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The written report of the Investment Policy Committee follows.
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The Investment Policy Committee of the Smithsonian Institution met in the Regents' Room on April 9, 1985. In attendance were Carlisle H. Humelsine, Acting Chairman; Donald Moriarty; Charles H. Mott; Thomas J Watson Jr.; T. Ames Wheeler; Robert McC. Adams, Secretary; Ann R. Leven, Treasurer; and John R. Clarke, Assistant Treasurer.

The meeting began with a lengthy discussion of the Institution's approach to investments in companies doing business in South Africa. The committee reviewed South African investments with concern. There was some hesitation about moving precipitously in this regard, however, since this might be regarded as unofficial shift of position in light of the Smithsonian's Federal status. The consensus of the Committee was that the choice of stocks and bonds should continue to be made primarily on established investment criteria. The Committee instructed the Treasurer to adopt procedures to vote all proxies, including those presently voted by Batterymarch, with attention to matters pertaining to South Africa and other social issues.

The Committee also discussed the Smithsonian's payout rate on endowment funds for fiscal year 1986 and recommended to the Regents of payout amount equal to 5% of the per share value averaged over the five years ending December 31, 1984. This translates to $8.27 applicable to all unrestricted and restricted shares. The application of 5% on all shares, which is recommended for only one year and to be reviewed one year hence, brings Smithsonian use of endowment funds more in line with that of other like institutions.
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