CITIES / PHILADELPHIA : Ben Franklin’s Gift Keeps on Giving : Citizen outrage rules out partying as municipalities and two states wrestle with appropriate ways to spend his 200-year-old, $7-million bequest.

This city owes much to Benjamin Franklin, including the first library, the first hospital, street lights and the academy that grew into the University of Pennsylvania. And, when he died 200 years ago today, he left Philadelphia one final gift--1,000 pounds sterling, worth around $4,000 in the currency of the new republic. Franklin made a similar bequest to Boston, his birthplace.

Now, the use of his bequest is turning into a test of how well Franklin’s values have survived.

Under Franklin’s directions, the money was to be used for 200 years following his death to make loans to young apprentices seeking a start in business. Such a loan from two benefactors had given Franklin his start as a printer.

Changing times rendered Franklin’s idea impractical, so the cities adapted it. Boston, for example, has since 1960 made loans to 7,000 medical students from the fund.

But after two centuries his will releases the money to the two cities and their respective states to do with as they please. And, despite less-than-attentive management of the obscure fund, Philadelphia, Boston, Pennsylvania and Massachusetts stand to come into a total of $7 million.

So what noble purpose might befit the last wishes of a man who had so many good ideas of his own?

The first idea that came to mind at Philadelphia City Hall: splashy annual parties that would draw tourists, such as the Freedom Festival and Festival of Firsts.

Although Franklin liked a good time as much as the next Philadelphian--maybe more--many were outraged by the way the city planned to honor his memory and intentions.

“He would have been shocked. It was so outrageous,” said historian Edwin Wolf, librarian emeritus of the Library Company of Philadelphia, founded by Franklin.

In the resulting uproar, Mayor W. Wilson Goode appointed a panel of Franklin scholars to collect ideas and make another recommendation. Committee Chairman Whitfield J. Bell says a recommendation will be made soon.

More than half of the suggestions, he said, dealt with education in one form or another, ranging from repairing the roof of a public library branch to offering scholarships.

Franklin might have liked that, judging from how he spent his own money.

When his sister asked for 25 pounds to help buy a new church bell for her town, Franklin sent the money but directed that it be used instead to buy books to start a library.

“I prefer sense to sound,” he told her.