opinion, and second, that the Smithsonian is free to use the proceeds of the Hunterdon gift to support its programs of oceanography, with special emphasis on underwater oceanography.
The Court's subject matter jurisdiction over this matter is found in 28 U.S.C. §§ 1331 and 1345. Venue is proper under 28 U.S.C. § 1391(b).
The factual findings and legal analysis of the Court are set forth in the discussion which follows:
FINDINGS OF FACT
A. The Johnson Gift
The Smithsonian Institution has long been involved in oceanographic undertakings but it was only in the early 1960's that an Oceanographic Sorting Center was established to identify, catalogue, and make available oceanographic specimens from throughout the world. In aid of these underwater endeavors, the Smithsonian has made use of scuba divers and submersibles. Beginning in the mid and late 1960's its oceanographic endeavors were coordinated by Dr. I. Eugene Wallen, as Director of Oceanography and Limnology, and later as Director of the Department of Science. As Assistant Director of Oceanography for the Museum of Natural History, he established the Smithsonian's Sorting Center and in his various capacities, he assumed responsibility for seeking and negotiating contracts, gifts, and grants for oceanography.
In 1963, Dr. Wallen met Edwin A. Link, the noted engineer and inventor, who at the time was designing submersibles and other devices for underwater research. Mr. Link was the inventor of the Link Trainer, a device used to train airplane pilots during World War II. Because of their shared interests, the two collaborated on several Smithsonian projects making use of the submersibles and underwater devices designed by Mr. Link.
J. Seward Johnson and Link were friends and it was through this association that Mr. Johnson became interested in the work of the Smithsonian and later was introduced to Dr. Wallen. Shortly thereafter, in the period 1968-1969, he participated financially and otherwise in several of the Smithsonian's oceanographic projects. In these projects, use was made of a submersible and other equipment designed and developed by Mr. Link.
Subsequently Dr. Wallen and Mr. Link discussed the possibility that Link might develop a submersible for use of the Smithsonian which lacked one of its own. The submersible would be revolutionary in design, having an acrylic sphere to provide unobstructed vision for the pilot and observer and a "lock-out" chamber permitting divers to leave the vehicle while it was submerged. Such direct access to the underwater environment would permit divers to gather specimens which could not be collected by traditional means such as by use of drag nets.
Mr. Johnson, after learning of such plans, became interested in and expressed a desire to participate in development of the submersible. Mr. Link then suggested to his friend that he make a gift to the Smithsonian with instructions that it be used to develop the submersible.
In June, 1969, Mr. Johnson transferred to the Smithsonian a block of Johnson & Johnson stock worth approximately $ 200,000, to be used for underwater research projects. He suggested to Dr. Wallen that the gift be used in part to construct the submersible in which he and Mr. Link were interested.
In September, 1969, partly at the urging of Dr. Wallen, he decided to make a substantially larger gift. In planning the gift, he was of course mindful of its tax consequences. To preserve his unlimited charitable deduction Mr. Johnson was required to donate a sizeable percentage of his net income to charity each year. Tax considerations also required that his gifts be completed quickly, before the end of that year, and he therefore had to act within a matter of months.
On September 26, Seward Johnson and his attorney, Mr. Robert H. Myers, met informally with Smithsonian officials to discuss a substantially larger gift which Mr. Johnson had under consideration. Smithsonian officials in attendance were Dr. Wallen; Dr. Sidney Galler, then Assistant Secretary for Science; T. Ames Wheeler, Treasurer; and Peter G. Powers, General Counsel. Ms. Iryne Black, a lawyer on Mr. Powers' staff, was also present. Mr. Ripley did not attend.
No agenda was prepared for the meeting. The general outlines of the proposed gift of Johnson & Johnson stock were developed, but the amount of the donation and any specific restrictions were not established. Following the meeting, Mr. Myers served as a liaison between the Smithsonian and Mr. Johnson in working out the details, specific language and terms of the proposed gift.
Immediately thereafter, on September 30, Mr. Johnson informed Morgan Guaranty Trust Company that he would shortly advise them to transfer a specified number of shares of Johnson & Johnson stock to the Smithsonian. He instructed Morgan Guaranty in making the transfer to advise the Smithsonian that the transfer was "for the purposes and uses agreed to by the Smithsonian Institution and (Mr. Johnson) at a conference . . . on . . . September 26, 1969, and that the details of the grant are in the hands of respective counsel."
Morgan Guaranty forwarded a certificate for 14,500 shares of Johnson & Johnson stock to the Smithsonian's Treasurer, T. Ames Wheeler, on October 3, and referred to the "purposes and uses" agreed to at the September 26 meeting and the fact that the details were in the hands of respective counsel as directed by Mr. Johnson.
Mr. Wheeler's October 8 letter of acknowledgment recognized that the restrictions on the gift had not yet been established, noting that the stock represented "a gift by Mr. J. Seward Johnson to the Smithsonian Institution for purposes being designated by Mr. Johnson."
It was clearly understood at that time by the Smithsonian, that the purposes of and restrictions on the gift of stock, then valued at approximately $ 2 million, had not yet been formally designated by Mr. Johnson but would be forthcoming.
During this period, Mr. Myers and Dr. Wallen had a number of discussions regarding the gift. The Smithsonian's General Counsel did not participate in these discussions. While Dr. Wallen made suggestions and had an input in the language used in the gift instrument, he did not make any demands or insist that any particular terminology or form be used. He and the Smithsonian were clearly anxious to secure the gift of stock and were willing to accept the terms imposed by Mr. Johnson.
On October 17, 1969, Seward Johnson sent a letter, drafted with his attorney's assistance, to Mr. Ripley, setting forth his intentions in making the gift. The letter, noting that the gift was an outgrowth of the September 26 meeting, directed:
(1) that the principal of the gift "shall generally be kept intact;"
(2) that the income "be used in the first instance in assuring the successful completion and operation of the research submersible vehicle being given separately by Edwin A. Link and myself;"