63, plus statutory interest. In Continental Illinois Nat'l Bank and Trust Company of Chicago v. United States, 403 F.2d 721, 185 Ct.Cl. 642, (1968), cert. denied, 394 U.S. 973, 89 S. Ct. 1456, 22 L.Ed.2d 752 (1969), we anticipated our decision here. The facts in that case are almost identical to the ones before us except for one important difference that clearly entitles plaintiff to recover.

Furthermore, appellant suggests that Congress could never have intended to indirectly aid governments which might be hostile to United States' interests. We begin by noting that, while tax deductions are allowable only if specifically authorized by the Internal Revenue Code, see Continental Illinois National Bank Trust Co. v. United States, 403 F.2d 721, 725, 185 Ct.Cl. 642 (1968), our analysis must also give due weight to the Congressional policy of solicitude toward charitable bequests. Norris v. Commissioner of Internal Revenue, 134 F.2d 796 (7th Cir. 1943), cert. denied 320 U.S. 756, 64 S.Ct. 63, 88 L.Ed. 450, rehearing denied, 320 U.S. 813, 64 S.Ct. 199, 88 L.Ed. 491 (1943).

The estate tax is not a tax on the property "in the ordinary sense . . . but upon the right to dispose of it;" it is not a tax on property of the beneficiary, but on "the transfer of the estate." Continental Illinois Nat'l Bk. Tr. Co. v. United States, 403 F.2d 721, 728 (Ct.Cl. 1968) (citing United States v. Perkins, 163 U.S. 625, 628 (1896), Y.M.C.A. v. Davis, 264 U.S. 47 (1924)), cert. denied, 394 U.S. 973 (1969). In fact, the Supreme Court has declared that the estate tax is a "tax on the act of the testator, not on the receipt of the property by the legatees."

The estate tax is not a tax on the property "in the ordinary sense . . . but upon the right to dispose of it;" it is not a tax on property of the beneficiary, but on "the transfer of the estate." Continental Illinois Nat'l. Bank Tr. Co. v. United States, 185 Ct.Cl. 642, 403 F.2d 721, 728 (1968) (citing United States v. Perkins, 163 U.S. 625, 628, 16 S.Ct. 1073, 41 L.Ed. 287 (1896), Y.M.C.A. v. Davis, 264 U.S. 47, 44 S.Ct. 291, 68 L.Ed. 558 (1924)), cert. denied, 394 U.S. 973, 89 S.Ct. 1456, 22 L.Ed.2d 752 (1969). In fact, the Supreme Court has declared that the estate tax is a "tax on the act of the testator, not on the receipt of the property by the legatees."

Defendant argues that, since the State of Israel is excluded under Section 2055(a)(1), it is likewise excluded under Sections 2055(a)(2) and (3) under the doctrine of inclusio unius est exclusio alterius, citing as authority Edwards v. Phillips, 373 F.2d 616 (10th Cir.), cert. denied, 389 U.S. 834, 88 S.Ct. 38, 19 L.Ed.2d 94 (1967). However, I find the reasoning in the later case of Continental Ill. Nat'l Bank Trust Co. of Chicago v. United States, 403 F.2d 721, 185 Ct.Cl. 642 (1968), cert. denied, 394 U.S. 973, 89 S.Ct. 1456, 22 L.Ed.2d 752 (1969), more persuasive and in accord with relevant authority. While recognizing that bequests to foreign corporations, associations, and trustees are eligible for the deduction, the Court in Edwards held that a bequest to a Danish School District: "To be used by said school district in any manner it may wish for the betterment of the schools or aid to the students of said district" being fundamentally and primarily a bequest to a political subdivision of Denmark rather than as an American political subdivision as required under Section 2055(a)(1), could not qualify under subparts (2) or (3) absent a showing of Congressional intent to permit bequests to foreign governmental entities for public purposes.

Certiorari denied. Reported below: 185 Ct. Cl. 642, 403 F. 2d 721.

Such a construction seems at odds with Congress' purpose of encouraging charitable contributions, and would arguably eliminate much of the independent effect that subsection (a)(3) may have.See Colautti v. Franklin, 439 U.S. 379, 392, 99 S.Ct. 675, 684, 58 L.Ed.2d 596 (1979); Jarecki v. G. D. Searle Co., 367 U.S. 303, 307-08, 81 S.Ct. 1579, 1582, 6 L.Ed.2d 859 (1961) (Where a statute admits a reasonable construction which gives effect to all of its provisions, the court will not adopt a strained reading which renders one part a mere redundancy.); National Savings and Trust Co. v. United States, 436 F.2d at 461; Continental Illinois National Bank and Trust Co. of Chicago v. United States, 403 F.2d 721, 738 (Ct.Cl. 1968) (Davis, J., dissenting), cert. denied, 394 U.S. 973, 89 S.Ct. 1456, 22 L.Ed.2d 752 (1969). In this regard, we observe that subsection (a)(2) deals with gifts "to or for the use of" charitable organizations.

I always thought it was a fundamental rule of statutory construction that Congress does not legislate needlessly. See Uptagrafft v. United States, 315 F.2d 200, 204 (4th Cir. 1963); Mogis v. Lyman-Richey Sand Gravel Corp., 189 F.2d 130, 141 (8th Cir. 1951); and Continental Ill. Nat'l Bank Trust Co. v. United States, 403 F.2d 721, 724, 185 Ct.Cl. 642 (1968), cert. denied, 394 U.S. 973, 89 S.Ct. 1456, 22 L.Ed.2d 752 (1969). Contrary to the Ninth Circuit's holding, the majority opinion does find "inherent authority" to compel the telephone company's assistance in the area of electronic surveillance.

They point out that subsection (a)(1) is limited to bequests to the United States and its subdivisions exclusively for public purposes while subsection (a)(3) allows a deduction for contributions to trustees for charitable purposes. The Government's proposed canon of construction approach was also rejected in Continental Ill. Nat'l B. T. Co. of Chicago v. United States, 403 F.2d 721, 185 Ct.Cl. 642 (1968), cert. denied, 394 U.S. 973, 89 S.Ct. 1456, 22 L.Ed.2d 752 (1969). There a devise was made to "the mayor and magistratsraete of Fuerth, Bayern, Germany 13a to be used and expended for the benefit of said City the Fuerth."

The argument that the two estates merged and must be regarded as one because Mr. Wood, as the residuary legatee, was the sole beneficiary of Mrs. Wood's estate, ignores the concept that each decedent's estate is a separate entity, as well as the distinction which the courts have made in tax cases between the estate of a decedent and the ultimate legatees. Y.M.C.A. of Columbus, Ohio v. Davis, 264 U.S. 47, 44 S.Ct. 291, 68 L. Ed. 558 (1924); Continental Illinois Nat'l Bank and Trust Co. of Chicago v. United States, 403 F.2d 721, 185 Ct.Cl. 642 (1968), cert. denied, 394 U.S. 973, 89 S.Ct. 1456, 22 L.Ed.2d 752 (Apr. 22, 1969). See also Brewster v. Gage, 280 U.S. 327, 334, 50 S.Ct. 115, 74 L.Ed. 457 (1930), in which the Supreme Court declared that upon the death of a decedent, a legatee has no title or right to any particular personal property except the right to a distributive share of what remains after proper administration.