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11.
Report.
We cannot but think that financially the University has in the past existed far too much from hand to mouth and we con- sider it to be our duty to face future possibilities steadily.
12. As regards the endowment funds more than one half of the income comes from sterling securities which we are satisfied are good. Of the balance approximately one-third comes from Hong Kong investments and two-thirds from Shanghai investments. In each case mortgages form the predominant factor, and we cannot con- sider, in present circumstances, that such a form of investment, especially in the case of Shanghai mortgages, is as safe as we should desire.
Resolutions of Senate and Faculties.
"
Resolved that the Senate concurs with the Committee's criticism in paragraph 11 of the University 1937 Report that financially the University has in the past existed far too much from hand to mouth ", but believes that this has been in part due to the fact that the Government's subvention has been contributed on a year to year basis without guarantee of continuance.
(a) The Senate is in entire agreement with the view expressed in paragraph 12 of the Report with regard to mortgage investments.
(b) The Senate desires to point out that the professorial staff has since 1920 been entirely excluded from participation in or information regarding the proceedings of the Finance Com- mittee, and that it is desirable that the pro- fessorial staff should be directly represented on the Finance Committee.
(c) In this connexion, the Senate would like to see the position of the Finance Committee, which is not included among the authorities of the University in the Ordinance, Section 5, so defined as to give it the status of a standing committee of the Council, to which body its minutes and proceedings would be submitted.
Resolutions of Council.
Resolved that the investment of University funds in mortgages in Hong Kong and in Shang- hai is not satisfactory.
Recorded the Vice-Chancellor's Statement that the loss of income amounting to £6,000 a year would ensue as the result of converting present mortgage investments into gilt-edged securities.
14.
Report.
It is our considered opinion that the University should no longer be content to live from hand to mouth but should at the earliest possible moment start including a surplus figure of at least $15,000 in every annual budget to go to reserve.
Resolutions of Senate and Faculties.
Resolved that the Senate approves the recom- mendation (paragraph 14 of the University 1937 Report) for the establishment of a reserve fund to provide for depreciation charges and protection against fluctuations of exchange and believes that the establishment of a reserve fund would be greatly furthered by an assurance that the exist- ence of such a reserve will not become a reason for reducing the Government subvention.
Resolutions of Council.
Resolved that Budget provision as a reserve against depreciation charges is necessary and should be a first charge on any surplus of income over expenditure.
15. If the above is accepted we are at once faced with the necessity of suggesting economies of a
long-term nature even if we need not recommend the emergency methods that have too often been unavoidable in the past.
The Senate pointed out that the emergency methods of retrenchment referred to in paragraph 15 of the Report have been largely at the cost of the salaries of the staff and of the maintenance grants of departments, and notes with satisfaction the Committee's disapproval of such emergency methods of economy.
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16. Two comparatively minor economies present themselves. The House Allowances paid to members of the staff who live out at present average about $20,000 per annum. We suggest that the allowances now paid to married men with families, married men without families and bachelors respectively are too high.
Resolved that the Senate is of the opinion that the existing house allowances are not too high when account is taken of the rents in force for suitable accommodation in the Colony; the Senate is also unaware of any cases of reluct- ance on financial grounds to occupy University quarters.
Resolved that the present scale of house allowance paid to men living off the University estate is not too high in comparison with the cost of provision made for men living in Univer- sity houses and that house rent allowances should be paid as subventions towards actual rent paid, but only to the maxima of the present house allowance scale.
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