Repository: UIHistories Project: Book - History of Illinois Land Grant Endowment [PAGE 11]

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Land Grant Endowment Fund

11

On March 9, 1897, the Hoard of Trustees approved the report of the Finance Committee upon its examination of the report of Charles \V. Spalding, Treasurer; but on April 13, 1897, it was discovered that the Treasurer had hypothecated $412,310 of the bonds belonging to the University endowment fund. Eventually four of the banks holding these bonds relinquished their claim to them. It was necessary to start legal proceedings against the fifth bank in order to recover some $105,000 of the bonds. The 40th General Assembly made a sufficient appropriation to repair the loss, and transferred the endowment fund amounting to $456,712.91 to the State, making the Governor, Auditor of Public Accounts, and State Treasurer responsible for its management. The assets of this fund were turned into the General Fund of the State and were not kept separate: "Certain funds have been paid into the State Treasury arising from the sale of public lands set aside for school purposes and from other sources. These funds have been merged with the State funds and have lost their identity. Appropriations are made from the General Revenue Fund paying interest on such funds to 10 educational institutions entitled to the same." The fund became a part of an irreducible state debt on which the State was to pay 5% interest semi-annually on the order of the Chairman and Secretary of 11 the Board of Trustees. In compliance with the requirements of the Land Grant Act, it was 12 necessary for the State to replace the principal. The State Legislature appropriated $10,000 June 26, 1913, for the use of the commission in settling, adjusting, and compromising suits and claims arising from the defalcation of the former University Treasurer Charles W. Spalding. The Commission was also empowered to settle, adjust, and discharge the indebtedness of Charles W. Spalding to the University of Illinois. As the lands were sold, the proceeds were turned into the State Treasury, and the fund was automatically increased by that amount. With the final payment on the land contracts in June. 1915, the total amount had grown to $649,012.91,') at which point it became fixed. The Endowment Fund was the result of three transactions: $319,494.01 was received from the sale of land scrip, $121,640.76 from the sale of Nebraska lands, and $207,878.14 from the sale of Minnesota lands. During the seventy-two year period of 1867 to December 31, 1939, the University received $2,043756.71 in interest from this fund, and in accordance with the legislation enacted in 1879, the University will continue to receive annually $32,450.66 so long as that act is in force.

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