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SMITHSONIAN INSTITUTION He observed that the current level of earnings should be maintained and dividends will be increased. Since stock earnings are now at an unusual level and there is a shortage of new stocks, he said that the Smithsonian should maintain its stick investments at between 60 and 65% (based on market value) of the portfolio. He does not foresee any major force which should affect importantly the present valuation of corporate earnings. Concerning equity investments, Mr. Johnson indicated that the Smithsonian should continue to seek investments in certain raw materials and commodity companies where the outlook for prices is favorable, notably metals, certain food processors, cosmetics, drugs and service companies, and in general companies close to the consumer. He noted that the latter groups have less difficulty in adjusting their selling prices to rising expenses than do basic industries such as steel. In a different category, he indicated that electric utility stocks have largely been ignored in the market for a year or more, but their basic growth continues. FREER FUND Original Book Value $ 1,958,591.42 Total Book Value, December 31, 1965 11,675,592.62 Gain in Book Value $ 9,717,001.20 Market Value December 31, 1965. 18,329,717.74 Gains on Securities now owned 6,654,125.12 Profit on Securities sold from December 31, 1964 to Dec. 31, 1965 $ 342,551.40 CONSOLIDATED FUND Book Value of Investments July 1, 1923 $ 177,965.28 Additions to Investments 1923-1965 Gifts and Bequests $ 3,754,892.68 Reinvestment of Income 653,368.50 Gains from Sales of Securities 1,860,321.24 6,268,582.42 Total Book Value, December 31, 1965 $ 6,446,547.70