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SMITHSONIAN INSTITUTION  778
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the Government would supply a site and a suitable building. In this connection they pointed out that the cities of New York and Chicago are at the present time building important industrial museums on valuable sites supplied by these cites. Whether we accept such a proposal or not, there can be no doubt that there is a real demand for a Museum of Scientific and Industrial scope like the great Deutsche Museum of Munich. Here should be assembled a permanent and instructive exhibit of the applied science.

Again, there was submitted to us only last winter an urgent plea that we find suitable quarters in which to house and properly display a large exhibit illustrating the growth and development of land transportation, while other pertinently insisted that the historical development of water transportation, and of transport by air, was no less interesting and important.
 
As to this set of facts, my belief is that comparatively cheap land south of The Mall could and should be secured for these prospective needs, and that on such land buildings suitable for exposition purposes should be built at moderate expense as required.

2. [[underlined]] Our Financial Needs. [[/underlined]]

Important though the foregoing considerations are, it is quite certain that provision for the development of study and research is even more important. This requires some study of our existing financial situation, our annual budget, and the possible methods and opportunities for building up our endowment funds even as other institutions of learning have done.
You are familiar with the fact that the free funds of the Smithsonian Institution began with the gift of the Founder nearly one hundred years ago, of $550,000. With accretions of the principal and added gifts, this sum was increased to $1,000,000, and turned over to the Federal Treasury for safe keeping. While the original sum was dissipated, the Government has always acknowledged its fiduciary obligation by an agreement to pay annually to the Smithsonian Institution $60,000 as income on the fund.

[[initialed]] CGA [[/initialed]]