Financial Report for 1938-39
With Vital Assistance of Alumni Fund College Again Closes Operating Accounts Without Deficit
IN THEIR ANNUAL report to the Trustees, Halsey C. Edgerton 'O6, treasurer of the College, and Max A. Norton 'l9, bursar, last month revealed that, thanks to the Alumni Fund, the College in 1938-39 had once again been able to close its operating accounts without carrying forward a deficit. Without the unrestricted monies provided by the Fund the College would have had an operating deficit of $81,271.23 and would not have been able to apply an additional $24,- 009.47 toward the Dartmouth Hall reconstruction account. The balance on the latter has now been reduced to $27,078.27, a total of $95,333.74 from Alumni Funds having been applied toward the reconstruction cost.
Total expenses for the year of $1,901,- 602.75 did not vary greatly from the previous year's total, which was $6,566.26 higher. Income from students, amounting to $985,942.34 after the deduction of scholarship aid, increased over that of the preceding year by $5,383.86 and represented slightly more than half of the total costs of operation. Direct* instructional costs, including the library, amounted to 63% of the total operating expense.
INVESTMENT INCOME REMAINS SAME
Income from investments during 1938-39 was almost identical with that of the previous year, being only $894.31 less. The sum of $10,875 was set aside for the Income Equalization Reserve in comparison with $24,125 last year, so that net investment income applied toward operating expenses was $12,355.79 greater than in the preceding year. The Income Equalization Reserve was established by the Board of Trustees last year as a means of offsetting decreased dividends in unfavorable years. Income under miscellaneous was $8,687.35 greater, but gifts received during the year were $32,993.26 below the total for 1937-38.
Below is a table of the income and expense for the year on a per student basis. Although subject to qualification, since students are not directly involved in all the expenses of the College, the table is nevertheless presented as a graphic explanation of the year's financing.
The average net return on all College investments was 3.87% as compared with 3.95% the previous year. The rate of return realized was 5.02% on preferred stocks, 3.97% on bonds, 3.53% on Hanover real estate, 3.23% on common stocks, and 1.71% on real estate outside of Hanover.
Changes in the portfolio of security investments included a further reduction in railroad holdings, representing principally the sale of issues from which no income was being received, and increases in public utility and industrial issues. Bank stock holdings, which the treasurer's report described as somewhat disproportionate, were also reduced to some extent, as were foreign government obligations. The relative investments in stocks as compared with bonds did not undergo any substantial change during the year, nor was there any material alteration in the proportion between common and preferred stocks.
The book value of the College's stock and bond holdings is listed at $13,104,465, which total largely represents cost. At the end of the fiscal year market values on bonds amounted to 89% of book value, on preferred stocks 94% of book value, and on common stocks 62% of book value. This does not vary materially from the situation last year.
The grand total of College assets is carried on the balance sheet at $25,223,- 169.15, representing an increase over the previous year of $598,838.62 or approximately 2%. The educational plant is carried at $7,472,143.23, an increase for the year of $211,830.86. If the plant figure included the dormitories and certain service properties carried as investments of endowment funds, it would total $10,326,- 367.74- The plant increase included certain adjustments in the valuations at which existing buildings are carried on the books, amounting to $88,384.94, and the expenditure of $96,475.40 on the new building for the Thayer School of Civil Engineering.
The present total of Dartmouth's endowment and reserve funds is $17,780,639.44, a net increase during the year of $487,184.06 or 2.8%. Gifts for endowment and funds being handled for the present as endowment aggregated $568,940.54. During the years there was received in partial settlement of the Albert O. Brown estate, of which the College is residuary legatee, $469,061.38. Losses realized on sales of investments in Associated Endowments, handled through the profit and loss account, exceeded gains by $196,290.64; while gains in the Separately Invested Endowments, where profit and loss are handled by increasing or reducing the principals of the funds, exceeded losses by $16,012.71.
In concluding his introduction to the report Mr. Edgerton paid tribute to the Alumni Fund and its significance to College financing. "The Alumni Fund," he stated, "during its first quarter century, has been of incalculable value to the College. With such a record of accomplishment the prospects for the future certainly look brighter. With the younger classes already making enviable records in percentage of contributors and in the size of their contributions, with the numbers of alumni steadily increasing, and with the older classes so loyal and generous, we can face the future with confidence. The continuing success of the Fund is an unfailing inspiration to the officers of the College."
Printed copies of the complete Financial Report for 1938-39 are available without charge. Alumni not already on the mailing list may obtain copies by sending a request to the Treasurer's Office.
