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REPORT
OF THE
Treasurer of Yale University
WITH THE
ACCOUNTS OF ITS SEVERAL DEPARTMENTS
FOR THE
FISCAL YEAR 1906-1907
1907
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INDEX TO ACCOUNTS.
PAOE
Academical Department, Funds 40
Academical Department, Income and Expense 80
Art School, Funds 56
Art School, Income and Expense 98
Botanical Garden 103
Bronson Fund ..30, 35
Bronson Fund, Income and Expense 60, 67
Buildings and Maintenance Department, Income and Expense 74
Consolidated Income and Expense _ 18
Consolidated Statement Bond and Stock Holdings 20
Dining Hall, Income and Expense 72
Forest School, Funds 58
Forest School, Income and Expense 102
Funds and Assets of the University 18
Gifts to Funds ^-.. 14
Gifts to Income 16
Graduate School, Income and Expense 60, 65
Gymnasium, Income and Expense 70
Infirmary, Funds 32
• Infirmary, Income and Expense 72
Law School, Funds 54
Law School, Income and Expense 94
Library, Funds 38
Library, Income and Expense 68
LoomisFund 32, 35
Loomis Fund, Income and Expense 60, 61, 67
Medical School, Funds 56
Medical School, Income and Expense 96
Music School, Funds 58
Music School, Income and Expense 100
Observatory, Income and Expense 70
Peabody Museum 108
Perkins Fund 38
Porter Fund, Income and Expense 80, 87
Professorship Funds 30, 40, 50, 56
Sheffield Scientific School, Funds 46
Sheffield Scientific School, Income and Expense 88
Steam Department, Income and Expense 76
Summer School, Income and Expense 78
Theological School, Funds 50
Theological School, Income and Expense 90
Treasurer in account with Investment balances 78
Treasurer in account with Income balances 104, 106
University Endowment and Extension Fund 13
University, (General) Funds 80
UniveMfflj^ (General) Income and :^xpense 60
^^^^^^ ^20 1908 223318 â„¢*^"^^^''''Sle
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REPORT
OF THE
TREASDREK OF YALE UNIVERSITY.
To the President and Fellows of Yale University :
I have the honor to submit herewith the report of the
Treasurer of the University concerning the operations and
transactions for the fiscal year ending June 30, 1907.
In connection with the Consolidated Statement of Bond and
Stock Holdings (p. 20), which was inserted for the first time
in the report of 1905-06, enlargements have been made
whereby such consolidated statement shows par values, book
values, and conservative market values as of June 30, 1907.
There is also shown the total income for the year from each lot
of securities. The insertion of the income column in this Con-
solidated Statement would seem to render unnecessary the
individual items of interest and dividends in the Income
Account of the several departments.
In the general balance sheet (p. 18), in the Consolidated
Income and Expense Account (p. 18), and in the Account of
the Treasurer with Current Income Balances (p. 104), and
with Accrued Income Balances (p. 106), there are shown, for
purposes of information and comparison, figures for the pre-
vious fiscal year as well as for the current year.
In the report for the year 1905-06 conspicuous reference
was made to an appropriation of $466,804.17 from the Yale
Endowment and Extension Fund for the purpose of elimina-
ting all accrued adverse income and expense balances of the
several departments, amounting to $191,598.09, and of extin-
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4: YALE UNIVERSITY.
guishing the University *(Geiieral) advance to Bi-centennial
buildings, amounting to $265,206.08. In explanation of that
action at the time we stated that such appropriation on our
part " prevents the possibility of increasing the apparent
value of our funds by just that amount, but should we so
increase them our actual financial situation would be no whit
better than by pursuing the course that we have pursued, as
an apparent increase in funds with a corresponding debt per-
mits a better exhibition in theory only and to that extent is
misleading. We have received the money ; the income from
its investment will accrue regardless of our method of hand-
ling the principal ; and it is more important that we should
appropriate it in an endeavor to restore our funds to their
original status rather than that we should technically increase
our funds and thereby continue to suffer the embarrassment
of a large impairment."
That same line of reasoning has prompted us this year to
appropriate from gifts of $402,833.33 to the Yale Endowment
and Extension Fund $187,476.82 to the end of extinguishing
an old advance on account of New Haven real estate actually
in use for University and departmental purposes. In carrying
this real estate in the past it was necessary for tlie University
to temporarily borrow from its funds, but such practice should
be resorted to by us only under extreme stress, and should be
regarded as a temporary expedient and not as an embarrass-
ment to be indefinitely suffered.
For the first time in many years, there is now no unpro-
tected income debit balance in any department, and there are
no funds tied up in unproductive real estate used for Univer-
sity purposes.
In the past it has been our practice to list at par securi-
ties when received or purchased and to place any resulting
credit or debit balance in an account which has been termed
Premium Account. As promised in last year's report, we
have now eliminated entirely this Premium Account, and have
listed our bond and stock holdings literally at book values;
and, therefore, in our tables of University and Departmental
Funds book values alone are shown.
* This term has been adopted to indicate the University account as distinct from
the Institution as a whole.
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In connection with the adjustment of our departmental pre-
mium accounts it may not be amiss to remark somewhat in
detail regarding the transactions. In the University (General)
Account there was a net premium credit of $25,027. Of this
amount $9,218.75 extinguished an advance made several years
ago to the Steam Department for the construction of the
boiler house ; $4,705 was appropriated toward reducing the
book value of railroad bonds on which there has been a default
in interest ; and the balance, $11,103.25, was used to reduce
the book valuation of depreciated real estate located in Chicago
and Minneapolis. A portion of this real estate came to us by
gift.
In the Loomis Fund there was a premium credit of $2,590.32
which was used to extinguish an old debit balance in real
estate account.
In the Library Account there was a real estate credit balance
of $2,262.34 which was used to extinguish an old debit balance
on bonds, to reduce book value on a piece of outlying New
Haven real estate, and to reduce to par valuation on our books
some Traction Company bonds which mature in 1914.
In the Academical Department there was a premium credit
of $23,393.67 and a credit in real estate account (to be
explained later) of $37,504.94. Of these credits $26,555.51
was used to extinguish entirely the net advance to 1905
improvements to Durfee Hall ; $11,044.52 was used to elimi-
nate advance to 1903 repairs to Herrick Hall ; $6,386.30 extin-
guished an advance representing Campus improvements ;
$8,250 eliminated a book account covering real estate already
in use by the Academical Department; and the balance,
$8,662.28, was used to reduce book values on unproductive
real estate situated in the outskirts of New Haven.
In the Sheffield Scientific School there was a premium credit
of $6,616.92, which was used to. reduce the book value of a
productive piece of New Haven real estate.
In the Theological School there was a premium credit of
$6,020.20 and a credit in the real estate account of $3,699.53.
Of these amounts $3,014.75 was used to eliminate a portion of
the advance to 1903 special repairs in Divinity Halls ; $1,204.98
was used to reduce to par valuation on our books a number of
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6 YALE UNIVERSITY.
bonds which will mature in the next few years ; and the bal-
ance, $5,500, was used to revise book values of certain securities.
In the Law School there was a debit balance in real estate
account of $2,719.28. This has been taken care of by a direct
charge to the Law School Income.
In the Forest School there was a premium debit balance of
$190.00 and this amount was charged directly to Forest School
Income.
In endeavoring by meai\6 of all available credit balances to
strengthen our financial condition, we have found it possible
during the last year to provide for all our premium bonds
which mature prior to 1914. Provision for protecting our-
selves against losses on bonds which mature on and after that
date will be made in the future by the establishment of a sink-
ing fund or otherwise.
The appreciable balance standing to the credit of the Aca-
demical Department (referred to above) is due mainly to the
sale of outlying unproductive real estate, in which has rested
for a long time certain funds of that department. This method
of selling, at reasonable prices, such New Haven real estate as
might not be needed for future University development has
been in pursuance of an adopted policy, to which reference
was made in our last report. This policy not only permits the
transfer of certain of our funds from the unproductive to the
income-producing class, but also brings about a transfer of such
real estate to the City's tax list. Receipts from such sales
during the last year aggregated nearly $100,000. The unpro-
ductive real estate of the Academical Department now amounts
to only $23,582.85, most of which represents our interest in
Ingham University, LeEoy, N. Y., part of the Lampson Estate,
and all of which we regard as protected assets. During the
year a transfer from the Academical Department to the Uni-
versity (General) was made of certain real estate which has
long been used for University purposes and whose book value,
representing the original cost, was $72,134.35.
In the Income and Expense Accounts for the year the fol-
lowing departments showed debit balances which needed atten-
tion : the Summer School (1906), the Art School, the Music
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School, and the Forest School. As the Summer School is
possessed of no funds whatever, it has been necessary for the
University (General) to assume that liability, amounting to
$8,787.65 ; and it has also been deemed proper to assist the
Art School, Music School, and Forest School to the extent of
making sufficient appropriation to income to relieve them of
debit obligations on the year's operations, which amounted to
$935.14, $625.15, and $1,852.14 respectively. There was a
deficit of $692.42 in the Infirmary Account, but it is believed
that this with previous accruals will be taken care of independ-
ently. In addition to the appropriations just mentioned,
aggregating $12,200.08, the credit balance of $40,129.77 in
the University (General) Income Account has permitted the
extinguishment of an advance of $23,845 to real estate already
in use for University purposes. This extinguishment by sur-
plus' University (General) Income was eflEected prior to the
larger extinguishment of $187,476.82 from the University
Endowment and Extension Fund referred to on pa^e 13.
The depreciated condition of the bond and stock market
throughout the country has naturally affected seriously the
apparent worth of our investment securities, even though there
has been no reduction in income. On June 30th, 1906, a
reasonable market valuation of our holdings was $253,538.92 in
excess of our book valuation. On June 30th, 1907, the book
value of . our bonds and stocks aggregated $4,809,895.02
while, according to current market reports, their value was
about $4,834,225.60 ; and since that date there has been
a further depreciation of market quotations.
In our investments during the past year we have given
preference to railroad bonds and short-time notes, a few high-
class industrials, and real estate mortgages in New York City
and New Haven. That remains our policy at this time.
Our present net yield from different classes of investments
is as follows :
Personal Notes, 4.87^; Bonds, 4.77^; Stocks, 5.09^; and
Eeal Estate, 5.96^. Average of all classes is 4.91^.
During the year continued work on the Linsly Library
brought that building 'to a point nearing completion June
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YALE DNIVERSITY.
30th, 1907. It is expected that the building will be ready for
occupancy in October. The estate of the late William B. Ross,
whose gift made Linsly Hall possible, has not yet been
settled, but its amount will permit the establishment of a main-
tenance fund exceeding $50,000. The welcome gift of
$40,380 from Mr. William Kent permitted the construction
of a third story to Kent Laboratory, and that work was done
during the college year. Friends of the University interested
in Dwight Hall gave $20,165 to the fitting up of the base-
ment of that building with club and grill rooms, and the suc-
cess of that idea has reflected the wisdom of its generous pro-
moters. Marked improvements were made during the year on
and about both the University and the Academic Campus.
Grateful acknowledgment has been made to Mr. Andrew
Carnegie for his generous promise of $40,000 with which to
construct a swimming pool adjoining the present Gymnasium.
Work performed in connection with this proposed building by
Mr. Everard Thompson and Mr. Ogden M. Reid has been
substantial and is recognized by the authorities.
The total funds of the University for the year 1906-07 have
increased to the extent of $527,545.58 (p. 15), of which
$195,002.38 represents building funds while the balance repre-
sents endowment funds.
The principal items of this increase consist of $52,693.13
from the Tale Alumni Fund Association ; $105,000 from the
estate of the late Ebenezer B. Belden of New York City ;
$100,000, gift of Helen Simpson Seely, Cincinnati, O., in
memory of William Wallace Seely ; $65,356.51, net avail-
able balance of donations to the University Endowment and
Extension Fund (p. 13) ; $45,125, gift of Edward Milner of
Moosup, Conn., to establish the Plainfield Scholarship Fund;
$50,000, an anonymous gift to establish a Medical School Fund
in memory of the late John S. Ely ; $97,534, part of bequest
of the late William B. Ross for Linsly Library ; and $97,-
468.38, bequest of the late William L. McLane to constitute a
fund, which with accruing interest will in time provide for a
building to be known as Haughton Hall.
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treasurer's report. 9
The William W. Farnam Fund, which by its terms has been
cumulative until the amount should aggregate $50,000, has
reached that amount, and the income is now available for
University (General) purposes.
The contributions received to date for the University Endow-
ment and Extension Fund (p. 13) amount to $1,890,333.33 and
evidence the earnest and continued interest that our Alumni
and other friends are taking in this movement.
Gifts to Income aggregated $112,238.60. Deducting the
amounts expended on the buildings, Kent Laboratory and
Dwight Hall, $64,340.99, there is left the net amount of $47,-
897.61. Of this the largest single contribution is that from the
Yale Alumni Fund Association, $25,000.
As to the Income and Expense of the various departments
for the year 1906-07, the reader is referred to the several
Departmental Accounts for detailed information and to
"Treasurer in Account with Current Income Balances" (p.
104) for the general summary.
In the Consolidated Income and Expense Account (p. 19)
the increase in the various items of expense, in comparison
with the previous year, is accounted for in general by Univer-
sity growth and development, but some explanation is advisa-
ble with regard to two items, viz. — " Salaries for Instruction "
and " Care and Maintenance of Plant."
In the former item the previously announced readjustment
and advance in salaries resulted in the following principal
departmental increases, a large portion of which was borne by
the University (General) :
University (General) $22,664.10
Academical Department 4,076. 1
Sheffield Scientific School 8,249.83
Medical School 5,011.68
Summer School 3,581.52
An increase of $6,14:7.50 in the Theological School is due
mainly to the addition of a professor whose salary is provided
by friends of the School ; and an increase of $6,869.73 in the
Law School is due almost wholly to a settlement of old unad-
justed salary accounts prior to 1904:-05.
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10 YALE UNIVERSITY.
In the second item, i. e., " Care and Maintenance of Plant,"
the increase is largely accounted for by extraordinary improve-
ments by University (General) ; by necessary repairs to the
roof of the Gymnasium; by repairs on property at LeRoy,
N. Y., made necessary by fire ; by unusual expenditures in
Sheffield Scientific School ; by a large appropriation by Theo-
logical School toward extinguishment of old advance to
Eepair Account ; and by an appropriation by Medical School
to reduce advance to the Amphitheater.
In this connection the statement is here made that the
care and maintenance of Woolsey Hall far exceeds the
income, the figures for the past year showing $974.40 income
as against $8,110.53 outgo. There is no maintenance fund for
Woolsey Hall, and therefore the yearly loss must be cKargeable
to University (General) Income.
The Dining Hall operations for the year showed a debit
balance of $5,208.67, but this is explained by extraordinary
repairs having been made during the year in the rearrange-
ment and renewal of basement facilities, and by the fact
that the health of the Superintendent was such that he
could not give the affairs of the Hall his undivided atten-
tion. The resignation of Superintendent S. A. Smoke, effec-
tive June 30th, 1907, .resulted in the appointment to the
position of Mr. E. C. Johnson, under whom efficient manage-
ment is confidently expected.
As a matter of information simply, without any comment
thereon, the following table is presented showing the average
income and the average expense per student, in each depart-
ment, for the year 1906-07. Only these explanations need be
made : the University (General) Expenses are divided between
the different departments on the basis of student registration.
The attendance figures are based on the registration of regular
students in the several departments and do not include students
from other departments who may be taking courses for which
inter-departmental adjustments are effected. The cost of in-
struction in the Graduate School is largely borne by the
Academical Department and the Scientific School with which
it is closely allied.
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treasurer's report. 11
Average Average Percentage
Students in Cost Receipts of Receipts
Department. Attendance, per Student, per Student, to Expenses.
Graduate 360 $79.34 $44.99 46.7%
Academical 1,351 326.10 152.89 46.8
Sheffield Scientific 895 276.58 159.29 57.6
Theological 65 698.90 00.0
Law 294 204.64 126.26 61.7
Medical 154 247.26 122.11 49.4
Art 41 353.46 71.97 20.4
Music 87 239.49 133.34 55.6
Forestry 59 446.77 109.65 24.5
All Departments 3,306 $278.89 $133.00 47.6^
While the University is now free from the embarrassment
of having any of its funds invested in unproductive real estate
used for University purposes, it should be borne in mind that
arrangements must soon be made to solve in some wise the
following financial problems witli respect to certain New
Haven real estate :
Sachem's Wood is temporarily held by trustees in the inter-
est of the University. If obligations incident to this trustee-
ship are not shortly assumed by friends, it will undoubtedly be
necessary for the University (General) to itself bear the bur-
den, although it is sincerely hoped that some donor for this
beautiful and vitally important property may yet be found.
Just north of Canner Street on Prospect Street the Observa- .
tory owns a tract of about twenty-six acres. It seems advisa-
ble from a University view-point that this property should not
be sold, but should be retained for future University devel-
opment. If this policy is adhered to, it is only fair to the
Observatory that the University (General) should assume the
burden of carrying the property, and in that event it will be
advisable during the coming year to ejffect a purchase from
the Observatory. By this act the Observatory will be enabled
to pay off its indebtedness to both the University (General) and
the Academical Department, but on the other hand it will
require the University (General) to transfer the amount of the
purchase from income-producing funds to non-income-produc-
ing real estate, which will, of course, be embarrassing.
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12 YALE (JNIVER8ITY.
The University has funds invested in certain improved real
estate which, for the present, is productive but which will
from time to time be required for University purposes. If
provision is not made by a sinking fund or otherwise for tak-