Repository: UIHistories Project: Board of Trustees Minutes - 1904 [PAGE 45]

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1902.]

PROCEEDINGS OP THE BOARD OF TRUSTEES

21

Bearing in mind the terms of the contract between the University and the College of Physicians and Surgeons, your committee has been actuated by a desire to join in scrupulously seeking the completion of that contract within the period set forth in the contract itself, namely, twenty-five years. And we believe that the purposes of the College of Physicians and Surgeons are to the same end, and that the organization and the members of the faculty and officers of the College will manifest the sincerity of those purposes by aiding this Board in every way possible to bring this contract to a successful termination within the specified time. The amount of the purchase as stated in the original contract is $217,000. This amount has been increased $186,000 by the purchase of the property known as the West Division High School, and more than $100,000 by improvements made in that and in the original property, and further, by $17,000 through the starting of the Dental School, which together make the total amount of contract considerably above $500,000 at the present time . In estimating the amount of money to be acquired by the University yearly in order that the original amount of $217,000 should be provided within twenty-five years it was found that approximately the sum of $5,250 was necessary. I t was estimated that that amount would be required annually from the net profits of the College. When the purchase of the High School property was contemplated it was estimated by the committee of this Board and the committee of the Medical College that the enlargement of the school resulting therefrom and its increased income would enlarge the net income to the University to s an amount sufficient to insure the fulfilment of the contract within twenty-five years, the period stated in the contract. This Board thereupon authorized the purchase of the High School property and the increase of the amount of the contract, $186,000. By the organization of the Dental School this committee and the officers of the Medical College again concluded that the increased net income to the University would provide for the payment of the increased obligations, within the stated period, made necessary through the organization of this school. During the summer of 1901 the fire that occurred in the Medical College building made great repairs necessary and in the changes made at that time the spirit of improvement found its way into the High School property as well, and improvements were made in both far beyond any amount contemplated at the time of the purchase. This additional expense, together with the other expenditures which were authorized by this Board, has made the amount of the obligations in the contract exceed considerably the sum of $500,000, as stated at the beginning of this report. Now, estimating on the basis of $528,000 as the amount of the contract, which is approximately correct, it will require a net profit of $12,800 annually as the University's share to complete the contract within the specified time. However, two years of the contract have already passed, and the third year is well on its way. The contract went into effect May 1, 1900, and the completion is stated for May 1, 1925. The two years of the contract that have elapsed have not fulfilled expectations. The results are not what has been desired, nor what was confidently expected. Several things have conspired to cause this disappointment. We can see them now but did not forsee them. First, the unsettled condition always accompanying a rapid enlargement of a school makes it next to impossible accurately to estimate income and to hold the expense down proportionate to income. Again, the purchase of additional property and the enormous cost of its improvement, the fire in the original building, and the rebuilding and improvement of that building and equipping it for the Dental School have caused all concerned to lose sight for a time of the increased net profits which must necessarily be required to fulfill the contract in due time. Again, the unusual conditions arising in the administration of the contract, in the like of which the President, faculty of the Medical College, and the members of this Board were inexperienced, have induced and material features of the! school and allow a very loose rein in its financial affairs. But the experience gathered from the two years past will prove of large value in the conduct of this great enterprise to its termination. The first year of the contract resulted in a total net profit of 12,000 dollars, of which the University received 4,000 dollars. This amount fell 1,250 dollars short