Louisville, Kentucky

                              Dec. 6th. 1915.

Mr. Henry S, Barker, President,

State University of Kentucky,

Lexington, Kentucky.

Deer Sir:-

     As requested we present herewith a statement of the legal

indebtedness of the State University as of June 30th. 1915, and

an account of the income and expenditures for the bi-ennial per-

iod ended Jkne 30th. 1915.

     Under an act of the Lecislnture dated March 11, 1913, it is

illegal for the State University to contract any obligation when

there is no money Tr Sufficient aonfl -inthkutreaguty---of-;+he Un-

iversity, and no money has been appropriated for the purpose of

the debt. According to information furnished us, the indebtedness

of the University at the time of the passage of the act was

$S7,350.99, and only the excess over this amount is held to be

covered by the law. The Act specifically sanctions as an offset to

the indebtedness any funds in the treasury, and the State Inspector

has permitted the use of accounts receivable and expenses paid in

advance for the same purpose.  Similarly inventories of supplies not

consumed during the year and carried into the next arerproper offset

as being covered by the appropriation for the succeeding period.

     The statement of income and expenditures shows an excess of

expenditures for the two years of some eight thousand dollars; which

is more than offset by the unexpired insurance, interest paid in

advance and inventories of surnlies. Some of the accounts receiv-

able may prove uncollectable, but the marTin of $1852.72, below the
legal am&unt of indebtedness, should be sufficient to take care of