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REPORT OF COMMITTEE.

At the called meeting of the Board of Curators of Kentucky University,
held on the 27th and 28th days of December, 1876, the following resolution
was unanimously adopted:

“Resolved, That a committee of five be appointed to examine, thoroughly,
all of the documents,books, and reports of all the officers, agents, and amena—
bles of Kentucky University since its organization, and ascertain and report
the exact financial condition, and the exact financial history of the Univer-
sity, and make such recommendations as may seem necessary to liquidate
the debts of the University, increase its income, and secure an efiicient oper—
ation of all its departments; and to this committee all ofiicers of the Univ
versity are hereby ordered to give free access to all books and papers in their
possession.”

“The said committee are directed to confer with such donors or committee
of donors as may request conference. They will also confer with the Exec-
utive Committee, and, if they think proper, with the Board of Visitors of
the State. They will report fully at the next meeting of the Board, and to
this committee is referred the communication of Evan T. Warner, W. S.
McChesney, and J W. Patterson, a committee of donors, with directions to
confer with them, and furnish them access to the books and accounts of the
University.” ‘

“The committee is given power to employ such accountants as they may
deem necessary, and the Treasurer is directed to pay such accountant upon
the written order of the committee.”

The undersigned committee, appointed under the foregoing resolution, beg
leave to submit the following report:

That in pursuance of the powers conferred on them by the foregoing res—
olution, they met on the 30th day of January, 1877, all being present except
R. R. Sloan, and organized with Andrew Steele as chairman, and W. L.
\Villiams as secretary.

On the part of the committee of donors, Evan T. Warner and W. S. Mc—
Chesney, were present by invitation, and your committee adopted the fol«
lowing resolution: .

“Resolved, That the committee of donors co—operate fully with us in our
investigations, in selecting proper persons to make a thorough imr'estigation
of the books and papers of Kentucky University, and rendering us all the
assistance in their power to this end, but not to vote upon any question.”

At a subsequent meeting, the joint committee, after full conference, unan-
imously selected Mr. B. L. Swope, of the city of Louisville, as the account-
ant, to make an examination and exhibit of the books of the General Agent
and the Treasurers.

Mr. Swope was accordingly employed, and on the 7th day of March, 1877,
entered on the discharge of the duties imposed on him, under written in—
structions from this committee, which instructions are set out in his report
to us.

He worked diligently on the books, and finally completed his labors, and
made his report to this committee on the 23d day of August, 1877, which
report was received and approved by this committee, and is hereto appended
and made a part hereof.

 

  

 

[2]

The report of Mr. Swope, with accompanying documents B, C, D,.E_, F,
G, Ii, amt i, also a complete set of new books, compiled from the original
entries made in the old books, and a book of balances and statistics from the
organization of the University to the 3ISt day of May, 1877, are herew1th
furnished to the Board for their information.

Your comnittee, in submitting Mr. Swope’s report and books, in order
that the Board of Curators may be placed in possession of the-facts, state
that General Agent and Treasurer Bowman positively declined to have his
vouchers examined by the chairman of this committee, or that the chairman
should be present and criticise or objec’ to any voucher or vouchers while
Mr. Swope was checking them oil, and hence Mr. Swope was limited to
seeing that the amount of any voucher, or paper purporting to be a voucher,
presented by the Treasurer, corresponded with the amount entered on his
books. Your committee also state that “the General Agent” and Treasurer,
f. B. Bowman, p0sz'z‘z'vcly declined to permit Mr. Swope to examine and com—
pare the notes in his possession belonging to the University with the entries
made on the Treasurer’s books.

Mr. Swope made at least two written applications to him to produce and
exibit these notes for examination and comparison with entries on his books.
Hence the Board of Curators will understand that the results arrived at by
Mr. Swope, so far as the General Agent and TreasurerJ. B. Bowman’s ac—
counts are concerned, are based solely on the original entries made in his
books, with simply a correction of such errors as were apparent on the face
of the entries——err rs of omission, errors in the amounts of vouchers, and
errors in addition. ,

When Mr. Swope’s labors were approaching completion, in order that
every possible means of testing his work might. be emplOyed, and thus cor—
recting errors, should any be found therein. at the instance of a memoer of
this committee, Major E D. Luxton, who for some years had kept the books,
and Prof. Perrin, who, with the assistance of Major Luxton, had, in 1874,
made what purported to be an abstract of them, were invited to confer with
Mr. Swope, and to examine his work and point out any errors therein, or
give any information in their possession that might aid him in his work.

h’lr. Swope cheerfully consented to this arrangement, and Prof. Perrin
and Major Luxton had numerous interviews with him, and examined his
work. The information given by them to Mr. Swope, did not result in
any material change ofhis work, and the result is fully stated in Mr. Swope’s
report to this committee. Prof. Perrin sent to the committee divers memo—
randums, which seem to have been chiefly taken from his work, which are
herewith transmitted for the information of the Board. '

Financial History of Kentucky University.

The resolution of the Board of Curators under which this Committee is
acting, requires us “to ascertain and report the exact Financial History OI
the University.”

‘Ne proceed now to discharge, to the best of'our ability, this duty, after a
careful examination of the books of the Treasurers, Mr. Swope’s compilation
ofa new set of books, and various reports made by the Financial oflicers or
the Institution, from its organization to the 31st day of May, 1877. The
Financial History is chiefly embraced in the Endowment, the Apparatus,
the Agricultural and Mechanical College, and the Real Estate and Build—
ing Funds: and the manner in which these several Funds have been
managed and controlled, and the income arising therefrom has been disposed
of from year to year. ‘

On the 23d day of February, 1837, Bacon College was chartered, and soon

 

  

.n L’s.

 

._ fivflan IWM—g.” a...

[13]

after went into operation at Georgetown. It was established by the Chris—
tian Brotherhood of Central Kentucky, and the Board of Trustees were
nearly all members of the Christian Church. In 1839 Bacon College was
removed to Harrodsburg, and a large and convenient College edifice was
afterwards erected. It was from the beginning embarrassed by financial
difiiculties, and finally suspended operations as a regular College; but an
Academy for the instruction of youths was kept open in the College prop-
erty.
In the year 1856, Major James Taylor, a liberal and public spirited citizen
of Mercer county, at the solicitation of]. B. Bowman, with the View to
revive the College and to place it 011 a solid financial foundation, secured
subscriptions to the Endowment Fund, from citizens of Mercei county,
amounting to $30,500. John B Bowman of Merce1 county, is justlv enti-
tled to the credit ofl 1aving secured much the larger part of the subscriotions
to the Endowment Faund. He began to solicit 111 185 6, and prosecuted the
work with great energy and signal success. ,

Pursuant to a call made by the Trustees of Bacon College, a meeting or
the donors and friends of the College convened at {In “rodsburg, on the 6th
day of May, 1857. Mr. Bowman made a report to this meeting of the result
of his own and Maj. Taylor’s effort to obtain subscriptions, from which the
following extracts are taken :

“The result of his (Maj. Taylor’s) labors was tlic raisin/1; of $33,000, to which
amount he was himself the largest cont1ibutor To this sum I have sub-
sequently added about $8, 00,) which makes $38 000 in the county of Mercer
The policy adopted 111 the p1osecution of the 1101-k V1 is to radiate 110111 the

entre to the c1rcumfei cnce of a circle, constantly enlai ping as I progressed,
till it would eventually, we hoped, encompass thew hole State I pioceeded
to the county of Boyle, small indeed, and containing but rew brethren, but:
those I found forward in this, as they are in all good works. They subscribed
the Sum of $14,000, about $10,000 of which amount Was, given by the member—
ship of the Danv'ille Cl urch.

“I no: {t canvassed the county of Lincoln, where I secured about $17,000
from a noble set of b1ctnrcn, more liberal, pe1haps, in proportion to their
ability than any others whom I have Visited. In the county of Garrard I
secured about $8 ,000, the Church at Lancaster giving with almost unanimity
$4,000 In the county of Madison I obtained f1 0111 only a few persons
$6, 000, five public sniiited, enterpiising brethren, givin<1 me in one day,
$1 000 each.

“It 1s proper to state here that I declined canvassing tiiis county, so rich in
members and money, anv further for the present, in view ofa movement
made by the citizens to aid 21 most 1V01thy brother in another enteiprise

“is romt he Church at Bloomfield, Nelson county, 011 a briei Visit, I secured
$2,000. In the county of VVoodford I obtained about $17,000, and in the
county of Fayette about $27,000. I cannot speak in too high praise of the
unanimity and liberality of the brethren‘in the‘two counties last mentioned.
Scarcely an individual refused to give when asked,'1 and that, too, just after
liberal elforts had. been made for the Orphan School, tl‘e IE duczitional Society,
Bible Revision, &c. The Church at Midway gave me in two days $5,000,
which fact, in View of its numbers, its moderate wealth, and its generous
constant fosteiing care of the Orphanrgirl, 1s truly noble and praiseworthy.
But to the Church and neighborhood of South Elkhorn, especially, is due
the credit of giving the laroest subscription yet made bV any community,
amo inting as it does to neaer $12,000.

“I‘he above sums, with some scatte1ing, subscriptions, together VV1th the
promised endowment of the Chair of Sacred History by the noble benefac—
tress, Sister Emily Tubman, of Georgia, (whose good works, though quiet,

 

  

l4]

are yet known of all,) make the aggregate sum of $150,000 of donations
obtained by the present effort. This, with the funds in hand, which are
safely invested (all of which is exclusive of the property of the mstitutlon),
makes the total amount of about $160,000. The names of the donors, with
the amounts, are hereunto appended. ' .

“\Ve have by this effort partially laid the pecuniary basis for an Institu—
tion which we hope is destined to become the support of the Church, and an
ornament to the State, and which will meet the highest expectations of those
who have so liberally contributed to it.

“It is our purpose to canvass the whole State and give all the brethren the
privilege of participating in a work so well begun, with a Board of Trustees
composed of brethren of enlarged and liberal views, and with your hearty
co-operation, we hope soon to consummate the enterprise.

“It seems to be the unanimous wish of the brethren and friends who have
contributed their money to this College that the provisions made for the
education of its students should be of the most liberal character. They feel
that they are contributing to an institution which promises to meet in all its
arrangements the present crisis in our church and society. ,

“It is therefore assumed that the Board Will faithfully carry out the wishes
of the donors in these respects by laying broad and deep the foundation of :1
school for young men—by making it conservative of pure morality, and
especially by making ample provision in its educational department for a
sound, thorough ministerial education.

“We have, in conclusion, brethren and frienls, everything to cheer us in
this good work. The wealth and liberality of our numerous brotherhood
are more than adequate to the endowment of a University with a half million
of capital.”

As the resolution of the Board requires us to ascertain and report the exact
financial history of the University, we deem it essential to call the special atten-
tion of the Board to the important fact (as this fact has been so often oflate
years controverted) that Mr. Bowman’s appeal was to the Christian Churches
of Kentucky and their members, and that nearly all the original subscrip—
tions to the Endowment Fund were made by members of the Christian
Church. .

The foregoing extracts from Mr. Bowman’s report made to the first meet-
ing of donors. while the facts were fresh in the memories of all subscribers,
establish beyond question that he made his appeal to the Christian Brother-
hood of Kentucky, and that they nobly responded with liberal subscriptions
to endow the College. The endowment thus subscribed was thefinanc’a’al
foundation on which the University was erected, and this foundation was
increased from time to time until the funds and property of Transylvania
were acquired by contract as a bonus for flu: removal of t/ze institution to
Let 2'71 gton . I

We now proceed to examine in detail the condition of the Endowment
Fund, and to point out the discrepancies between the reports made by Gen-
eral Agent and Treasurer }. B. Bowman, and the actual‘state of affairs as
shown by his own books.

1859.

On the 19th day of September, 1859, the first collegiate session opened.
In the announcement for that year, p 24, the Board and public are told,
“The Endowment Fund has already reached nearly $200,000, of most
solvent notes, which are rapidly falling due, and about $70,000 of which is
paid in and yielding a large per cent.”

This amount seems to be an exaggeration, for by the Treasurer’s books
the total amount of subscription to this fund, including Bacon College Fund

fix

 

  

L5]

($9,500), was, at this time, $166,850, exclusive of Mrs. Tubman-’s promised
subscription of $15,000.

1864.

In the catalogue for 1864, page 32, the general agent says : In the month
of April last. with but a slight effort, I raised about $15,000, receiving some
munificent donations from noble hearted brethren of other States. This
statement is exaggerated, the Treasurer’s books show that the amount sub-
scribed in March, 1864, was $2,000, and in April, $10,600; tota1—-$12,6oo,
instead of about $15,000.

1865.

In the preamble to the act establishing the Agricultural and Mechanical
College, approved February 28, 1865, it is recited that “said Curators have a
cash endowment of $200,000, yielding an annual income of about $12,000.”
The truth is, as shown by the Treasurer’s books, on the 30th of june,
1865, over four months after that date, there was a cash endowment of only
$141,196.53. The statement, therefore, that the Curators had a cash endow-
ment of $200,000 is a misstatement to the extent of $58,803.47.

On the 30th ofJune, 1865, the total amount of subscriptions to the Endow—
ment Fund was $176,400, to which, adding the Bacon College Fund of $9,500,
we have a total of $185,900; and , of this amount $44,703.47 was uncol»
lected, and acccording to the Treasurer’s books $21,796, remained uncollected
on the 1st day ofJune, 1877; over twelve years after the statement was made.

1866.
Treasurer Bowman, in his annual report in 1866 (see catalogue, page 61),
says: “I have collected during the past year $10,801 of the EndOWment

Fund of Kentucky University, the most of which was due before the war,
and the payment. of which had been suspended.” The Treasurer’s books
show that he collected $6,175, a difference of $4,626 between his books and
his report. '

It was early in the fisCal year ending June 30, 1866, that the Transylvania
Fund of $65,500 was received It was also during this year that the en-
croachments on the Endowment, which have since run up to an alarming
extent, began.

Before entering on this subject, we desire to call the especial attention of
the Board to the 14th section of the Charter, from which the following ex-

tract is takenz—“And all money thus donated as permanent Endowment

Fund, shall be principal, and shall be, as the same accrues, invested in good,
safe, profitable, and permanent stocks, which shall remain forever intact,
and the amount whereof is to be in no respect, or in any manner whatever,
diminished; subject, however, as necessity may demand, to investment and
re investment in said stocks. The proceeds of such stocks, either in the
form of dividends, ‘or interest, or rents, shall be a fund in the hands of the
Treasurer, subject to the order of the Board of Curators, and shall be used
as the Board may direct, for the purposes of the University.”

It will be noted that the Board itself has no power wizaz‘over zfo use for
(my purpose w/mzfever (except for re-investment and refunding Mercer coun—
ty subscriptions) a single dollar of the principal of the Endowment Fund,
and such use thereof would be a clear breach of trust, and render them not
only personally liable for the amount so used, but would, by proper proceed-
ings, subject them to removal from oliice. The Board of Curators has the
right to use the income arising from the Endowment Fund, and the z'mome
only. ‘ _

 

  

[6.]

The Treasurer’s books shon that during the year ending June 30th, 1866,
$781.16 0f the principal of the Endowment Fund was used by the Treasurer.

At the time this encroachment on the Endowment Fund was goingon,
the following statement was published on page 47 of Annual Catalogue for
18662—“The actual cash endowment of the University amounts to over
$400,000, and its Real Estate to about $200,000.”

This statement is repeated in catalogue for 1867, p. 62, and catalogue for
1868, p. 67, except that in both of these the Real Estate is put at $250,000,
instead of $200,000. The statement as to the actual cash Endowment is an
exaggeration, as will appear from the following summary, taken from Treas—
urer Bowman’s published acc0unt current for that year :

 

 

Endowment money invested in stocks . . . . . . . . . . . . $176,375 00
A. and M. College Fund . . . . . . . . . . . . . . 165,000 00
Endowment Fund collected and not invested in stocks . . . . 30,920 75
Cash on hand . . . . F . . . ., . . . . . . . . . . . . 5,581 78

Total cash Endowment ,. . . ,- . . . . . . ‘ . . . . . .. . . $377,877 53

 

Deducting this amount from $400,000, leaves a discrepancy of. $22,122 47

1867.

During the fiscal year ending May 31, 1867, the encroachment on the E11-
dowment Fund was largely increased; but the Treasurer, in his Annual
Report, entirely suppresses this fact. In his report for this year, the T'reaS-
urer says—See catalogue, page 90 :

“I have paid in the. last sixteen months $62,819.82 upon the purchase of
Ashland and Woodland, and hope to meet as promptly the other payments,
the last of which will be due the 15th of February, 1870.”

In this he clearly intended to impress the Board with the belief that he had
made these payments legitimately, by the collection of Real Estate notes,
and confirms this impression by his account current of this Fund, as follows:

REAL ESTATE AND BUILDING FUND.
To total subscriptions . . . . . . . . . . . . . . . . . .
By amount paid on Ashland and Woodland . . ,1 $ 62,819 82
By bills receivable. .. . . . . . . . . . 58,030 18—$120,85o 00
The amount expended for Real Estate, as reported by the Treasurer in his

general statement and account current as above given, was . . . $62,819 82
But the amount collected of this fund was only . . . . . . 44,997 21

. $120,850 00

 

 

Leaving a deficit in this, and an encroachment on other funds of $17,822 61

In the foregoing account the Treasurer fails to set forth, except by impli—
cation, how much he has collected of this fund; but certainly makes the
impression that the amount uncollected was $58,030.48, whereas it was really
$75,852.79-

This deficit in the Real Estate account is, according to Mr. Swope’s sta-
tistics, made up of the following items:

Amount used 0fthe Endowment Fund . . . . . . . . . . . $12,332 (>6
Interest and General Expense Fund . . . . . . . . . . - . . 3(. ~ (-

, ,, 4~ )/ )Jr
A. and M. (.ollege 14 und . . . . , . . . . . . . . . . . . . 1,192 01

$17,822 61
It will be seen that up to the 1st of June, 1867, the Treasurer had unlaw-

 

m~,,_,_.MMm ' ‘

 

 

 

 

  

 

 

 

[7]

fully used $12,332.66 of the principal or the Endowment Fund, and to bal-
ance his Real Estate and Building Fund account, has largely understated.
the amount of the uncollected notes of this Fund.

The State Appropriation.

August 22, 1876, the State of Kentucky advanced the University $20,000,
“to aid in putting the Agricultural and Mechanical College into immediate
operation.” '

Treasurer Bowman, in his Annual Report (Catalogue of 1867', page 99),
says : “The $20,000 which was loaned by the Legislature, has been appro—
priated to the payment of the Faculty of the College, and to other expenses
incidental to organizing it, in accordance with the provisions of the act.”
According to Mr. Swope’s report :—“About $I1,0oo of this money was used
for buildings, and the remainder for salaries of Professors and Tutors and
for farm purposes.”

 

,. .,_«~

1868.

During the fiscal year ending May 31, 1868, the encroachment on the En—
dowment Fund rapidly increased. The Board of Curators was not only
kept in profound ignorance of the fact, but the Treasurer, in his annual re-
port, deliberately made false and misleading statements on the subject.

Attention is specially called to the following extract from the Treasurer’s ’
report, made June, 1868. See catalogue, page 101. .

“The Endowment Fund remains the same as last year, except as far as it
has been diminished by amounts refunded to citizens of Mercer county,
under the act of the Legislature removing the University thence.”

This statement is uttexly inconsistent with the fact, that on the 28th day
of March, 1868, the Treasurer, J. B. Bowman, had sold five 7—30 United
States bonds. belonging to the Endowment Fund, for $5,360 75; and on the
21st of April, I868, had sold for the sum of $5,628 six Bourbon county bonds
that had been turned over by Transylvania University.

No portion of the amount received for these bonds was ever invested in
any other bonds or stocks. It could not have been used to refund to Mercer
county donors, for the Treasurer’s report shows that during the preceding
fiscal year he refunded $1,217.50 to them. These $11,000 of bonds have not
only entirely disappeared from the list of stock investments, but no other
stocks or bonds have been purchased to take their place.

In view of the sale of $11,000 of Endowment securities, and the unlawful
use of the money thereof, how could the Treasurer truthfully report to the
Board that the “Endowment Fund remains the same as last year”.‘

Having made this misstatement he was compelled to resort to some means
to sustain it. .

How to sell $11,000 of Endowment bonds, and thus reduce the Fund to
that extent, and yet so state the Endowment account as to conceal this and
other diminutions of the funds, was the problem to belsolved, and the Treas—
urer solves it in this way.

He had converted $35,000 of United States bonds, that had cost $35,575,
into forty-four Louisville, Lexington and Cincinnati Branch Railroad bonds,
and had also sold two Lexington and Frankfort Railroad bonds Ior $2,000,
and purchased two Louisville, Lexington and Cincinnati Branch Railroad
bonds for $1,736.66, these he entered in his account current at their face
value, $46,000, instead of their cost value, $37,311.66, thus gaining the sum
of $8,668.44 in this one entry.

In his account current of the Endowment Fund (p. 104), instead of re-
porting the bonds and stocks on hand, at their actual cost value, as had been

 

  

 

[3]

clone in every preceding year, he reports all of them at their face value. By
this device he swells the amount of stock investments to $172,400, which is
within $3,975 of the amount reported in 1867, though he [lad sold $11,000 of
tile stocks and used like proceeds. It will be clear to any one who reflects a
moment, that if stocks are allowed to be entered at their face value, instead
of what they actually cost, any defaulting official could, by purchasing de-
preciated stocks at reduced prices, cover up his defalcation.

While this device covered up much the larger part of the $11,000 of bonds
sold, the Treasurer made still another misstatement t0 the Board to conceal
his use of these bonds, and to balance his account.

This he did by increasing, in his report for 1868, the amount claimed to be
loaned under the act of the Legislature, from $36,663.39, as reported in 1867,
to $45,423.54, thus leading the Board to believe that he had, during this year,
increased the loans of the Endowment Fund to individuals to the extent of
$8,760.75, when in fact it appears by his books that those loans had been
dz'mz'm's/zed about $1,250. We are unable to account for this deceptive state-
ment, unless it was made for the purpose of forcing a balance of the En—
dowment Fund account, and covering the 'sale of $11,000 of bonds and the
use of other portions of the Fund.

We are constrained, by a sense of duty, to call the attention of the Board
to the manner in which the investment account has been kept by the TreaS<
urer.

The amount stated by the Treasurer to have been temporarily invested
under the act of the Legislature authorizing the Endowment Fund to be
loaned to individuals, was on the 1st day of June, 1866, $30,920.75, and this
(1866) is the only year from that date to the time Treasurer Bowman retired
from office, in which the amount has been correctly reported to the Board.

An examination and comparison of the Treasurer’s books with the Treas—
urer’s reports, will show that he has habitually made use of this item from
the year 1867 until 1874, as a convenient means of forcing balances of the
Endowment Fund account. The amount loaned to individuals has been
largely exaggerated every year since 1866, thus leading the Board to believe
that the Endowment Fund was loaned in large amounts, when in fact the
greater part of the Endowment money reported as invested in notes had
been collected and unlawfully used by the Treasurer.

For instance, in 1867 the Treasurer reports the amounts temporarily in-
vested in notes at $36,663.39, when in fact the amount so invested was only
$18,840.78, being a misstatement t0 the amount of $17,822.61. In 1870 the
amount is stated at $44.484.48; but the amount actually loaned was $11,231.
63, a misstatement t0 the amount of $33,252.85.

These false and deceptive statements were made year after year from 1867
to 1872, when (Catalogue of 1872, p. 91) the amount is stated at $48,036.65,
while the amount actually loaned was $3,662.88, being a misstatement to the
amount of $44,373.77.

At the annual meeting of the Board of Curators in 1872, an effort was
made to have the Treasurer report to the Board the names of the parties to
whom this large amount of money was loaned, and the securities held there—
for.

This was vigorously opposed by the Treasurer and his friends in the
Board, and the effort to force the production of the notes, or at least a list of
them, for the inspection of the Board, was defeated.

The statement was, however, then made to the Board that the $48,036.65 was

loaned to solvent individuals, and well secured, except, perhaps, about $300, ‘

and that no one person had more than $10,000 borrowed. In fact, however,
there were only'$3,662.88 of notes held at that date by the Treasurer for

 

‘. ‘. «‘35. “MEN“; M ac; AT.

 

 

  

[9]

Endowment monev loaned to individuals, and the remainder of the $48,036.
35 VV as Endowment monev unlawfully used by the Treasuier himself.

Y our attention is specially inVited to the l‘1easuier s deceptive method 01
keeping this account. In 1866 and 1867 the name of each individual borrow—
er, and the date and amount are given. But as these notes Were collected and
the money unlawfullv used by the Tr“,easu1e1 entrv is made of “bills re~
ceivable” in g1oss for large amounts, without specifying the b01rowe1.
These ent1ies are made at the close of each fiscal year.

Thus, May 31, 1868, we have 011 the Tieasurer’ s books “bills receivable”
debited with the grOss amount, $19,122,61, and May 25,1869, debited in the
same manner, the amount of $9, 589. 30, making a total of $28,711. 91, and 1n
June 1,1869, just one week aftei the last debit entry. we find a credit entry
of precisely the same amount, namely, $28, 711 9.1

Again, near the close of the fiscal year ending May 31,1871,VV'e find a
debit entry in gross of “bills receiV able, $44, 885. 24, followed by a corre«
sponding credit entry of preciselV the same amount.

If these were bona fide entries, the first ent1y represents a loan 01 $44,—
885.24 to some person or persons, and the credit entry of preciselv the same
amount indicates that the whole loan was repaid within tVVo weeks.

it can not fail to strike every one as very remarkable that an institution,
whose policy is to invest its Endowment Fund in long and safe securities,
should make loans of large amounts at or near the close of almost every
fiscal year, to be collected within two or three weeks, and then 1emain idle
and uninvested until near the close of the next fiscal yea1.

It IS also incredible that parties should be found who were willing to bor-
row, near the close of each fiscal year, such large sums, to be repaid in so
short a time.

This process of balancing this account in the books by a fictitious entry
of “bills 1eceiVable,”w was not employed in 1870, and hence that Vear the
enormous discrepancy of $33,25 2. 85 appears between the amount of notes
reported by the Treasurer as held by him for money loaned, and the amount
1eally loaned and for which he in tacts held notes

His books show he held notes against individuals on the Ist June, 1871,
for only $11,231. 63, while he reports to the Board that the amount of notes
held VV as $44, 484. 48, a difference between his own books and his own ol’ricial
re p01t to the Board of $33,2 52.85.

On the 1st of june, 868 the encroachment 011 the Endowment had
reached 343274950, according to the statistics compiled by 311‘. Swope 110111
the Treasurer’s books. This amount had been unlawfully used by the
Treasurer up to that date. and it VV as to covei this deficiencv in the EndOVV-
ment Fund that the misleading statements ot the lreasur‘e1 to the Board
herein referred to, were made.

The Treasurer, in his report for 1868 (p. 101), says: “The obl1gations of
the office have been far heavier than at any other period in the history of
the institution; yet we have been enabled to meet them all without embar~
rassment, and there is not one outstanding that can not be duly met.”

This language was certainly encouraging, and must have led the Board
to believe that the institution was in a healthy and prosperous condition,
and entirely unembairassed in its finances. The facts were exactly the re-
verse, and it was a bold stateir ent to be uttered bva ' Treasurer VV ho had
not onl y exhausted all the income of the University, but had actually used
$32 ,749‘.