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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.