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.In1937, however, President Roosevelt renewed his request that the Rosen-wald Fund build a school in Warm Springs.The fund s board granted ap-proval of special funding to build the school, and President Rooseveltpersonally dedicated the building.35Tindall notes that the larger impact of the Rosenwald Fund s school-building program was the spark it ignited in providing public financialsupport for African American schools while neutralizing the oppositionof white taxpayers. 36 The fund s contribution to the cost of the programtotaled only 15 percent of the overall building cost, but the program ig-nited local public funding of a majority of the building costs and almostall of the operating expenses of the rural schools.FOUNDING AN INSTITUTION TO RESEARCH PUBLIC POLICYEconomic Policy Research of the Highest Quality:National Bureau of Economic Research (1921)Background.The National Bureau of Economic Research, chartered in1920, was the first economics institute to receive Carnegie Corporationfunds.37 For most of the previous decade, a debate had unfolded, par-ticularly among Rockefeller Foundation officials and observers, aboutthe direction of philanthropic support of economics.One side, led byTheodore Vail of AT&T and joined by John D.Rockefeller Jr.and foun-dation advisor Frederick T.Gates, argued that the public lacked a basicunderstanding of economics and that some provision of economicknowledge, coordinated by what Vail called a publicity bureau, wouldbest resolve the class dispute many capitalists and philanthropists soughtto address.38 Countering this sentiment, many, including economistsEdwin F.Gay of Harvard and Wesley C.Mitchell of Columbia as wellas Jerome Greene of the Rockefeller Institute for Medical Research, feltthat this approach sidestepped the most significant national need moreand better basic economic research.39Mitchell believed that economics research held the same promise forsocial policy that scientific research held for medicine.Gates, wholly9781568487027-text:Layout 1 6/24/09 10:13 AM Page 174174 the foundationcommitted to devoting the maximum possible proportion of Rockefellerphilanthropy to the development of medicine, rejected this analogy.40The Rockefeller Foundation s interest in pursuing economics funding atall, however, was thwarted when the involvement of the foundation inmanaging the public perception of the Ludlow massacre turned thefoundation against social-science research for more than a decade.41Strategy.The Carnegie Corporation of New York first became interestedin supporting economics research in 1916, when Henry Pritchett, atrustee of the Corporation and president of the Carnegie Foundation forthe Advancement of Teaching, proposed support of an effort to spread abasic understanding of economics, a proposal more in tune with Vail andGates than with the economists.The spark behind Pritchett s proposalwas what he perceived as the promulgation of inaccurate information bynewspapers and labor organizers for commercial and political gain.Inparticular, Pritchett criticized the reports of the Committee on IndustrialRelations, which to some degree shared the same interest in publishing itsviews regarding labor-related problems facing the nation s economy.Ac-cordingly, the brunt of his proposal entailed the purchase and endow-ment of a newspaper with the mandate to print truthful information.42After it became clear that the costs of purchasing a newspaper were likelyto be too great for the corporation, the discussion about economics fund-ing was altogether dropped.43Parallel to Pritchett s initiative, the economists initially involved inRockefeller discussions were independently pursuing their interests inan economics research institute devoted to basic research.Gay andMitchell became acquainted with Malcolm Rorty through the Com-mittee on Industrial Relations.Rorty in particular sought a careful analy-sis and determination of the national income to inform possible policydecisions about income distribution.In their discussions, the threeagreed that much disagreement about national economic policy wasrooted less in differing economic interests than in disagreement about ba-sic economic facts.44 Gay s role as director of the Central Bureau of Plan-ning and Statistics during World War I instilled in him a commitmentto seek permanent coordination of federal statistics.Woodrow Wilsondisagreed, however, with Gay s assessment of the value of peacetime sta-tistics coordination, and so the Central Bureau was closed after the war.459781568487027-text:Layout 1 6/24/09 10:13 AM Page 175High-Impact Initiatives: Twelve Case Studies 175In January 1920, Gay and Mitchell joined Rorty to charter the NationalBureau of Economics Research (NBER).46 In an effort to provide cred-ibility and faithfulness to the mission of pursuing pure economic re-search, the NBER organizers placed control in the hands of a board ofdirectors of a politically diverse group of economists, businessmen, andindividuals linked to labor and economic associations.47The Commonwealth Fund was one of the earliest supporters of theNBER, granting $20,000 to the bureau for its first year s operations, but,in accordance with the fund s decision to limit its focus to medicine, itceased its support of the NBER with a second-year $15,000 grant.Thegeneral director of the fund at the time, a Yale historian named Max Far-rand, wrote to new Carnegie Corporation President James Angell inNovember 1920 to seek Corporation support of the NBER.48 The sec-retary of the NBER then wrote to the corporation in December re-questing $45,000 in grant support, which the Corporation granted amonth later after attaching a matching requirement of $20,000.49Pritchett s disagreement with the objectives of the NBER, as they con-flicted with his preference for widespread economics-education effortsover basic research, was likely overwhelmed by Pritchett s desire to sup-port Angell in his efforts to centralize decision-making power and towrest control away from the corporation s secretary and treasurer, JamesBertram.50 When Angell left the corporation after only one year as pres-ident, the NBER appealed to Pritchett in 1921 for further support.Bythis time, Secretary of Commerce Herbert Hoover was seeking a credi-ble private research entity to conduct studies to propose actions to com-bat unemployment.51 In support of NBER funding, Hoover contactedthe Russell Sage Foundation, the Commonwealth Fund, and theCarnegie Corporation, writing to Pritchett on November 18, 1921.Al-though the first two declined to support the NBER to the degree Hooversought, the corporation responded to Hoover s request in February 1922with a $50,000 grant, which the Corporation allowed the NBER to useto satisfy the Corporation s own matching-grant requirement that it hadattached to the first grant
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