Repository: UIHistories Project: Board of Trustees Minutes - 1952 [PAGE 1427]

EXTRACTED TEXT FROM PAGE:

1524

BOARD OF TRUSTEES

[June 19

The textbooks that are sold at the Illini Union Bookstore are sold at prices that are set and prevail at other stores where the students can purchase them. Since 1040 up to and including the close of 1951 the total sales at the Illini Union Bookstore were $3,248,734.04. During this same period the net income before dividends was $321,799,40. Dividends paid during the period amounted to $50,101.06, and the dividend rate ranged from 5 to 10 per cent. Surplus after dividends during this period was $255,358.04, of which amount $49,964.88 was transferred to the Illini Union for equipment purchases and building improvements, $100,000 financed the Illini Union coffee house and $100,000 remains in reserve as working capital for the bookstore. Over the period of time the store has operated there have been some articles sold that perhaps are not classified entirely as student necessities or materials for the pursuit of education, but by and large the objectives of the store are to assure students and faculty they can purchase books, materials and supplies needed in university course study at fair prices, having in mind the necessity for providing the student with the lowest possible cost for education but at the same time recognizing the free enterprise system by giving fair competition to privately owned businesses in the same area of merchandising. Having in mind the results the committee feels it is desirable to sustain, they being: (1) fair prices to all purchasers, (2) protection against any possible, although improbable "high prices" that might be charged by independently owned stores if the Illini Bookstore were closed, (3) establish a policy of free enterprise and fair competition, and (4) accruing profits after expenses to be used in lowering cost of activities carried on for student benefit in Illini Union, we recommend the continuation of the bookstore and its apparently fair pricing policy on over-the-counter sales, discontinuing all dividend disbursement, specifically recommending the following: (1) That the University Bookstore continue to be operated and thus give students and faculty assurance of continuing opportunity to buy their bookstore needs at prices fairly determined and established. (Some might claim that fair prices could not be maintained if the University-operated Bookstore competition was removed.) (2) That the University Bookstore shall limit its activities to offering for sale nothing but books, materials or supplies needed in University course study. (3) Discontinue all dividends. Reduce the cost of books and supplies, at the time of purchase, by an amount equal to the ratio of the dividends paid in the past four years to cash sales during the period. If profits accrue, transfer them to the general fund of the Illini Union. Discontinuing the policy of dividend distribution appears entirely justified because the total dividends distributed the last four years amount to only 1.9 per cent of yearly average total sales. Average Yearly Total Sales (last 4 years) $482,622 Average Yearly Dividends (last 4 years) 9,302 $9,302 is only 1.9 per cent of $482,622 In the last year of 1950-51, only 4,798 students qualified for a dividend rebate of less than $3 per qualified student. Divide the dividend distribution by the entire enrollment and the theoretical quotient is so small (less than $1) that it indicates that the dividend disbursement is not too essential and perhaps not justified. It is true that the dividend rebates the last several years have amounted to 10 per cent on the purchases of those who participated in such distribution. However, the justification for a bookstore operation is for the benefit of the entire student body and if the rebate had been made at time of sale on the full volume, it would have amounted to less than 2 cents on each dollar of sales. Respectfully submitted.

W A Y N E A. JOHNSTON, ROBERT Z. H I C K M A N HERBERT B. MEGRAN Chairman

On motion of Mr. Johnston, the recommendations of the Committee were approved.