Financial Report
Trustees Hear SummaryOf Year Ended June 30
AT THE FALL MEETING of the Dartmouth Board of Trustees on October 14, Halsey C. Edgerton '06, retired Treasurer of the College, presented the thirty-third and last in the long series of annual reports he has made on the financial condition of the College.
His summary for the 1948-49 fiscal year, ended June 30, showed total Dartmouth assets of $35,321,451.24 and a balancing of income and expense for the year at $3,345,179.55. Both figures were the highest in the history of the College, total assets representing a gain of $313,129.49 or 1% and the total of operating costs representing an increase of $226,447.84 or 7.3% over the previous year.
In order to balance its books for 1948-49, Mr. Edgerton reported, the College used the entire net of the 1949 Alumni Fund, amounting to $351,273.06 after the deduction of campaign expenses, and also applied $75,596.26 of income from the Clarence B. Little Trust. The latter trust, established by bequest of the late Dartmouth Trustee and member of the Class of 1881, has accumulated income not paid over to the College in the actual years of accrual and therefore held as a fund functioning as endowment. It is expected that in the future the amount accruing will be currently available for unrestricted use.
As shown on the accompanying table of income and expense, the greatest increase in costs this past year occurred in connection with scholarship aid, which jumped $70,465 or 72.7% as the College felt the effect of the decreasing proportion of students receiving G. I. benefits. Higher costs affected every classification except libraries.
STUDENT FEES ONLY SLIGHTLY HIGHER
On the income side, the net return on investments amounted to 1895,271.24 and was up $68,672 or 8.3% over the year before. The fee charged students during 1948-49 was $50 higher, but with fewer students enrolled and no summer session receipts as there were in 1947, the total of income from this source was only $35,748 greater. Direct instructional costs alone increased slightly more than that. Gifts for current use, including the Alumni Fund, were nearly $60,000 higher than in 1947-48.
Student fees represented 50.66% of total income for the year, while net income from investments produced 26.76%, gifts 15.54% and miscellaneous income 7.03%. Instructional costs, including the library, represented 58.72% of expenses for the year, with plant operation and maintenance costing 11.79% of the total, administration 10.86%, scholarships 5%, health service 4.42%, general 6.42% and restricted current funds 2.79%. These percentages, as well as the figures presented above, are based on the operations of Dartmouth College as a teaching institution, without inclusion of income and expenditures of the College as a landlord or a supplier of meals and services except as the net results of such operations entered into the year's total of $3,345,179.55. These net figures apply in the cases of the Dartmouth Dining Association, Hanover Inn. Dartmouth Outing Club, Hanover Country Club and Council on Student Organizations.
STOCKS PRODUCE HIGHER INCOME
The average net return for the year on all investments was 4.25% compared with 3.96% the previous year. On security investments as distinguished from total investments, the average return was 4.66% as compared with 4.33%. "The improvement in rate," Mr. Edgerton reported, "was due largely to the better return on common stocks, accompanied by a slightly better yield on bonds and an improvement in the return on dormitories following the increased dormitory rentals which went into effect this year. The return on real estate mortgages (5.73%) was abnormally high as a result of the inclusion of some back interest collected during the year. Income on Hanover real estate (1.26%) is still inadequate."
The total investments of the College, amounting to $26,193,396.17, are 42.31% in bonds, 34.82% in common stocks, 4.02% in preferred and guaranteed stocks, 1.55% in real estate mortgages, 8.89% in dormitories, 5.36% in Hanover real estate, 1.61% in real estate outside of Hanover, and 1.44% in other investments.
PUBLIC UTILITIES LEAD SECURITIES
The distribution of security investments, totaling $21,251,889, is 25.1% in public utilities, 24.7% in industrials, 18.6% in governments, 16.5% in railroads, 8.5% in mining and oil, and 6.6% in financial. This distribution does not depict accurately the investment policy of the College, Mr. Edgerton explained, for "at any given time the list of investments of institutions which receive their funds as the result of the generosity of benefactors usually includes some securities which have been given in an invested form and which for one reason or another are continued in the holding of the institution. Dartmouth is no exception."
The investment totals and rates of return given are based on book values, listed normally at cost at the time of purchase or market value if the securities were received from gifts or bequests. At the end of the fiscal year, market value was 100.6% of book value as compared with 107% for the preceding year. This slight excess in market value amounted to$121,708.
PLANT WORTH 11 MILLION
The Dartmouth balance sheet on June 30 carried plant assets at $8,230,287.71 or 23.3% of the total assets. This figure does not include dormitories or certain service properties which are carried as investments of endowment funds. With these properties included, the plant total is $11,255,177.71.
No substantial additions to the college plant were made during 1948-49. A shop addition to Wilder Hall added $53,300 to plant assets. Mr. Edgerton reported that the new Hanover Inn kitchen had been handled as an investment of associated funds and also that during the year the College had taken over full responsibility for the 200 Wigwam Circle housing units erected by the government for veterans. The College had a small gain from their operation during the year but had an operating loss from Sachem Village after the usual write-down for depreciation. Dartmouth's investment in the latter stood at $148,631.09 at the close of the year. In the Associated Funds there was also an accumulation of gain in excess of losses amounting to $203,827.74.
In order to finance that portion of the Thayer School additions not covered by the Cummings Memorial Fund, the College at the close of the year transferred 24 unrestricted funds of varying amounts, aggregating $222,436.54, from the Unrestricted Funds Functioning as Endowment to the Plant category.
ENDOWMENT FUNDS EXCEED 26 MILLION
The grand total of endowment funds and unrestricted funds functioning as endowment was $26,178,455.94 on June 30. The net increase for the year, after the Thayer School transfer, was $320,216.55. The largest single addition was $102,700 received on account of the bequest from the late William Nelson Cromwell.
The Hopkins War Memorial Program Fund, including the money contributed toward the proposed Hopkins Center, is carried for the present under Funds Functioning as Endowment. The receipts during the year amounted to $113,934.05 and brought the grand total to $1,618,849.94.
In concluding his report with a summary of the 1949 Alumni Fund, Mr. Edgerton said, "As my last official act as Treasurer for Dartmouth College I wish to record the deep gratitude of Dirtmouth College to all the contributors and the many workers who have demonstrated that giving to their College was not a burden but an opportunity."
Printed copies of the financial report for 1948-49, containing detailed schedules of assets and of income and expense for the year, may be obtained by writing to the Office of the Treasurer, Parkhurst Hall, Hanover, N. H.
