REPORT ON FINANCES
Alumni Fund Helps College Balance 1944-45 Books
THE REPORT OF DARTMOUTH'S financial operations for the fiscal year 1944-45 follows what has become a familiar pattern: the Alumni Fund again prevented what would otherwise have been an operating deficit, this time in the sizable amount of $108,624.24. Halsey C. Edgerton '06, Treasurer of the College, also stated in his annual report to the Trustees that the 1945 Alumni Fund, which totaled $337,367.02 and provided a net amount of $318,628.37 after deducting expenses, had contributed an additional $210,004.13 to the Postwar Reconversion Reserve—a fund now totaling $778,563.09. This postwar reserve, created by Trustee direction, has been accumulated in recent years to help in meeting the exigencies of the present reconversion period.
The grand total of Dartmouth College assets on June 30, 1945, stood at $31,243,282.9 a, an increase of $1,041,629.77 or of 3.4% over the 1944 figure which passed the 30-million-dollar mark for the first time in the College's history. This grand total is broken down into plant assets of $7,620,605.76, exclusive of dormitories which are carried on the balance sheet as invest- ments; investment asse'ts of $22,659,220.95; and current assets, including cash, of $963,456.21.
No additions were made during the year to the college plant, which at its present valuation of $7,620,605.76 represents 24.4% of Dartmouth's total assets. If the dormitories and certain service properties carried as investments were added to the plant total it would amount to $10,588,463.77.
Dartmouth's endowment funds and similar funds functioning as endowment totaled $22,208,454.46, or 71.1% of total assets, on June 30. Included with these funds temporarily are the Postwar Reconversion Fund previously mentioned and a Reconversion Special Account of $29,667.93. The increase in the total endowment funds during the year 1944-45 amounted to $853,061.14, including gifts of $149,638.68, the largest of which were $15,596.72 for the J. Lyman and John Belknap Memorial Scholarships, $13,689.50 for the Charles H. Hunkins Scholarships, $lO,OOO each for the Willis Earle Scholarships and Henry M. Putney Memorial Scholarships, and $14,218.59 for the Class of 1920 Memorial Fund, bringing that 25th year fund to $21,212.86. Of the total endowment funds, 72.8% are so established that the principal cannot be used, while 27.2% under certain conditions may be used for purposes other than endowment.
INCOME AND EXPENSES FOR YEAR
Dartmouth's expense and income for the year 1944-45 balanced at $2,261,455.69, a figure only $13,000 less than the previous year's record-breaking total for annual costs. Despite the use of a substantial part of the Alumni Fund and the increase of income from investments, the total of 194445 income was less than for 1943-44, the major reduction being in the amount re ceived from the Navy College Training Program. This latter income for 1944-45 amounted to $981,062.58 as compared with $1,145,246.54 the year before. Income from students was also down, from $151,258.15 in 1943-44 to $133,071.44 in the past year. Income from investments showed a jump of $51,922.42 over the previous year and amounted to $822,160.12.
While total expense for the year was slightly less than for 1943-44, direct costs of instruction, largely faculty salaries, showed an increase of 3% in comparison with the year before. This was offset by a reduction in general expense of 32% and in plant operation and maintenance of 7%. Administrative expense at 11% increased from 10.4% of the year before. Expenditures for the year, with corresponding figures for the year before and also with the percentages of the whole represented by each category, will be found tabulated elsewhere in this article, along with similar figures for the income side of the ledger.
The statement of income and expense is intended primarily to show the operations of Dartmouth College as a teaching institution. It does not include expenditures of the College as a landlord or as a supplier of meals or services except as the net results of such operations enter into the figures. For these associated activities, expenses are deducted from income, or vice versa. This applies to the Dartmouth Dining Association, Hanover Country Club, Clinical Division of the Dartmouth Eye Institute, the Dartmouth Outing Club, and the Council on Student Organizations. The Dartmouth College Athletic Council operates as a separate organization. During the year 1944-45 the Hanover Inn showed a gain from operations of $6,753.. 06 which was carried forward to a special reserve account instead of being added to college income. The Dartmouth Dining Association posted a gain of $930.40 which was applied to write down the Thayer Hall equipment account.
Decline of Investment Returns
The average net return on all Dartmouth investments during 1944-45 was 3.69% as compared with 3.91% the previous year. The rate of return realized was 6.38% on preferred and guaranteed stocks, 4.65% on real estate mortgages, 4-57% on common stocks, 3.38% on bonds, 1.66% on dormitories, 2.90% on other Hanover real estate, and .89% on real estate outside of Hanover. The largest element in the decrease of the over-all rate of return was a reduction in the income from dormitories, several of which were closed during the entire year and some of which produced less than normal income. In view of the rate of return this year, no portion of the income from investments was added to the income equalization reserve.
Of the total book valuation of $22,659,220.95 for all College investments, bonds represent 38.75%, common stocks 34.3%, preferred and guaranteed stocks 6.07%, dormitories 10.28%, other Hanover real estate 4.76%, real estate outside of Hanover 2.28%, real estate mortgages 1-94%, and Tuck School dormitories and refectory 1.61%. In terms of security holdings only, bonds represent 48.9%, common stocks 43.4%, and preferred and guaranteed stocks 7-7%. Security holdings are distributed 20.0% in railroads, 21.4% in public utilities, 27.2% in industrials, 8.7% in mining and oil, 6.8% in financial, and 15.9% in government and municipal bonds. United States Government bonds represent 13.2% of the College's total security holdings and aggregate $2,365,385.
The investment figures used in the financial report are taken at book values, which in practically all cases represent cost at the time of purchase or market value if the securities were received by gift or bequest. At the end of the fiscal year 1944-45, mar" ket values as compared with book values stood at 118%, a rise of 8% over the preceding year.
In concluding his report with a tribute to Dartmouth alumni for their part in the record-breaking 1945 Alumni Fund, Mr. Edgerton wrote: "Superlatives fail me. The Dartmouth College Alumni Fund on the Tucker Foundation has again set a new record. In view of the previous high records this is truly a grand accomplishment. .... The deep gratitude of the official Dartmouth goes out to all the contributors and to all the workers who aided in producing such a wonderful result. There is no escaping the fact that the needs of the future will be even greater than the needs of the past, but with the record of generous loyalty established and maintained by the Dartmouth alumni those responsible for developing the policies of the College may look forward to the future with immeasurable confidence and courage."
In the preparation of his 1944-45 financial report Mr. Edgerton had the major assistance of Max A. Norton '19, Bursar of the College and Assistant Treasurer, and also of Donald L. Barr '18, Assistant Treasurer, who handles the investment portfolio. 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.
AT WORK ON ANOTHER YEAR, Halsey C. Edgerton '06, Treasurer of the College, is shown busily figuring in his Parkhurst Hall office.
