Repository: UIHistories Project: Board of Trustees Minutes - 1934 [PAGE 221]

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1933]

UNIVERSITY OF ILLINOIS

219

University budget after all such sources of revenue are taken into account. The income from the sources above referred to is not handled through the State Treasury, but by a treasurer selected by the Board of Trustees. The Board of Trustees of the University of Illinois is and always has been a corporation under the laws of the State with the usual corporate rights and responsibilities. Among the responsibilities imposed on it by its charter is that of selecting a treasurer for the custody of University funds other than those appropriated by the State. The trustees have exercised the utmost care in the handling of these funds. The University has come through the disturbed banking conditions of the last few years without loss and with an item of only $37,006.8" temporarily tied up on account of the closing, in January, 1932, of the First National Bank of Champaign, in which it kept its funds. This amount is safeguarded in two ways: first, by the participation of the University in the payment of further dividends from the predecessor bank, and second, by the personal bond for $2,000,000, still in force, and executed by five responsible citizens. Furthermore, except for an item of $10,000 this amount is made up of trust funds which are on any interpretation the corporate property of the University itself. In view of the disturbed financial conditions in recent years the Board has steadily sought to safeguard funds in the hands of its Treasurer by more and more stringent provisions. P r i o r to 1930 the Board followed the then prevailing practice of requiring a sufficient personal bond from thoroughly responsible people. W h e n Mr. A. M. Burke was re-elected Treasurer in March, 1929. he tendered a personal surety bond of $1,500,000, signed by nine citizens of the community whose aggregate worth was more than five million dollars. Mr. Burke selected the Citizens State Bank of Champaign, of which he was an officer, as the depository of funds in the custody of the Board of Trustees. In December, 1929, the Citizens State Bank of Champaign was taken over by the First National Bank of Champaign. H a d this not been the case the Board would still have had what at that time was a thoroughly good personal bond for the entire amount on deposit with the Citizens Bank, and there is no reason to believe that the University would have suffered any loss. Mr. Hazen S. Capron, Vice-President of the First National Bank of Champaign, was elected T r e a s u r e r to succeed Mr. Burke on December 12, 1929. H e submitted bonds in the penal sum of two million dollars, executed by two responsible surety companies, insuring among other things that the Treasurer would account for all moneys and properties belonging to the Board which might come into his custody as Treasurer. Mr. Capron selected the First National Bank of Champaign as his depository. In March, 1931, on the occasion of Mr. Capron's re-election as Treasurer the following arrangement was made. T h e depository bank was required and did deposit as collateral Government bonds to cover the deposit, and in addition, a personal bond for $2,000,000 was taken, signed by five responsible residents of the community of ChampaignUrbana, In January, 1932, the First National Bank of Champaign closed. The Government securities deposited as collateral were taken over by the Board and sold, the arrangement having been upheld by the Comptroller of the Currency. From this sale and from payments made by the reorganized bank was realized an amount sufficient to cover the entire deposit with the exception of the $.57,006.87 above referred to, which as explained above, is still covered by personal bond and by segregated assets of the predecessor bank. In February, 1932, Mr. F r a n k M. Gordon, Vice-President of the First National Bank of Chicago, was elected Treasurer of the University. The substance of the agreement between him and the Board protects the deposits of the University, first, by a bond in the sum of one million dollars, executed by a surety company, and, second, by the deposit of securities of the United States Government of the market value equivalent to the full amount of the University <leposit in the bank. These securities are in the custody of the First Union Trust & Savings Bank of Chicago and are subject to the control of the University itself insofar as withdrawals of securities are concerned. Operations carried on by the University are checked as follows: