FINANCIAL REPORT

First Operating Surplus in Many Years Disclosed

IN HIS ANNUAL FINANCIAL REPORT tO the Trustees, Halsey C. Edgerton 'O6, treasurer of the College, last month had the pleasure of reporting that for the first time in many years Dartmouth had been able to close its accounts with a balance of income in" excess of expenses without recourse to the Alumni Fund. This operating surplus was small, amounting to $7,089.16, but it made possible the realization of the objective of allocating the entire proceeds of the 1944 Alumni Fund to the Postwar Reconversion Reserve, which received both the College surplus and the Alumni Fund net of $266,951.08 and thereby rose to its present total of $547,955.82. The postwar reserve is being accumulated, by Trustee direction, in order to meet the exigencies of reconversion, which President Hopkins has estimated will cost between one and two million dollars.

The treasurer's report for the fiscal year which ended June 30, 1944, also disclosed that Dartmouth's total assets rose above the 30-million-dollar mark for the first time. The present figure of $30,201,653.15 represents a gain of 11,592,835.81 or 5.5% over the total of the year before, and is broken down into 17,631,526.16 for Plant (exclusive of dormitories, carried as investments), $21,818,982.35 for Investments, and $751,144.64 Current Assets. Dartmouth's endowment and similar funds now aggregate $21,355,393.32, an increase for the year of $1,640,117.58, including the Postwar Reconversion. Reserve transferred to this classification for temporary investment. The largest addition to the funds was a distribution on account of the unrestricted bequest of Sherman B. Ward 'l3, from whose estate the College received $450,000 during the year. An anonymous benefactor completed the payment of a pledge made several years ago, increasing his fund by $161,000; and Fred A. Walker 'BB established the Walker Memorial Fund by a gift of $40,000.

INCOME AND EXPENSE

Operating expenses for 1943-44 were the highest in the College's history and, exclusive of expenses of dormitories and dining facilities, aggregated $3,367,729.77, an increase of some 16% over the preceding year. Year-round operation under the Navy V-12 Program brought about increases in all the major classifications, except health service and general expense. The favorable result for the year was made possible, how- ever, by the Navy's use of the major part of the College's facilities for the full twelve months. While under the Navy contract no profit was paid and some costs were not considered part of the Navy program, income from the government did amount to $1,145,246.54, or 50.3% of the year's receipts. This compares with $82,606.00 received from the Navy and Army the year before.

Under its contract with the Navy, Dartmouth provided instruction, housing and messing for the V-12 Unit, which started July 1, 1943, with an enrollment of 2,000 men, the largest V-12 unit in the country. The remuneration to the College covered the services of the faculty, an allowance for instructional supplies and depreciation on instructional equipment, small allowances for use of the library and for administrative costs, and reimbursement for use of the dormitories and for messing costs, the latter without profit or loss but including an allowance for depreciation on equipment. Arrangements with the Navy covering the current fiscal year have not been completed, but with a 36% reduction in the size of the Dartmouth V-12 Unit, effective November 1, and a further expected reduction March 1, the financial picture for 1944-45 will be far different from that of the year ended.

In addition to the major item of income from the Navy this past year, Dartmouth's investments produced net income of $770,236.70, representing 33.9% of total receipts and an increase of $31,074.41 over the previous year. These two items served to offset a drop in student income from $891,044.32 to $151,258.15 and to produce the favorable over-all results reported by Mr. Edgerton. Among the expense classifications for 1943-44 that of Restricted Current Funds amounted to $159,892.83 and is substantially larger than usual inasmuch as the income of various endowment funds could not be expended in accordance with the terms of restricted gifts and hence was reserved for expenditure in later years. Scholarship funds represented the largest item in this restricted group.

The average net return for all of Dartmouth's investments during 1943-44 was 3.91% as compared with 3.74% for the previous year. '

The rate of return realized on investments was 6.30% on preferred and guaranteed stocks, 5.54% on real estate mortgages, 4-67% on common stocks, 3.72% on bonds, 2.81% on dormitories, 2.51% on other Hanover real estate and .76% on real estate outside of Hanover.

Of the total book valuation of $21,818,982.35 for all College investments, bonds represent 36.67%, common stocks 33.66%, preferred and guaranteed stocks 7-43%, dormitories 10.67%, other Hanover real estate 5.05%, and real estate mortgages 2.07%. In terms of security holdings only, bonds represent 47.2%, common stocks 43.3%, and preferred and guaranteed stocks 9.5%. Security holdings are 26.7% in industrials, 23.2% in public utilities, 21.2% in railroads, 12.4% in government and municipal bonds, 9.3% in mining and oil, and 7.2% in financial. This investment list at any given time does not clearly reflect the investment policy of the College, Mr. Edgerton points out in his report, because of the fact that many security holdings are acquired through bequests or gifts and are for various reasons retained for a time.

The treasurer's report for 1943-44 closes with a tribute to Dartmouth alumni for the incomparable results of the 1944 Alumni Fund which, added to the remark- able 1943 Fund, has greatly enhanced the College's ability to meet the unknown financial problems of the approaching reconversion period. "No words are adequate," Mr. Edgerton declares, "to express proper appreciation of this truly magnificent showing made by the Dartmouth alumni."

In the preparation of the 1943-44 financial report, a large part of the responsibility was shared by Max A. Norton '19, bursar and assistant treasurer, with the investment portfolio being handled by Donald L. Barr '18, assistant treasurer. Printed copies of the complete report are available upon application and may be obtained by writing to the Treasurer's Office, Dartmouth \College, Hanover, N. H.

COLLEGE TREASURER, Halsey C. Edgerton '06, whose annual report was made last month, shown reviewing V-12 trainees with visiting officers of the First Naval District.