Repository: UIHistories Project: Board of Trustees Minutes - 1924 [PAGE 413]

EXTRACTED TEXT FROM PAGE:

4io

board o f trustees

[February 14,

I recommend that Professor White's suggestions be adopted and approved by the Board, namely, that Mr. Petry's resignation be accepted, effective M a y 1, and that he be permitted to take out all vacation allowances due him in the period before that date. O n motion of M r s . E v a n s , these recommendations were approved.

INVESTMENT OF TRUST FUNDS

(11) A suggestion that the Board make it specifically the duty of its Finance Committee to consider and make recommendations on the investment of trust funds given to the University; that the committee be instructed to consider the matter of changing the form of securities whenever circumstances seem to make it advisable to do so, and report at the next meeting of the Board a recommendation for the change of the form of investment with their reason therefor. In this connection, I beg leave to remind the Board that some time ago your Board directed the investment of the McKinley Hospital money in interest-bearing securities. The chairman of your Finance Committee, Judge Herbert, demurred to the proposition on the ground that might invalidate the bond of the Treasurer. I submitted the question on this point to the Legal Counsel of the University in the following letter and received his reply which is also attached. Honorable 0. A. Barker, Legal Counsel: January 3, 1924 Dear Judge Harker: Some months ago the Board of Trustees of the University approved a reconv mendation of mine that the Comptroller be directed to invest the McKinley Hospital money then on hand under the direction of the Finance Committee of the Board. Judge Herbert, Chairman of the Finance Committee, was not present at the meeting. When he was requested to take action, he demurred on the ground that such action on the part of the Finance Committee might invalidate the bond of the University Treasurer. It seems to me that the Judge is mistaken in this view. So far as I can find, the bond of the Treasurer is given for the safe-keeping of the money and securities committed to his charge. It seems to m e that the Board may at any time change the form of its investments in securities without any responsibility on the part of the Treasurer for the change, provided only he keeps the securities safe so long as they are in his custody. If this view is not correct, then the Board's hands are tied in the matter of changing investments or trust funds from one security to another. Will you kindly instruct m e as to the correct view of the Treasurer's responsibility in such premises? Will you also kindly give m e your opinion on the following point? Section 5 of the organic act establishing the University, passed March 8, 1867, provides that the Board of Trustees shall appoint a Treasurer at thefirsthandeach biennial meeting thereafter. The act further provides that said Treasurer "shall give bonds with such security as the Board of Trustees shall deem amply sufficient to guard the University from danger of loss or diminution of the funds entrusted to his care"; and also that "said Treasurer . . . . to receive such compensation as the Trustees mayfix,and be paid in the same manner as the teachers and others employes of the University are paid." M y question is this—does not the phraseology last quoted require the Board of Trustees tofixa salary for the Treasurer and to pay him in regular installments as the teachers and other employees of the University are paid? In other words, has not the Board been violating the law in this respect from the beginning in that it has appointed a Treasurer, who, instead of being paid a salary, is allowed to pay himself whatever interest he can earn on University funds over and above two percent? It is important that your reply reach m e not later than Thursday afternoon, January 10. Very trulyDavid Kinley yours, President