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an actual reduction in income and the inflation of costs which has occurred in the past six years.
During this same period of the 4-1/2% formula payout, actual yield from dividends and interest has been below the amounts paid out, with the result that over $2 million has been withdrawn from the capital gains portion of the endowment funds, as shown in the following table:

[[begin four column table]]
[[underline]] | FY | Interest & Dividend Income | 4-1/2% Formula | Amount Withdrawn From Principal | [[/underline]]
| 1973 | $1,144,000 | $1,651,000 | $507,000 |
| 1974 | 1,593,000 | 1,948,000 | 355,000 |
| 1975 | 1,704,000 | 1,911,000 | 207,000 |
| 1976 (15 mos.) | 1,902,000 | 2,467,000 | 565,000 |
| 1977 | 1,786,000 | 2,090,000 | 304,000 |
| 1978 | 2,136,000 | 2,303,000 | 167,000 |
[[end table]]

In this period, however, yields on stocks and bonds generally have risen substantially, to the point where the average dividend equals about 5%, based on the S&P's 500 averages, and interest income ranges as high as 9% or 10% or more, with the result that total of such yields on Smithsonian endowment funds should now exceed payout.
The endowment funds of the Institution are accounted for on a unit or share basis; as of June 30, 1978, there were approximately 495,000 units participating in the pool, each having a market value of about $104. Income payout for FY 1978 (established by the 4-1/2% x five-year market value average formula) was at the rate of $4.74 per unit, plus amounts sufficient to pay manager's fees. A payout for FY 1979 at this same level of $4.74 per unit, plus this year's increased manager's fees, (a total of $5.30 per unit) would amount to about 5.1% of the endowment fund unit market value as of June 30, 1978. The September 30, 1978 unit value