Evening star., 1932-04-10
NATIONS COLLEGES SHOW
EFFECTS OF DEPRESSION
Securities i'm Which Endowment Funds
Are Invested All Suffer.
Survey Shows.

the last fiscal year than in the previous
fiscal year and 126 received less than
in the previous year.
These reports here summarized, il
must be remembered cover the fiscal
year ending in June, 1881, or not later
than few months thereafter. We all
know that losses in the year now run
ming will be greater still The severity
OF the depression came upon educa-
tional institutions later than the period
covered by these reports. The greatest
default in income occurred in the Fall
of 1881 and the opening of 1882 For
these periods there are no inclusive
statements yet assembled.
Institutions Threatened.
Information has come to the COM
mission concerning quite a number of
institutions. chiefly small ones, which
are suffering so severely from losses of
income and capital as to threaten their
existence. 1t is undoubtedly desirable
that certain of the weaker institutions
of the country, which are weak largely
because they are not well located
should combine with other institutions
in the same or nearby community The
stress and strain of these days have
given some movement to mergers. A
college, however, will sometimes con-
tinue existence when it is practically
bankrupt, as the following concrete in
stance, though without the use of
names, evidences:
A college mortgaged its entire phys
ical plant sold bonds represented by
the mortgage among its friends. and
then used the proceeds of the bonds
for debts and running expenses. That
Institution, strictly speaking, has finan-
cially "eaten itself up and yet the
bondholders do not proceed to fore
close the mortgage. the faculty works
for decreased salaries, the students pay
increased tuition and friends of the
college contribute to its support. In
this connection, one naturally raises
the question of what value is the en-
tire plant of an educational institu-
tion in the open market when offered
as security for loan, and where can
a market for such property be found?
Burden Affects Teaching.
Not only have the smaller institu-
tlons been severely shaken, but also
some of the very largest and most Sc
cure educational institutions of our
country have been obliged to limit
their activities and in some instances
Jeopardize their efficiency by the neces-
sity of taking cuts throughout all de-
partmentS, in some instances running
as high as 20 per cent. One inStitu-
tlon, for example, has a diminution of
income Of about 100000. Spreading
through very large budget, this does
not appear as an extremely large per-
centage of shrinkage.
Hardships, however, arise because,
IN general, the place where economy
can be best applied is usually in the
salary list. Certain charges for the
maintenance of buildings, for heating
and lights and other mechanical oper-
atoms cannot at once be materially
leSsened. In one large institution cur
tallments in each department have
been ordered equaling 20 per cent of
the departments budget This may
mean, in some instances, that the last
MEMBER OF the teaching staff taken on
must be dismissed.
OnSetting drastic reductions required
IN some institutions, the depression has
actually brought to some other institu-
t1ons a positive relief in the outgo of
funds and shows actual profit and oain
For example, here is this concrete case:
An institution which had in hand more
than year ago a fund of $500, 600 for
new building finds now, after waiting
for drop in prices, that 1t can write
all of its contracts covering the cost of
an even better building than at first
was planned which will aggregate a
total of less than $780, 900, a clear saw
ing to that institution of 100000, oc-
casioned by the drop in the cost of
construction due to the depression.
Another institution in another part
If the country proposed to erect build
ing which it was supposed would cost
from $250.00 to 100000, and now con-
tracts can be placed which will provide
that building at something less than
100000 "A
Ths connnission IA rs study xewe6