This transcription has been completed. Contact us with corrections.
COVINGTON & BURLING 888 SIXTEENTH STREET, N.W. WASHINGTON, D.C. 20006 TELEPHONE: (202)293-3300 TWX (202) 965-0673 TELEX 89-593 CABLE COVLING [[cut off]]N LORD O'BRIAN [[cut off]]N G LAYLIN [[cut off]]TAINE C BRADLEY [[cut off]]ARD BURLING,JR JOEL BARLOW DONALD HISS JOHN T SAPIENZA NESTOR S FOLEY [[cut off]]IEL M GRIBBON [[cut off]]RY L SHNIDERMAN [[cut off]] V HARRIS,JR [[cut off]]LIAM STANLEY,JR WEAVER W DURNAN EDWIN M ZIMMERMAN JEROME ACKERMAN [[cut off]]RY P SAILER [[cut off]]N H SCHAFER [[cut off]]RED H MOSES [[cut off]]N LEMOYNE ELLICOTT DAVID L MCGIFFERT PHILIP R STANSBURY CHARLES A MILLER RICHARD A BRADY [[cut off]]RBERT DYM [[cut off]]RIL V SMITH,JR [[cut off]]RK A WEISS [[cut off]]RRIS WEINSTEIN JOHN B DENNISTON PETER J NICKLES NEWELL W ELLISON H THOMAS AUSTERN HOWARD C WESTWOOD CHARLES A HORSKY HUGH B COX J HARRY COVINGTON W CROSBY ROPER,JR JAMES H MCGLOTHLIN ERNEST W JENNES STANLEY L TEMKO JAMES C MCKAY JOHN W DOUGLAS HAMILTON CAROTHERS J RANDOLPH WILSON ROBERTS B OWEN EDGAR F CZARRA,JR WILLIAM H ALLEN DAVID B ISBELL JOHN B JONES,JR H EDWARD DUNKELBERGER,JR BRICE MCADOO CLAGETT JOHN S KOCH ROBERT E O'MALLEY EUGENE I LAMBERT JOHN VANDERSTAR NEWMAN T HALVORSON,JR HARVEY M APPLEBAUM MICHAEL S HORNE APRIL 18, 1972 Smithsonian Institution Washington, D.C. Gentlemen: Re: Determination of Income for Permanent Endowment Funds as a Prudent Portion of Total Yield and Appreciation Based on a Percentage of Average Fund Values Our advice has been requested regarding the use of a method whereby income of various permanent endowment funds of the Smithsonian Institution is determined as a prudent portion of total yield and appreciation based on a percentage of endowment fund values. In connection therewith we have examined copies of certain endowment instruments or portions thereof available in the files of the Institution in the light of applicable law. 1/ We are of the opinion, where the governing instrument does not otherwise specify how income on the endowment fund is to be determined, that the Smithsonian Institution may properly substitute for actual yields a prudent portion of total yield and appreciation to be treated as income of permanent endowment funds. 2/