http://www.unc.edu/~unclng/public-d.htm
 
Susan, the above is a link to a page that provides guidelines for understanding copyright basics.  More information on copyright can be gleaned from the archives of the Archives & Archivists listserv.  Be aware that novice archivists don't understand many of the questions and answers, and in many cases the answer is not clear-cut.  My suggestion would be to examine the postings from Peter Hirtle at Cornell's digital program.  He stays on top of the issues and follows them closely. 
 
My understanding of your post is that this is a diary that has never been published. 
 
_If_ it is still under copyright, then copyright is the creator, unless designated otherwise by the creator.  So unless the writer of the diary specified that the copyright (or perhaps "all other rights") were being given to the museum when the deed of gift was drawn up, the copyright would still belong to the author.  Unfortunately, deeds of gift, where they existed in the early twentieth century, tended to be somewhat casual and did not address these issues.
 
The diary may have passed into the public domain.  To determine this you will need the death date of the diary's author.  If the author has been dead for seventy years or more then the diary is now in the public domain.  If it should be in the public domain, the diary may be published by anyone, including the museum.  If it is public domain and the  museum wants to protect its interests it should be aware that the text of the diary may not be copyrighted.  What can be copyrighted are notes, forewards, introductions, epilogues, etc. added by the museum. 
 
There are a great many issues to be addressed here and I would encourage you to please review Peter H's suggested links. The A&A archives may be found at http://listserv.muohio.edu/archives/archives.html
 
Holly Wilhelm Mills
Central Virginia
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