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SMITHSONIAN INSTITUTION 1552 information that are at their disposal. A final decision is then made as to the correct action to be taken in regard to every recommendation. The action is then submitted in writing for approval or for reconsideration to the members of the Permanent Committee. Quarterly statements of all the Smithsonian's investments come to me from Scudder, Stevens & Clark. Typical copies of these reports are before the Board on the table. These statements summarize the investment holdings of the Smithsonian Institution as organized in major funds. I have already mentioned the Freer Fund. When this fund was established in 1919 its book value was less than $2 million. Today the book value of this fund is $10,048,990 and its market value is $16,086,224. I should emphasize that this increase is entirely a result of the growth in the value of investments of the Fund. The figures that have just been presented do not include the addition of any new gifts or of any accumulated income to the Fund. The income of this fund has been used for the purposes of the Freer Gallery of Art as directed by the donor or has been segregated as accumulated income to be used for the purposes specified by the donor. It may be interesting to note that it has been said by authorities interested in the history of investment portfolios in universities and similar nonprofit organizations that the Freer Fund has had one of the most successful investment histories of any such fund in the country. Not a little of the success of the Freer Fund has been due to the very great increase in value of the stock of the International Business Machines Corporation that is held in the Freer Fund. As of the end of December, 1961 the market value of the 4,000 shares of IBM common stock in this fund was $2,316,000. During the last three years IBM stock, formerly in the portfolio of the Freer Fund, has been sold netting about $1,651,000. This $1,651,000 has been reinvested in other securities. It is interesting to note, however, that in spite of this relatively large sale the total value of the IBM holdings of the Freer Fund on December 29, 1961, was $2,316,000, or $204,000 larger than the total value of IBM securities in this fund of $2,112,180 in December 1958, that is, before the sales of these stocks noted above were made. This result is, of course, due to the phenomenal rise in value of this stock in the years noted. It will be of interest to the members of the Board of Regents, I am sure, to learn of the present state of the holdings of the Consolidated Fund and the Freer Fund as of December 31, 1961. These figures are as follows: CONSOLIDATED FUND Book Value of Investments July 1, 1923 $177,965.28 Additions to Investments 1923-1961 Gifts and Bequests $1,709,587.98 Reinvestment of Income 621,301.29 Gains from Sales of Securities 1,379,395.52 3,710,284.79 Total Book Value December 31, 1961 $3,888,250.07 Market Value December 29, 1961 $5,355,422.13 Gains on Securities now owned $1,467,172.06 Profit on Securities sold from December 31, 1960 to December 31, 1961 $260,408.88
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