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SMITHSONIAN INSTITUTION 1446

topics involved in the business of the Smithsonian. Beside personal conferences I have been in touch with the Secretary by letter concerning the management of the investment portfolio of the Institution. 

The following matters supplemental to the printed report and especially emphasizing the first half of the current fiscal year may be mentioned at this time. 

First I wish to express my appreciation to the other members of the Executive Committee for their willingness to participate with me in considering the many detailed actions that must be taken in the management of the investments of the Institution. 

A meeting of the Executive Committee was held in the Chambers of the Chief Justice on Thursday, November 21, 1957, at 4:30 p.m. At this meeting Mr. J. F. Lawrence and Mr. G. S. Johnston of the firm of Scudder, Stevens & Clark, our investment counselors, were present. The Secretary of the Institution and the Assistant Secretary, Mr. John E. Graf, were also in attendance. A report was presented by Mr. Lawrence dealing with some of the current financial trends which bear on the investment program of an institution such as the Smithsonian. This report was discussed especially in connection with the present securities in the funds of the Institution. Special consideration was given to the relative place of bonds, and preferred and common stocks in the portfolio. 

A report was also presented by the representatives of Scudder, Stevens & Clark of changes in the market value of the securities of the Freer Fund and the other funds of the Institution from 1945 to November 30, 1957. A comparative statement concerning approximate annual investment income, rate of income on average market value during previous years, and the rate of income on the market value of the securities held in the fund in 1945 was also presented and discussed. In this connection as Chairman I pointed out the continuing need for income as well as safety of principal in the Consolidated Fund. I also again spoke of the decision of the Board that in the case of the Freer Fund special thought be given to growth potential in the securities of this part of our endowment. This special point of view is appropriate because the immediate use of income in this fund, although important, is not quite so urgent as in the case of the Consolidated Fund. 

It may be noted that as a result of the sale and reinvestment of securities since 1953, there has been a net increase of $1,162,474 in the book value of the investments in the Freer Fund, which showed a total of investment cost on June 30, 1957, of $7,915,271. In the Consolidated Fund in the same period by sale and purchase of investments there has been an increase of $571,917. The total of this fund on June 30, 1957, was $3,226,227. 

In conferences with the Secretary during the year, matters related to the personnel of the staff of the Institution have been considered. In this connection I should like to mention that at his own insistence, because of age, Mr. John E. Graf, who has been a member of the staff of the Institution from 1931 to 1945 and Assistant Secretary since 1945, retired on