F. Goodrich to E. Victor Willetts, December 27, 1972 (in the possession of Liberty Fund).

[14. ]As of November 1996, the value of Central Newspapers stock that Liberty Fund owned was in excess of $37 million. Still, this represents less than 5 percent of the total stock ownership of Central Newspapers (Liberty Fund archives).

[15. ]Don E. Welch, interviews, November 23, 1991, and December 16, 1991. The Internal Revenue Service sought capital-gains tax on two trusts Goodrich had established valued at $26.1 million. The IRS alleged that the total capital gains tax on this amount was $6.8 million. Goodrich’s estate lawyers fought the levy and ended up settling with the IRS for $1 million. See “IRS Settles Estate Claim for 1 Million,” Indianapolis Star, July 24, 1975, p. 30, col. 1.

[16. ]Don E. Welch, interviews, November 23, 1991, and December 16, 1991.

[17. ]Don E. Welch, interview, December 16, 1991.

[18. ]According to Henry Manne, former dean of the George Mason University School of Law in Fairfax, Virginia, shortly after Pierre’s death there had been considerable discussion among the directors regarding whether to become an operating foundation or remain a grant-making foundation. Manne had written to either Helen Schultz or Neil McLeod suggesting that the outside controls surrounding an operating foundation were really not much greater than those surrounding a grant-making foundation. He suggested that Liberty Fund become an operating foundation by contracting with people to develop seminars for the foundation (telephone interview, May 2, 1995).

[19. ]“Liberty Fund, Inc., Operating Program 5/1/75 through 4/30/78” (a compilation of activities from May 1975 to April 1978 in the possession of Liberty Fund).

[20. ]Henry Manne, telephone interview, May 2, 1995.

[21. ]Ibid.

[22. ]Letter from Jeanne S. Gessay, Chief, Rulings Section 1, Internal Revenue Service, to Liberty Fund, March 29, 1979 (in the possession of Liberty Fund).

[23. ]A fifth film, about zoning in Houston, Texas, was stopped in production and was never completed or released for viewing. The total production costs of the first three films were $734,828.40: (Adam Smith, $136,731.68; The Industrial Revolution, $310,668.72; Hong Kong, $287,428.00). For a while Modern Talking Picture Service distributed the four films, which are now distributed by Liberty Fund. For additional information about the film series, see “Liberty Fund Films” (in the possession of Liberty Fund).

[24. ]For information about the Liberty Fund Research Seminar series, see copies of memorandums of the projects located in Liberty Fund files, Indianapolis, Indiana.

[25. ]Internal Revenue Code spending requirements result in Liberty Fund spending between 66% and 85% of the minimum investment return, which is 5% of the average market value of the endowment during the year.

[26. ]William C. Dennis, senior program officer, Liberty Fund, interview, October 31, 1996.

[27. ]This observation about Goodrich is based on knowledge gained from many interviews. I also noticed several similarities between Goodrich’s thought and that of one of the great theologians and philosophers of the Middle Ages, Thomas Aquinas. An excellent lecture about Aquinas that summarizes many of the views of this great theologian was given by Michael Novak of the American Enterprise Institute on December 19, 1989. These observations by Novak seem especially appropriate to Goodrich and are summarized as such.

[28. ]Observations made by Michael Novak about Thomas Aquinas’s thought, lecture, American Enterprise Institute, December 19, 1989.

[29. ]For instance, in the 1950s, Goodrich had used month-long stays at an apartment in Montauk, Long Island, to write much of both the Basic Memorandum and the “Education Memorandum.” Letter from Helen Fletcher to author, June 18, 1996. In the foreword, Goodrich lists the people who assisted him with the ideas for the Basic Memorandum: Frank R. Barnett; William H. Brady, Jr.; Richard C. Cornuelle; James L. Doenges, M.D.; F. A. Harper; F. A. Hayek; Ralph Husted; William A. Jahn; Felix Morley; Oskar Piest; Paul L. Poirot; Eugene C. Pulliam, Sr.; Leonard E. Read; Henry Regnery; Irwin H. Reiss; Wilhelm Röpke; B. A. Rogge; John V. Van Sickle; Ludwig von Mises; and David McCord Wright.

[30. ]According to Don E. Welch, a founding board member, Goodrich was very concerned that the forces opposing individual liberty might become so strong in the United States that Liberty Fund might have to move to another country to remain operational (interview, December 16, 1991). See also Basic Memorandum, pt. 3 (Board of Directors—Qualifications, Selection, and Overall Consist, including exhibits III-a and III-b), pp. 59–71.

[31. ]J. Charles King, interview, December 10, 1993.

[32. ]William C. Dennis, interview, October 31, 1996.

[33. ]Letter from Anne C. Lawrason to author, September 20, 1996.

[34. ]See Jeff Swiatek, “Liberty Fund Carries on Founder’s Dream,” Indianapolis Star, May 1, 1988, sec. B, p. 19, col. 3.

[35. ]Directors of the Liberty Fund board in 2000 included T. Alan Russell, chairman, former president of Illinois Cereal Mills, Inc., in Paris, Illinois; Chris L. Talley, treasurer, current president of Peoples Loan and Trust Bank; Manuel F. Ayau, a founder and former rector of the Universidad Francisco Marroquin in Guatemala; Ralph W. Husted, former president of the Indianapolis Power and Light Company and former president of the Indianapolis Public School Board of Education; George B. Martin, president, former chairman of the English department and professor at Wofford College; Roseda Doenges Decker, family friend to Pierre and Enid Goodrich, who was closely involved, with her husband James Doenges, in many aspects of a free society; Edward B. McLean, an attorney and professor of political science at Wabash College; Irwin H. Reiss, former president of Meadowlark Farms; Richard A. Ware, former president of the Earhart Foundation and undersecretary of defense in the Nixon administration; George W. Carey, professor of government, Georgetown University; and Richard W. Duesenberg, visiting professor at St. Louis University Law School and former general counsel of Monsanto Corporation.

[36. ]Quote taken from article by Jeff Swiatek, “Liberty Fund Carries on Founder’s Dream.”

[37. ]Stephen J. Tonsor, interview, December 5, 1992.