University's Expenses Increase by 7 Per Cent

A rise of seven percent in the University's cost of living during the fiscal year ending last June accompanied an increase of eight percent in the market value of the University's endowment funds, Paul C. Cabot, Treasurer of the Corporation, reported yesterday

The total investment account of the University had a market value of $442,000,000 in June 1955, but increased to a value of $41,800,000 to $44,800,000. Of the endowment increase, $11,000,000 came from new gifts, with the remainder coming largely from capital gains and appreciation.

However, these figures for the University do not totally reflect the College's position relative to last year at this time, since the percent of College expenses met by endowment income decreases steadily each year. In 1921, income from endowment met 47 precent of expenses; in 1956, this figure has dropped to 27 percent.

During this same period, income has doubled, but costs have quadrupled. As a result, other immediate sources of income have come to share a larger portion of the expenses, and in particular, this is one of the reasons for the tuition increases of as much as 25 percent in the College and several of the graduate schools.

Another problem which the University must face each year in meeting its financial obligations stems from the fact that in spite of its deceptively large endowment only 15 percent of this total falls into the category of "unrestricted funds." Most of the endowment income is restricted to such specific purposes as research and scholarships.

"Unresticted funds" are those which permit the University to develop physically and to grow in the areas of research and teaching.

Income and Expenses

The bulk of the University's income came from three main areas: 25 percent from endowment fund, 23 percent from gifts, and 23 percent from tuition, board, lodging and other fees. The three major expenses were salaries of corporation appointees, 27 percent; wages, 31 percent; and equipment and supplies, 19 percent.

Two of the graduate schools exceeded their budget by significant amounts. The Graduate School of Education lost $71,000, ten percent of its total income, while the Divinity School lost $19,000, six percent of its total income.