SMITHSONIAN YEAR °* 1984

Statement by the Secretary

*

Oa

SMITHSONIAN YEAR + 1984

STATEMENT BY THE SECRETARY

The Smithsonian Institution « 1985

Frontispiece: During the past twenty years under Secretary Ripley’s guidance,
the Smithsonian has been dedicated to reaching out to the public at large. At
the same time, the boundaries of museum activities have been extended beyond
the monumental buildings to the Mall and other spaces outside. Exemplifying
this spirit, the photos on the preceding pages show (left) one of the posters at
Washington bus stops that promoted a major exhibition at the Freer Gallery
celebrating the 150th anniversary of the birth of James McNeill Whistler and
(right) a nineteenth-century bandstand, a gift from the State of Illinois, which
was installed in the outdoor amphitheater near the west end of the National
Museum of American History during the early summer of 1984.

The Smithsonian Institution

The Smithsonian Institution was created by act of Congress in
1846 in accordance with the terms of the will of James Smithson
of England, who in 1826 bequeathed his property to the United
States of America “to found at Washington, under the name of
the Smithsonian Institution, an establishment for the increase and
diffusion of knowledge among men.” After receiving the property
and accepting the trust, Congress incorporated the Institution in
an “establishment,” whose statutory members are the President,
the Vice-President, the Chief Justice, and the heads of the executive
departments, and vested responsibility for administering the trust
in the Smithsonian Board of Regents.

THE ESTABLISHMENT

Ronald Reagan, President of the United States
George H. W. Bush, Vice-President of the United States
Warren E. Burger, Chief Justice of the United States
George P. Shultz, Secretary of State
Donald Regan, Secretary of the Treasury
Caspar W. Weinberger, Secretary of Defense
William French Smith, Attorney General
William P. Clark, Secretary of the Interior
John R. Block, Secretary of Agriculture
Malcolm Baldrige, Secretary of Commerce
Raymond J. Donovan, Secretary of Labor
Margaret M. Heckler, Secretary of Health and Human Services
Terrel H. Bell, Secretary of Education
Samuel R. Pierce, Jr., Secretary of Housing and Urban Development
Elizabeth H. Dole, Secretary of Transportation
Donald P. Hodel, Secretary of Energy

[v]

Board of Regents and Secretary + September 30, 1984

REGENTS OF THE Warren E. Burger, Chief Justice of the United States, ex officio, Chancellor
INSTITUTION George H. W. Bush, Vice-President of the United States, ex officio

Edwin J. (Jake) Garn, Senator from Utah

Barry Goldwater, Senator from Arizona

James R. Sasser, Senator from Tennessee

Edward P. Boland, Representative from Massachusetts

Silvio O. Conte, Representative from Massachusetts

Norman Y. Mineta, Representative from California

David C. Acheson, citizen of the District of Columbia

Anne L. Armstrong, citizen of Texas

William G. Bowen, citizen of New Jersey

William A. M. Burden, citizen of New York

Jeannine Smith Clark, citizen of the District of Columbia

Murray Gell-Mann, citizen of California

A. Leon Higginbotham, Jr., citizen of Pennsylvania

Carlisle H. Humelsine, citizen of Virginia

Samuel C. Johnson, citizen of Wisconsin

EXECUTIVE Warren E. Burger, Chancellor
COMMITTEE David C. Acheson

William A. M. Burden

Carlisle H. Humelsine (Chairman)

THE SECRETARY Robert McCormick Adams

Phillip S. Hughes, Under Secretary

David Challinor, Assistant Secretary for Science

John E. Reinhardt, Assistant Secretary for History and Art

Joseph Coudon, Special Assistant to the Secretary

James M. Hobbins, Executive Assistant to the Secretary

Ann R. Leven, Treasurer

John F. Jameson, Assistant Secretary for Administration

William N. Richards, Acting Assistant Secretary for Museum Programs
Peter G. Powers, General Counsel

Ralph Rinzler, Assistant Secretary for Public Service

James McK. Symington, Director, Office of Membership and Development

[vi]

SMITHSONIAN YEAR + 1984

STATEMENT BY THE SECRETARY

The Smithsonian Institution « 1985

Gary Winnop of Sitka, Alaska, checks rigging at the 1984 Festival of American
Folklife. Native Alaskan basketry, doll making, wood and ivory carving, gold-
mining, logging, music, and dance were among the traditions presented to mark
Alaska’s twenty-fifth anniversary of statehood.

Preface

ROBERT McC. ADAMS

Institutionally, the Smithsonian is unique. Its stockholders, to
stretch the term but slightly, are the people of the United States.
This Smithsonian Year is a report to the people on the achieve-
ments and problems of fiscal year 1984.

I had the great honor of becoming the Smithsonian’s ninth Sec-
retary a mere thirteen days before the end of that year. This, then,
can only be a letter of transmittal. Appropriately, the traditional
Statement of the Secretary introducing this report is penned by
the distinguished scientist, educator, and administrator who led
the Smithsonian not only through all but a few days of fiscal year
1984 but also through two momentous decades before that.

It was a period of rich development and meaningful growth.
Under Dillon Ripley’s guidance, the Institution was able to open
doors and windows, both literally and figuratively. The doors of
a string of new museums were thrown open; windows to the minds
of millions were opened through a range of imaginative exhibi-
tions, programs, and publications. Research blossomed, and results
in scholarship were impressive.

The years ahead will be years of challenge in a changing world,
a changing economy, changing educational and cultural priorities.
I am confident that the Institution, building upon the Ripley heri-
tage, will continue to be faithful to its mandate to increase and
diffuse knowledge for the benefit of humankind.

Time Present and Time Past Are Wrapped in
Time Future

S. DILLON RIPLEY

“Gentlemen [and Ladies]: I have the honor to submit a report
showing the activities and condition of the Smithsonian Institution
and its branches... .” Thus, in the manner of the first seven
Secretaries, I greeted the Regents in 1964. Having served rhetorical
formality, I am honored to begin my final report. There is certain
comfort in tradition, after all, an accustomed fit like an old tweed
coat against the drafts of new circumstance. Tugging precedent
around my shoulders, I recall that my immediate predecessor,
Leonard Carmichael, reported on his first ten years en bloc. So I
am pleased to follow his worthy example and review the past score
years, as long a term as anyone save our paradigm, Joseph Henry,
was privileged to serve. It is a pleasure here to hand on the Smith-
sonian torch to the excellent successor to us all, Robert McCormick
Adams.

Looking backward—a proven way to take one’s bearings in the
woods or when putting out to sea—I am astonished to observe
how far we have come since 1964, a landmark year on many fronts.
In January, Dr. Carmichael had paved the way for the opening of
the Museum of History and Technology, ably assisted by Frank
Taylor, that museum’s first director; a national cultural center pro-
posed by President Eisenhower was renamed for John F. Kennedy
and placed under the Smithsonian aegis; some 10 million visitors
entered our buildings on the Mall; three cubs were born to Mohini,
the white tiger at the National Zoo; 1.2 million specimens were
acquired, some six hundred of them donated by the still-active
sixth Secretary, Alexander Wetmore. Also in that year, no doubt
emboldened by my relative youth, I expounded the following
thought: “Museums and their related laboratories are just entering
a new era, and museum resources are being drawn upon as never
before for general education.” [Emphasis belated.]

Twenty years later, I relish the memory of what was in the
air—an electric and electrifying energy like a summer storm over

[5]

Alexander Wetmore (left), the sixth Secretary of the Smithsonian Institution,
and Watson M. Perrygo prepare bird skins at La Jagua Hunting Club near
Chico, Panama, in this 1949 Smithsonian Institution Archives photo.

the great plain of the then empty Mall. It boded so well in many
respects: the promise of enriching activity, like warm rain to
nourish the crop of human potential. President Kennedy’s clarion
call to a New Frontier still echoed noble challenges as the Peace
Corps reached its stride, and the Great Society agenda was gather-
ing force. The new National Council on the Arts was conceiving
_the Arts and Humanities Endowments that would grow mightily
during President Nixon’s administration. America was “busting out
all over’ in 1964, not only at the Smithsonian but everywhere. It
is fitting to remember that all the energy was not wisely spent;
that a well-intentioned nation blundered into the Vietnam mis-
adventure. The nation and its leaders were not faultless in that
highly charged decade (or any other), but the common failings
then were neither timidity nor conformity. Even around the Smith-
sonian—especially here, I believe—one sensed a kind of estival
energy.

Perhaps one had to have been here in the dead of institutional
winter to appreciate it. Again “look backward lest we fail to mark
the path ahead.” Early in the Second World War, I had passed
through the Museum of Natural History and found it as stifling
as my wartime destination in the Southeast Asian forest. The ad-
ministrator of the museum was unaffectionately known as the
“Abominable No-man” for his unwavering diligence in barring the
door against innovation, while the curatorial staff was preoccupied
with housekeeping and the conduct of bureaucracy. Yet by 1964,
a new generation of curators was emerging. Perhaps they repre-
sented a phylogenetic leap or, more likely, were boosted by the
winds of productive adventure blowing across the land.

Raising our sights two decades ago, we surveyed the world of
science, history, and art from the Castle and realized our discov-
ered goals were not so much new ambitions as renewed intentions
to realize the Institution’s ancient promise. We found one challenge
in Secretary Henry’s aim to make the Smithsonian a center for
“enlarging the bounds of human thought”; another in his boast
that “we have from the first kept a keen eye on every discovery
of science and every invention in art”; a third in his vision for a
“College of Discoverers.” Nor could we forget the mighty mandate
of the legator himself “to found in Washington an Institution for
the increase and diffusion of knowledge.”

First among my aims was the basically democratic one to make
the Smithsonian known to its owners, the American people and by
extension all humankind. The public had come to view the Smith-

[7]

sonian as a dusty vitrine containing insects impaled on little pins,
their names penned in a language as dead as the halls’ appeal. We
wanted to invite people in, to make them welcome, to accomplish
the museum’s principal work of attracting men, women, and chil-
dren to exhibits and activities that stimulate the soul and the
intellect.

Second, if the Smithsonian were to claim its rightful place among
learned societies, the deprivations of its own staff must end. It
behooved us to appreciate the men and women who in some
instances labored in Dickensian gloom, and behooved us specifically
to create both an atmosphere in which they might thrive and an
outlook that would attract gifted successors.

Third, a fair reading of the founder’s will and a quick study of
the Institution’s history showed substantial gaps in the curriculum.
Both the original mandate and the precedents of practice encour-
aged us to find or create ways to fill those gaps, as for example in
art, environmental science, and aeronautica.

Finally, it was incumbent on America’s preeminently national
museum complex to take its place as a leader both in this country
and abroad.

Not surprisingly, these interrelated goals answered problems that
were connected. Over time an original premise of the place had
turned topsy turvy: privately supported by a single bequest, the
Institution had received from Congress a tiny sum in 1855 to pay
for tending some miscellaneous collections, but now that stipend
had mushroomed until the government provided 90 percent of the
budget. No wonder the public didn’t see the Smithsonian as their
own; it belonged to the Feds. If people came to know the Smith-
sonian better, we reasoned, not only would they profit personally
and intellectually but they might come to support it more. In time,
then, we might restore an organization supported equally by pri-
vate persons and the government.

There is a footnote to history, perhaps, in a memo written to
me in 1981 by our then treasurer, Chris Hohenlohe: “In reviewing
some historical material on Smithsonian budgets, I discovered the
interesting fact that the operating budget for the current fiscal
year, 1980—just under $200 million—is equivalent to the total of
all operating expenditures of the Smithsonian for the years 1847
through 1963. Put another way, you will be overseeing a budget
in this year alone which equals all of the moneys spent by your
seven predecessors. Since your incumbency, you have already been
responsible for overseeing 87 percent of all of the Smithsonian’s

[8]

Above: Ralph Chapman, researcher in the Paleobiology Department of the
National Museum of Natural History, leads a Resident Associate parent-child
class about dinosaurs while the participants make plaster casts of a dinosaur-
like animal. (Photograph by Lillian O’Connell) Below: Roger Morigi, a retired
master stone carver at the Washington Cathedral, lets young visitors try their
hand at carving as part of “The Grand Generation: Folklore and Aging” pro-
gram at this year’s Folklife Festival on the Mall.

i :
* a .%
| = =

47

operating expenses since 1847....

Personnel problems were also linked to the dependency on fed-
eral appropriations. For reasons lost in the ossuaries of history,
every Smithsonian employee was a federal worker first and a
scholar, scientist, or technician second. The terms of employment
did not necessarily address the career concerns of scholar or scien-
tist. It was clear that we had to find ways to compete with univer-
sities and other research institutions, to offer not only laboratory
space, but staff assistance, publishing opportunity, and higher
salaries which perforce must be funded from new private endow-
ments. As a virtual ward of the government, the Institution might
eschew individual enterprise and intellectual initiative. It behooved
us to encourage our people in the unfettered pursuit of profes-
sional interests.

Looking back over these twenty years is like studying a great
tapestry in the Textiles Collection, a complex of many threads. In
that first fiscal year the Smithsonian bravely opened several new
offices to embark on overdue work in various directions. We estab-
lished an Office of Education and Training, then an Office of
International Activities which William W. Warner directed with
peripatetic éclat. It organized the first archaeological dig abroad
with State Department cooperation. It helped unesco rescue Abu
Simbel and the monuments of Nubia from the rising waters of
Lake Nasser. It facilitated American scientists of all disciplines and
affiliations to work abroad by making local currencies available
to them as “counterpart funds.” If it appeared that the Institution
was embarked on an “outreach” campaign that year, the stage was
being set for other drama through such activities as the first con-
versations with Joseph H. Hirshhorn.

Studying what had come before offered a splendid springboard,
for a review of Smithson’s legacy revealed that 1965 was the bi-
centennial of the founder’s birth. What better occasion to win
academe and public alike to our renascent cause and, mirabile dictu,
rededicate his namesake Institution. The convocation celebrating
James Smithson’s 200th birthday brought the pomp and panoply
of a full-dress academic procession to the Mall as we conferred
the first Smithson Medal on the Royal Society (of which our
founder had been a member at age twenty-four). Some five hun-
dred learned societies around the globe sent their representatives
in recognition of the Smithsonian’s contributions to learning since
1846. These harkened back to the free exchange of scientific infor-
mation and research under the first Secretary.

[10]

The academic procession from the Smithsonian Castle to the National Museum
of Natural History for the formal opening of the Institution’s eighth interna-
tional symposium, “The Road after 1984: High Technology and Human Free-
dom,” on December 8, 1983.

Fiscal year 1965 also saw the creation of the Resident Associate
Program, which proved the Biblical lesson of manifold returns:
“Give, and it shall be given unto you.” Some subscribers thought
the program an act of overt generosity on our part, yet it has
earned more than it cost many times over. For one thing, it pro-
vided a new way for the Institution to do its important work by
offering a new vehicle to diffuse knowledge. For another, it brought
into the Smithsonian fold a whole new constituency of friends who
would be both self-motivated seekers and our ambassadors. This
and subsequent Associates programs brought us close to people
and them to us. Resembling programs suggested by Secretary
Walcott in 1926, they provided educational and recreation oppor-
tunities for people who soon supported the Institution with their
gifts and good offices.

On the several scientific fronts: Donald Davis proved through
the intriguing agency of moths that yucca and agave plants belong
to one genus; through faunal evidence J. F. Gates Clarke demon-
strated the then surprising hypothesis of continental drift: that
Australia, New Zealand, Rapa Island, and South Africa were once
joined. Pioneering volunteer observers joined the Prairie Network
to track satellites and meteorites across the night skies; the new
publications series Contributions to Anthropology was launched;
we were given an estuarine tract, the Chesapeake Bay Center for
Environmental Studies, now a 2500-acre natural workshop and
laboratory; the Flight Cage at the National Zoo opened to the
delight of visitors and avian occupants alike.

On strategic fronts, the Regents authorized the start of sub-
stantive conversations both with Mr. Hirshhorn and with the
trustees of New York’s beleaguered art museum at the Cooper
Union Institute. Sites, the traveling exhibition service, was reac-
tivated. Mary Livingston Ripley helped organize the soon highly
effective Women’s Committee, while her husband contemplated
the sorry tradition that the Secretary was the only Smithsonian
figure listed in the social directory, the Green Book. This was a
fact that had nothing to do with any scholarly issue or museum
policy; but it had everything to do with Washington’s infrastruc-
ture, with money and access to eleemosynary support anywhere.
As surely as an expedition in Nepal needs caches of food, success
in any Washington venture requires access to the seats of influ-
ence, a fact of life that may have been neglected by previous
Secretaries who did not believe their duties included fundraising.
Meanwhile, mindful of Joseph Henry’s belief that the Mall might

[12]

_ be made one of the most delightful places in the United States, we
_ began turning this greensward into a park for people, a lawn of
_ living celebrations, as trumpeters mounted the Castle’s North

Portico and the National Symphony performed on the terrace of

_ the new Museum of History and Technology.

In the banner year of 1966, beetles arrived from the tomb of
Tutankhamen; the Arts and Industries Building was renovated;
Nathan Reingold began editing The Papers of Joseph Henry, a
project jointly sponsored by the Smithsonian, the American Phil-
osophical Society, and the National Academy of Sciences; the Divi-
sion of Performing Arts made its debut; the Smithsonian Institu-
tion Press began publishing, with some trade books in addition to
a scholarly and scientific list.

Above all, President Johnson proved himself a friend of art and
of the Smithsonian. First, he was instrumental in saving the original
Corcoran art gallery building from demolition. This architectural
gem next to Blair House was transferred to the Smithsonian for
restoration as the Renwick Gallery. Next, the President and Mrs.
Johnson personally interceded in the cause of the Joseph H. Hirsh-
horn Museum and Sculpture Garden. I had solicited the Johnsons’
help in this matter, believing that they appreciated the ineffable
value of great art to the American people in general and Washing-
ton in particular. It seemed unfortunate that Washington might
lose this opportunity because of the presumption that nothing more
on the Mall could have a donor’s name on it. A truly passionate
collector of modern art, Hirshhorn owned nearly seven thousand
objects then valued at over $24 million, and he wanted to give the
lot—within an edifice he would help build—to America. There
was stiff competition between cities, nay among nations, to possess
this collection, but the President’s personal interest and interven-
tion won it for us. The gift of this treasury was one of three signal
art events in Washington’s history, in the grand tradition of
Charles Lang Freer’s contribution of his unrivaled orientalia and
Andrew W. Mellon’s donation of the National Gallery of Art.

Finally, 1966 marked the first of an annual miniconvocation of
scholars, academic specialists, artists, musicians, critics, and scien-
tists in cognate fields assembled as the Smithsonian Council. The
purpose of the three-day meetings of this council is mutual ex-
change: the Council familiarizes itself with the scholarly diversity
of our Institution, while our colleagues are exposed to kindred
souls in all fields. Each group comes to understand the other and
in the telling we are able to disseminate our wares to the intellec-

[13]

Above: Abram Lerner (left), then director of the Hirshhorn Museum and
Sculpture Garden, with Helmut Schmidt, former Chancellor of West
Germany, studying a work in the exhibition German Expressionist Sculp-
ture, April 2, 1984. Below: Shown at the twentieth anniversary celebra-
tion of the Organization of African Unity at the National Museum of
African Art, December 20, 1983, are (left to right) Edward J. Perkins,
Director, Office of West African Affairs, U.S. State Department; Henri A.
Turpin, Counselor, Senegal; Secretary Ripley; Chester A. Crocker, As-
sistant Secretary of State, Bureau of African Affairs; and Sylvia Williams,
Director, National Museum of African Art. Photograph by Jeff Ploskonka

tual world about. The experience has not always “worked,” but
the annual meetings serve as a fascinating inward look and out-
ward exposure for both sides.

The following year marked the bestowal upon the Smithsonian
of the Lilly Collection of rare coins. Work began on the revised
multivolume Handbook of North American Indians and the Urgent
Anthropology Program. The year 1967 also brought new vitality

to “people programs.” Alarmed by the consensus among authori-

ties at an Aspen conference that museums belonged to gentry,
Charles Blitzer and I countered with a novel proposal: If less ele-
gant people tacitly proved the brahmins correct by staying away
from marble halls on the Mall, the Loop, and Fifth Avenue, then
let us build smaller museums in lesser neighborhoods. In Washing-
ton’s inner city we found an abandoned movie theater, a willing
community, and an administrator who was a local resident and
knew the area and its people well. Then John R. Kinard opened
the Anacostia Neighborhood Museum, and its doors are still open,
on the avenue later named for the Rev. Dr. Martin Luther King, Jr.

The Department of Transportation was also born in 1967, and
the Smithsonian took due notice. A vehicular extravaganza on the
Mall (which already boasted the roundabout jitney of the carousel)
featured a rally of antique cars, an exhibit of vehicles of the future,
and even a demonstration of real levitation as a “test pilot’ bound-
ed around wearing a rocket belt. But in the most splendid event
on our lawns that year, the first Festival of American Folklife,
under the far-seeing direction of Ralph Rinzler, our expert in
ethnicity and folkcrafts, celebrated the manifold creativity of the
American people.

In 1968, the Office of Museum Programs opened and, reflecting
the spirit of the National Museum Act of 1966, provided an
array of advisory and assistance programs to kindred institutions
throughout the land. It also would serve as our conduit of news
about goings on elsewhere in America and abroad. New York’s
Cooper Union Museum was reborn as a Smithsonian bureau, the
Cooper-Hewitt Museum of Decorative Arts and Design, signif-
icantly our only museum outside Washington, D.C.

In Washington the fabled Patent Office Building became another
of the Smithsonian’s many mansions, this one to house both the
National Portrait Gallery and the National Collection of Fine Arts.
Here nomenclature presented conundrums fit for a taxonomist.
Since 1910 the Smithsonian had a “National Gallery of Art’ of
sorts, but Andrew Mellon had appropriated the generic name with

[15]

his famous gift in 1938. The Smithsonian’s art holdings then ac-
quired the title of National Collection of Fine Arts, a rather grandi-
ose handle for the eclectic, interesting, yet fragmentary group of
objets that dustily reposed in Hall 10 of the Natural History Mu-
seum. It was this material that became the nucleus of the Patent
Office’s north side, which was later renamed most descriptively
the National Museum of American Art.

As for the National Portrait Gallery, this was no mere copy of
a British model, but thanks to its first two directors, Charles Nagel
and Marvin Sadik, a uniquely original museum: a source of visual
information about famous Americans.

In 1968, the Woodrow Wilson International Center for Scholars
was chartered by Congress as a Smithsonian bureau (under an
independent board of trustees, like the Kennedy Center and the
National Gallery of Art). In the same year the Smithsonian Astro-
physical Observatory, a joint venture with Harvard University,
opened its largest field facility, later named the Fred Lawrence
Whipple Observatory, atop Mount Hopkins in Arizona. As the
decade drew to a close, we looked farther and farther ahead.
Ground was broken for the Hirshhorn Museum, and plans were
laid for a national magazine to report on everything that interested
the Smithsonian “or should interest it,” as founding editor Edward
K. Thompson put it.

As the new decade began, we received approval to build the
National Air and Space Museum by a stroke of fiduciary genius
that might stand every government agency in good stead today.
Congress had authorized the expenditure of some $40 million for
the new museum, and we had commissioned a fine design. But with
costs skyrocketing, the construction bids were coming in at $65
million and up. Representative Michael Kirwan, a former Regent
and faithful friend on Capitol Hill, warned of disaster if we re-
quested more money. Instead, we informed our architect, Gyo
Obata, of our dilemma, told him that there was no alternative to
a streamlined, stripped-down design. At the same time, we per-
suaded a new President, Mr. Nixon, the Budget Office, and Con-
gress that if there was to be a National Air and Space Museum
in Washington on July 4, 1976, we must act quickly and push our
design and budget through. For this we summoned a blue ribbon
team: two Regents, William Burden and James Webb, and the
charismatic figure of Michael Collins fresh from the first moon
voyage. This astronaut pleaded our cause as the Director-elect of
the world’s most popular museum of the future. Meanwhile, the

[16]

An aerial view of the Smithsonian Astrophysical Observatory’s primary site for
ground-based astronomy, the Fred Lawrence Whipple Observatory on Mt. Hop-
kins, Arizona, looking north toward Tucson. Several instruments, including a
10-meter-diameter gamma-ray collector and 1.5-meter and 61-centimeter optical
reflectors (at lower left), and support and maintenance facilities are located on
a mile-long ridge at the 7,600-foot level. The Multiple Mirror Telescope, a joint
facility with the University of Arizona, is located on the 8,500-foot summit.

Natural History Museum purchased a device of then novel design
and priceless worth for its investigations of previously unperceiv-
able minutiae, our first scanning electron microscope. The Institu-
tion also abetted the exploration of ephemera by supporting a new
branch in Cambridge, Massachusetts, the Center for Short-Lived
Phenomena.

The troubled 1970s saw new and diverse activity on and around
the Mall. For one thing, the Kennedy Center opened. For another,
citizens returned en masse to Washington to protest the tragic war
in Vietnam. Here we were able to serve in a manner unexpected
for repositories of fossils and art. When tear gas lacrimated the
city, more than 80,000 people found fresh air in the environ-
mentally contained Museum of History and Technology.

In another sort of departure from inhumane policies, we annulled
the rule requiring our researchers to present their papers for pre-
publication review. And under the aegis of Charles Blitzer and
David Challinor, the tasks of heading scholarly and scientific de-
partments were put on a rotating basis—no more permanent
chairmen—in hope of precluding the investiture of a bureaucratic
satrapy.

In 1970, the Archives of American Art, an invaluable repository
of the personal history and maturation of America’s artists, be-
came a Smithsonian bureau. Also, hospitality services for the
Institution were expanded through the Visitors Information and
Associates’ Reception Center, which now directs a corps of volun-
teers approximately as large as the Smithsonian’s staff. V1arc
opened in conjunction with the premiere issue of Smithsonian
magazine, whose subscribers were automatically National Asso-
ciates. The magazine won Regents’ approval just after Earl Warren
stepped down as Chief Justice and ex officio Chancellor of the
Institution. Although many members of the Smithsonian commu-
nity opposed our entering the hue-and-cry world of popular jour-
nalism (as a few diehards still do), and grumblings about media
grants were growing louder in many quarters, our newly appointed
Chancellor, Chief Justice Warren Burger, led the Regents in ap-
proving the magazine. Within two years, the magazine began
showing a profit and has added handsomely to trust fund accounts
over the years. It has also won kudos from both media experts
and the public, who now subscribe as Associates in numbers ex-
ceeding two million.

In July 1970, the Smithsonian was privileged to enter the lime-
light on Capitol Hill when Representative Frank Thompson chaired

[18]

a committee that reviewed our operations, policies, and finances.
While some bureau directors anticipated the hearings with dread,
I welcomed this expression of congressional interest in the Smith-
sonian, the first since 1855. We were fortunate that these overseers
corrected an ill-advised plan: the Hirshhorn Museum and Sculp-
ture Garden would not transect the Mall. Beyond that, the com-
mittee concluded that “the Smithsonian’s value is basic and should
be continued. Its work and research in science, education, history
and the arts and, of course, its many museums far overshadow
whatever criticisms . . . have been made.” Further afield, the Fort
Pierce Bureau in Link Port, Florida, began operations as a Smith-
sonian marine station.

In 1972, President Nixon returned from his historic visit to the
world’s most populous nation with a gift of two giant pandas from
the people of China. They were ensconced at the National Zoo,
which also prepared to embark on director Theodore H. Reed’s
masterful master plan. The Renwick Gallery opened at last, and at
Treasury Secretary John B. Connally’s invitation, the Group of
Ten international finance ministers convened in the Castle. (It is
alleged that during that meeting the dollar floated as a result of
two of the finance ministers’ getting stuck together in a balky
elevator.)

The following year, the Regents approved the introduction in
Congress of legislation authorizing planning for a Museum Sup-
port Center on federally owned land in Silver Hill, Maryland.
Having outgrown our buildings on the Mall and elsewhere, the
several museums could now responsibly plan for the curation,
preservation, and storage of priceless collections in what would be
a state-of-the-art facility. But as we focused on new beginnings,
two of the three former Secretaries died in 1973, and thus ended
an actuarial miracle: until the demise of Leonard Carmichael and
of Charles Greely Abbot, half of the eight men who had chaired
this Institution since 1846 were still alive. (The first four died in
office.)

In the Mall’s landmark event for 1974, the Hirshhorn Museum
and Sculpture Garden opened at last, and to lasting acclaim as a
repository of modern art. The following year the General Services
Administration conferred on us an erstwhile experimental farm
and army remount station in Front Royal, Virginia, which the Zoo
put to use as a center for breeding, research, and conservation of
rare animals. But 1975 was almost as notable for what did not
occur. In three signal instances the Smithsonian proved that it no

[19]

Yel Me VEO
\, a Psy 7 r a of Pye
e .

Ne RIN Ate RB ck LF
‘ } the , . {+ ‘oO . : s : -
a ’ Mes NA NBA ' iy ¥ cnt ~ a

" ;
Ay
\ 4 ~~ a Ths

VERY). | MT Nae eS

President Reagan meets Jayathu, an eighteen-month-old Asiatic elephant, a
gift from J. R. Jayewardene of Sri Lanka, at the White House, June 18, 1984.

Jayathu was accompanied by keeper Jim Jones of the National Zoological Park
and her Sri Lanka keeper, S. S. M. Seelaratna.

longer accepts everything that’s offered; the old image of “the
nation’s attic,” repository of things wanted nowhere else, may be
_ shelved, perhaps in someone else’s garage. We declined acquisition
- of the San Francisco Mint, of the Saint Louis Post Office, and of
_ the liner SS United States. We have also raised a few eyebrows by
_ turning down Howard Hughes’s plane, the Spruce Goose.
_ The nation’s Bicentennial witnessed celebrations almost every-
where, but the year 1976 was an especial one on the Mall where
our museums mounted twenty-three special exhibitions, a grand
pastiche collectively called “The American Experience.” At the
suggestion of Frank Taylor, director general of the U.S. National
Museum, this included the reopening of the Arts and Industries
Building with a recreation of the 1876 Centennial Exposition at
Philadelphia. In the Natural History Building the West Court had
been developed to house a cafeteria, gift shop, and Naturalist
Center. In New York, the refurbished and reorganized Cooper-
Hewitt Museum under the consummate direction of Lisa Taylor
opened in Andrew Carnegie’s mansion on Fifth Avenue. But the
signal premiere was on the Mall’s south side: the July first open-
ing of the National Air and Space Museum, which set some kind
of record by welcoming two million visitors in the first forty-nine
days.

In the following years, the Smithsonian Institution Press added
a new imprint, now known as Smithsonian Books, another pub-
lishing venture of merit for the public and revenue for the Institu-
tion. The Regents opened a special fund for Institution acquisitions,
special research, and education. The Office of Biological Conser-
vation became our coordinator and watchdog in the crucial realm
of conservation activities. The Assistant Secretary for Public Ser-
vice, Julian Euell, established the Office of Telecommunications
under the able direction of Chic Cherkezian, thereby adding to the
Institution’s outreach efforts the powerful aid of electronic media.

The decade’s last year saw several major new projects. For one,
the fifteen-year-old independent Museum of African Art, so far
as we know the only American museum of its ken, became a new
Smithsonian bureau. In the Southwest, the Multiple Mirror Tele-
scope, a joint venture with the University of Arizona at Mount
Hopkins, began scanning the skies with uniquely new acuity. In
the Canal Zone, the Smithsonian Tropical Research Institute estab-
lished a 13,000-acre biological preserve, the Barro Colorado Na-
ture Monument. At home, the Regents established a new fellow-
ship program for attracting eminent scholars and scientists in

[21]

residence.

In 1980, Walter Adey’s living coral reef—the first ever main-
tained apart from the sea—was put on public display at the Na-
tional Museum of Natural History. The National Portrait Gallery
acquired Gilbert Stuart’s most famous portraits, perhaps the truest
likenesses of George and Martha Washington, in a special partner-
ship with the Museum of Fine Arts, Boston. The following year,
the specially designed Thomas M. Evans Gallery opened at Na-
tural History as a showcase for traveling exhibitions. This was
soon followed by the establishment of the James E. Webb Fellow-
ships to promote excellence in the management of cultural and
scientific nonprofit institutions, and by two projects of first-magni-
tude importance to museology. First, in 1983 the Museum Support
Center was finally opened at Silver Hill, the world’s model facility,
we hope, for the maintenance of museum collections. Second, the
first stage of an institution-wide inventory was completed: the
painstaking task of identifying and counting all of the Smith-
sonian’s 100,000,000 artifacts and specimens. The results of this
“great counting” will include cybernetic access to data describing
every single one of our possessions.

The last years of my administration have seen the National Air
and Space Museum begin the project of placing its collection of
over one million photographs onto laser videodisc. Also during
this period, several Smithsonian museums jointly compiled a poly-
math exhibition, Treasures of the Smithsonian Institution, for dis-
play at the celebrated Edinburgh Arts Festival. It was August 1984,
two hundred years to the month from James Smithson’s introduc-
tion to the Highlands and the Age of Enlightenment. .

Finally in 1983, there was the planning, authorization, and early-
stage construction of the Smithsonian Center for African, Near
Eastern, and Asian Cultures. This largely underground facility,
initially endowed by Arthur M. Sackler to contain his priceless
collection of Asian masterworks, will connect with the Freer, and
will comprise also the fabled collections of the Museum of African
Art. Like the youngest child of a parent, this new museum com-
plex—the Quadrangle—must always have a special place in my
heart.

The money for it has been raised and committed; funds for the
structure’s programs have already been pledged by a goodly num-
ber of the governments and individuals across the vast arc of
mostly new nations of that half of the world represented in the
Center’s title. My chief regret at relinquishing the torch now is
leaving before the Quadrangle’s completion. But like the Smith-

[22]

Brian Fisher, a thirteen-year-old junior high school student from Chicago, be-
came the 75 millionth visitor to the National Air and Space Museum on May
24, 1984. He is greeted by museum director Walter Boyne. In the background,
three medieval-costumed trumpeters herald the occasion.

sonian itself, this building may never be finished save in a physical
sense. Its purpose, its inner life as manifested in scholarly pro-
grams and public appreciation of exhibits, will depend on those
who follow me and my generation of curators, scientists, historians,
and delineators of knowledge.

The new Center for African, Near Eastern, and Asian Cultures
rises steadily (as I write) in its vast pit, looking in embryo like
the beginnings of a coral reef in a tropical lagoon. The shelflike
ledges appear in place and will superimpose themselves layer by
layer. A delicate miniature forest of lacy pillars spreads up from
the base like the skeletal frame of sea fans or the bare branches of
gorgonians thrusting toward the light.

Soon this solid foundation will all be filled in and a verdant
green carpet will spread out like the top of the reef at low tide.
Look for water splashing here and there, with two projecting gal-
leries above, beautiful stranded granite boulders rich in color, set
amongst the vegetation, a dream come true.

Perhaps in years to come a similar Center for the New World
can arise in the quadrilateral space east of the Air and Space
Museum which was deeded to us some time ago by the Congress.
The statute specified that plans for any structure on that last Mall
building site must be approved in advance by Congress. (No one
need be taken unawares by some vast teeth of Cadmus springing
up overnight to obstruct the western vista from the Capitol towards
the panorama of Mall and monuments.) This was a wise decision,
one in which the Smithsonian concurred, testifying that we had
no wish to encumber space with sheer manmade mass to obliterate
openness, an increasingly precious commodity in our city.

If the Quadrangle becomes the success we anticipate—novel in
theme as well as structure—what a fine example it can serve for
the future in our world. It will serve as a model for still another
vast cultural history to be told and pondered: the sweep of two
continents from the Bering Sea to Cape Horn trodden by the
streams of emerging civilizations over the course of some 30,000
years. Cultures have emerged in the flowing over these new worlds,
from north to south, from west to east. No similar event can quite
so clearly be defined on the rest of the planet; no effort has so far
been attempted to describe in time and sequence this all-encom-
passing tidal flow which continues even today in a way whose his-
tory is only becoming known and whose future like the winds of
time cannot be discerned.

For the present our new Center for African, Middle Eastern, and

[24]

<

a ae ee ee

a

oa,

Asian Cultures is an experiment for the Institution, delving into
cultural history in a new mode. | am intrigued to speculate on the
pedestrian traffic this Center will bring, whether it will attract new
thoughts, new ways of understanding half of the world’s popula-
tion. As the winds change so may our perceptions also of our
fellow humans. Across the Mall, even on calm days, gusts and
eddies of breeze remind one that this is a vast, still, quite open
space. The wind, when it comes unpredictably, blows hither and
yon. Sometimes the flags round the Washington Monument stand
straight out, their whipping sound rising to a continuous muted
roar like rapids in a stream in spate.

Pandit Nehru once said, unforgettably, “Strange winds are blow-
ing across the face of Asia. We know not whence they come nor
where they go.” His prescient words evoked a thrilling current
within me like some music. Walking across the Mall one senses
such electricity in the air, and visions of a kind, whether past or
future, we cannot tell.

Beneath the ambient noises of everyday, the ephemera of today’s
news or tomorrow’s politics, there is a steady mass of public
opinions and notions, indeed convictions, which like the breezes
are independent of the noisemakers. In the turmoil and drama of
communication most people do not listen, and do not hear or sense
the presence of these notions. No opinion poll seems to be effective,
either. What then could we hear if we cared enough?

It seems that Eisenhower’s farewell words were prescient also,
often quoted but, like Cassandra’s, unheeded. ‘Beware the military-
industrial complex.” It is not so much the question of the triumphs
of technology. One cannot feel really alarmed by our nation’s
hegemony of military-industrial development. It moves anyway,
ponderously, imperceptibly even, irrespective of the overt shouting
and tumult.

What the past years have wrought is a state of mind that seems
more pervasive and indeed alarming than the surface evidence.
Faith is at a nadir today. Religion has succumed to niggling com-
plaints about other faiths, and to a fratricidal theocracy, unknown
since the Middle Ages. We may decry the rise of militant Islamic
sectarianism, but it is being mirrored all across the world in varie-
ties of fanaticism unparalleled in recent time. In the name of re-
ligion, pseudo-religion, or neo-religion, technology aids us today
in constant acts of terror, blasphemy, and horror, enough to tip
the balance so as to defeat faith itself. We have turned inward,
towards inner self and thus selfishness with no restraint. Ambition

[25]

Among the major works of art received by the Smithsonian this
fiscal year were (above) Edgar Degas’ portrait of Mary Cassatt,
purchased as a gift to the National Portrait Gallery from the
Morris and Gwendolyn Cafritz Foundation and the Regents’
Major Acquisition Fund, and (below) Edward Hopper’s 1950 oil
on canvas, Cape Cod Morning, one of the 169 paintings, sculp-
tures, and drawings given to the National Museum of American
Art by the Sara Roby Foundation.

A record-breaking 105,000 visitors viewed the Smithsonian Institution Traveling
Exhibition Service’s The Precious Legacy: Judaic Treasures from the Czecho-
slovak State Collections during its seven-week showing at the National Museum
of Natural History. Among the many dignitaries who saw the exhibition was
Chaim Herzog, president of Israel.

as of now is for oneself alone in every sense or sensibility. Mam-
mon is worshiped, a companion to envy and greed in the denial of
faith.

In this paroxysm of shock, there is a parallel settling down as
of an outward buffer towards a numbing new conservatism, a
search for conformity, the building of an overweening consensus.
If there is in truth only a consensus, then bureaucracy administered
by computer will be the answer to everything. There will be a
mood of pseudocomplacency covering an essential malaise of the
spirit in what may be observed. If possible, let it be routed out if
we are to succeed in the restoration of our real faith. The cur-
rent state is a presentiment of a failure in our culture. We must
assume that the ideals embodied in our history are capable of a
just and noble restoration, and perhaps this Institution is the one
to be the bellwether. Let us then summon those strange winds to
our cause and make the view of the Mall one of hope, of keening
winds blowing our flags straight and whipping shrill.

STAFF CHANGES

The Secretary’s Executive Committee was diminished by the loss
of three members in the last year. Paul Perrot, Assistant Secretary
for Museum Programs since 1972, became director of the Virginia
Museum of Fine Arts. Chris Hohenlohe, my erstwhile executive
assistant and, since 1979, the Institution’s valued Treasurer, left
in November to pursue private financial enterprises. (Ann Leven,
formerly of the Metropolitan Museum of Art and the Chase
Manhattan Bank, now serves as Chris’s successor.) Regrettably,
Larry Taylor, Coordinator of Public Information, retired.

Al Lerner has retired as founding director of the Hirshhorn
Museum and Sculpture Garden. He has been succeeded by James
Demetrion, who came from the Des Moines Art Center. Other new
Smithsonian executives include Conservation Analytical Labora-
tory director Lambertus van Zelst; Milo C. Beach, formerly of
Williams College, who will head the Sackler Gallery; and William
Moss, who left the John F. Kennedy Library to direct the Smith-
sonian Archives.

Within the Institution, Michael Robinson moved from the Smith-
sonian Tropical Research Institute to succeed Ted Reed as director
of the National Zoological Park. Bill Klein, former director of the
Radiation Biology Laboratory, became director of the Environ-

[28]

mental Research Center, and senior folklorist Peter Seitel was pro-
moted to director of the Office of Folklife Programs.

_ To these and many other members of our dedicated staff, we
owe a great debt of gratitude. As I have said before, the Smith-
sonian is a community of talented and interested people on whom
rests the Institution’s vitality and greatness. I take pride in having
been associated with them all.

[29]

The Board of Regents

The first meeting of the Board of Regents was held on January 23,
1984. After the Chancellor welcomed the new Regent, Mr. Samuel
Johnson, the Executive Committee reported on its January 4 meet-
ing at which the Acting Treasurer, Mr. Jameson, described the size,
purposes, and procedures of the Institution’s current fund invest-
ments. The Audit and Review Committee also reported on its
meeting of October 18, 1983, in which the members discussed the
status of the General Post Office building and collections manage-
ment policies, and conducted overviews of Smithsonian radio pro-
grams and the Smithsonian Institution Traveling Exhibition Ser-
vice. The Personnel Committee reported that it had found no con-
flict of interest whatsoever in the financial interests statements of
the executive staff.

Mr. Jameson gave a final report on the fiscal year 1983 trust
and appropriated funds, discussed the status of fiscal year 1984
funds, and noted the allowance from the Office of Management
and Budget for fiscal year 1985 appropriated funds. The Invest-
ment Policy Committee had met on November 17, 1983, to review
investment performance and strategies of the three investment
managers and reported that the annualized returns continued to
exceed market averages. To diversify and participate in an addi-
tional sector of the market, the committee recommended and the
Regents agreed to invest $5 million of trust funds in a mutual
fund specializing in science and technology issues. The committee
also proposed and the Regents approved establishing a more
liberal total return income payout rate to be applied to new en-
dowment funds which the Secretary will determine to have high
current income needs. Mr. Jameson presented a revised and up-
dated Five-Year Prospectus, Fiscal Years 1985-89, which was ap-
proved by the Regents.

Secretary Ripley reported on the construction of the Quadrangle,
on the status of fundraising, and, with the Assistant Secretary for
Public Service, Mr. Rinzler, on the preliminary planning for the
International Center. In other proposed actions, the Regents recog-
nized Abram Lerner’s accomplishments as founding director of the
Hirshhorn Museum and Sculpture Garden and named the balcony

[30]

.
~~

room in his honor, approved in principle the expansion plans for
the Cooper-Hewitt Museum, endorsed the preliminary planning
for a Smithsonian presence at the 1984 Edinburgh Festival, au-
thorized the Secretary to enter into agreements with the State of
Maryland to designate the Smithsonian Environmental Research
Center as a National Estuarine Sanctuary, and requested that the
congressional members of the Board of Regents introduce and
support legislation authorizing the nonreimbursable transfer of the
General Post Office building (along with appropriations for its
repair and renovation) and other legislation to authorize planning
and construction of science facilities for the National Air and
Space Museum, the Smithsonian Environmental Research Center,
the Smithsonian Tropical Research Institute, and the Whipple
Observatory. They also voted to appoint Messrs. Michael Son-
nenreich, John Al Friede, and Gustave Schindler and Mrs. Milton
F. Rosenthal to terms on the Commission of the National Museum
of African Art.

After Secretary Ripley discussed a variety of status reports, the
chairman of the Regents Search Committee, Dr. Bowen, described
the process of searching for Mr. Ripley’s successor, adding that in
all of this committee’s discussions and voluminous correspondence
a recurring theme was an appreciation of the Secretary for his
exceptional leadership of the Smithsonian over two decades. In
executive session Dr. Bowen presented the Search Committee’s
recommendation and the Regents elected Robert McCormick
Adams, Provost of the University of Chicago, as the ninth Secre-
tary. Following the meeting, Messrs. Bowen, Ripley, and Adams
met briefly with the heads of Smithsonian bureaus and offices in
the Great Hall and then, along with Mr. Humelsine, held a press
conference in the Under Secretary’s office.

The Regents’ Dinner was held on the preceding evening, Jan-
uary 22, in the National Museum of American History. After
dinner Mr. Ripley greeted the guests and awarded to Paul N.
Perrot, Assistant Secretary for Museum Programs, the Secretary’s
Gold Medal for Exceptional Service.

The Chancellor called to order the second meeting of the year
in the Regents’ Room at 9:30 a.m., May 7, 1984. The Executive
Committee reported on its meeting of April 11 in which this com-
mittee, acting on behalf of the Regents, requested the congres-
sional Regents to promote legislation effecting the reappointment
of Regents Armstrong and Higginbotham for the statutory terms
of six years. The Audit and Review Committee discussed its meet-

(31]

ing of March 8 in which they had an overview of the Archives of
American Art, discussed Coopers & Lybrand’s consolidated audit
of trust and federal funds for fiscal year 1983 and Report to Man-
agement, considered factors in the Institution’s construction priori-
ties, and received reports on the Office of Audits’ most significant
recommendations in 1983 and on improvements in Smithsonian
security programs. The Investment Policy Committee reported on
its review of the investment managers’ performance and the
Regents, acting on this committee’s recommendations, approved
fiscal year 1985 total return payout rates for the endowment funds.

Mr. Jameson presented a detailed report on the status of current
year funds and the processes of budgeting for fiscal years 1985
and 1986. After considerable discussion, the Regents voted to
authorize the Secretary to negotiate contracts for the financing,
construction, and operation of a new restaurant facility in the
National Air and Space Museum and for the financing, appro-
priate renovations, and operation of food services in other Smith-
sonian museums; to create a Special Exhibition Fund for under-
writing carefully selected, major, temporary exhibitions; to receive
the Annual Report, Smithsonian Year 1983; to appoint Barbara
Tuchman, Frank Stanton, and Robert McNeil to terms on the
Commission of the National Portrait Gallery, to appoint Helen
Neufeld and Colbert King to terms on the Commission of the
National Museum of African Art, and to appoint Donald Ander-
son, Walter Hancock, Bartlett H. Hayes, Jr., Eloise Spaeth,
Charles Parkhurst, Gene B. Davis, and Margaret Dodge Garrett
to terms on the Commission of the National Museum of American
Art; and to endorse the Smithsonian’s participation in the 1984
Edinburgh Festival and authorize the Secretary to draw upon un-
restricted trust funds for that purpose with the approval of the
Executive Committee.

Mr. Ripley reported on progress in the construction of the
Quadrangle, noted that prospects were excellent for meeting or
exceeding the original goal of raising $37.5 million in nonappro-
priated funds, and described the closing stages of the fundraising
campaign. He also presented a number of status reports on Smith-
sonian programs and activities.

On September 24, 1983, the National Board of Smithsonian
Associates unanimously recommended that two distinguished ben-
efactors of the Institution, Dr. Arthur M. Sackler and Mrs. Enid
A. Haupt, be the first inductees into the Order of James Smithson.
In recognition of their extraordinary contributions to the Smith-

[32]

sonian, the Board of Regents heartily endorsed their induction
into the Order at a suitable occasion to be arranged by the
Secretary.

On Sunday evening, May 6, President and Mrs. Reagan were
hosts to the Regents, members of the Smithsonian Establishment,
and Secretary and Mrs. Ripley at a dinner in the Blue Room of

4 _ the White House. During the proceedings the President raised a

toast to Secretary and Mrs. Ripley and Mr. Ripley returned the
honor.

The Regents’ third meeting of the year was called to order by
the Chancellor on September 17, 1984. The Executive Committee
reported on its meeting of August 22 in which it reviewed and
approved the Regents’ agenda. Mr. Humelsine announced that in
a poll through the mail, the Regents voted unanimously to induct
Secretary Ripley into the Order of James Smithson and to present
to Mrs. Ripley the Joseph Henry Medal. The Audit and Review
Committee reported that on May 24, it conducted an overview of
the National Zoological Park and of the Institution’s product
licensing program. In addition the Audit and Review Committee
discussed Coopers & Lybrand’s plan for their consolidated audit of
fiscal year 1984 funds and the Smithsonian’s measures toward im-
proved food service operations and facilities. The Investment
Policy Committee also reported on the performance of the invest-
ment managers as of June 30.

In presenting the Financial Report, Mr. Jameson described the
status of current year federal and trust funds as well as the pend-
ing action of the Congress on the fiscal year 1985 appropriations.
After discussion the Regents approved the fiscal year 1985 budget
for nonappropriated funds and the submission of the fiscal year
1986 budget request to the Office of Management and Budget.
The Regents also gave preliminary thought to a draft of the Five-
Year Prospectus, Fiscal Years 1986-1990, which they will consider
for approval at their next meeting.

Among other actions the Regents endorsed the Smithsonian’s
participation in the Festival of India and authorized some contin-
gent expenses; approved discussions leading to a donation of col-
lections from the U.S. Patent Model Foundation; authorized nego-
tiations with the Tupper family for their support of construction
of a laboratory and conference facility, to be named for Earl S.
Tupper, at the Smithsonian Tropical Research Institute; voted to
induct Mrs. Sara Roby into the Order of James Smithson in recog-
nition of her generous contribution of her fine collection of twen-

[33]

tieth-century realist masters to the National Museum of American
Art; and discussed the George Eastman House Board of Trustees’
suggestion that their photography collections be transferred to the
Smithsonian. Secretary Ripley presented a detailed report on the
construction, fundraising, and preliminary programming for the
Quadrangle and introduced a variety of other status reports.

In their final act in Secretary Ripley’s administration, the Re-
gents adopted the following resolution and ordered it to be laid
upon the record:

RESOLUTION

Whereas S. Dillon Ripley has served as Secretary of the Smith-
sonian Institution with great distinction for more than two
decades and has overseen its extraordinary development to
the benefit of the American people and the citizens of the
world;

Whereas Secretary Ripley has opened the halls of the Smith-
sonian for record-setting numbers of citizens to enjoy through
a vast array of stimulating exhibitions in the National Mu-
seums, through a greatly expanded traveling exhibition ser-
vice, and through both the printed and electronic media;

Whereas Secretary Ripley has added immeasurably to the Insti-
tution’s international stature in museum techniques for ex-
hibition and conservation, in studies of the physical and
natural sciences, history and art, and therefore in fostering
increased intercultural and international understanding; and

Whereas Secretary Ripley has continued to pursue significant
ornithological and ecological research enhancing the Smith-
sonian’s leadership in the conservation of nature:

Now, therefore, be it

Resolved by the Board of Regents of the Smithsonian Institution,
That S. Dillon Ripley is named Secretary Emeritus so that he
may continue to be of service to the Board from time to time
and Research Associate so that he may continue his scholarly
investigations to the credit of the Institution, and to that end
it is agreed that he shall be provided appropriate staff support
and a grant for his research.

Having adjourned their formal meeting, the Regents joined the
Regents Emeriti, invited guests, and the staff and volunteers of the
Institution for a noontime ceremony on the Mall marking the in-

[34]

&
}
Mi
é
t|
(
f

stallation of Mr. Adams as the ninth Secretary. Following a prelude
of traditional and patriotic music from the U.S. Navy Ceremonial
Band, the Chancellor introduced Mr. Ripley who expressed his
gratitude for the support and pleasure he received from the Re-
gents, the National Board of the Smithsonian Associates, the staff
and volunteers, and countless others. The Chancellor then pre-
sented a traditional brass key to Mr. Adams who delivered a brief

address on his view of Smithsonian purposes. There followed a

reception and luncheon in the Great Hall and Commons for the
Regents, Regents Emeriti, and invited guests.

On Sunday evening, September 16, the Chancellor and the Re-
gents held a formal dinner in the National Air and Space Museum
in honor of Secretary and Mrs. Ripley. As voted by the Board of
Regents and on their behalf, Mr. Humelsine inducted Mr. Ripley
into the Order of James Smithson and Mrs. Armstrong presented
the Joseph Henry Medal to Mrs. Ripley. The Vice-President gave
a toast to the Ripleys and announced that the Secretary will be
receiving the President’s Medal of Freedom. Concluding the cere-
monies pianist Bruce Steeg and two vocalists presented a selection
of musical favorites.

[35]

250

225

200

100

50

Ne
ul

200

150

100

50

SMITHSONIAN INSTITUTION OPERATING FUNDS
Fiscal Years 1965,1975,1980,1983,1984

(In $1,000,000’s)

FUNDS PROVIDED

Auxiliary
and
Bureau
Activities
Expenses

Nonappropriated
Trust Funds
(Gross Revenues)

Unrestricted

===] Restricted :
o = Federal Grants
: 7 and Contracts

SS
RERERS Federal
=f

Appropriations

FUNDS APPLIED |! To Plant and Endowment

Auxiliary and Bureau Activities Expenses

Administration and Facilities Services

ae Programs

Museum Programs

p31 Public Service

A

History and Art

Science

1980 1983 1984

:
:

ae ees = eee
5 a os ‘=_--= >

Smithsonian Institution « 1984
FINANCIAL REPORT

ANN R. LEVEN, TREASURER

Summary: Fiscal year 1984 marked a year of change at the Smith-
sonian, most notably the appointment of Robert McC. Adams as
the ninth Secretary of the Institution and the retirement of S.
Dillon Ripley as the eighth Secretary. Mr. Ripley’s extraordinary
legacy is nowhere more visible than in the Institution’s fiscal report.
In fiscal year 1965, Mr. Ripley’s first full year as Secretary, the
Institution’s operating budget was $30 million. For the year just
ended, Mr. Ripley presided over a greatly expanded Institution with
a budget tenfold that of fiscal year 1965.

Mr. Ripley’s twenty-year tenure, as referenced elsewhere in
Smithsonian Year, brought new vitality to the Institution, vitality
that cannot be measured in dollars. Mr. Ripley acted to shape the
form and focus of the Institution. New museums were added,
particularly in the arts. Under Dillon Ripley’s aegis, the Cooper-
Hewitt Museum, the Hirshhorn Museum and Sculpture Garden,
the Renwick Gallery, the Anacostia Neighborhood Museum, and
the National Museum of African Art joined the Smithsonian fam-
ily. The National Museum of American Art and the Portrait
Gallery found new homes in the Old Patent Office Building, lov-
ingly restored under Mr. Ripley’s guidance. The National Air and
Space Museum opened its new building in July 1976. In 1983 con-
struction began on the Quadrangle, Mr. Ripley’s last and most
expansive project on the Mall.

Public accessibility to American culture and diversity was fur-
ther enhanced by a variety of outreach activities, most notably
Smithsonian magazine, which stands as the preeminent publica-

[37]

tion of its kind in the world today. Other programmatic triumphs
include the annual Folklife Festival, the Archives of American Art,
and the extraordinarily active Associate programs. Were all this
not sufficient, research efforts, assistance to other museums, and
innovative exhibits enhanced the lay public’s and the scholars’
perspectives during Mr. Ripley’s tenure.

The accomplishments of the Ripley years have been supported
in substantial proportions by federal appropriations. In recent
years, nonappropriated trust funds have also contributed an in-
creasing share. In 1964 there were some 40 private donors to the
Institution; in fiscal year 1984 there were more than 30,000. The
unprecedented sum of $37.5 million in private funds was raised,
principally by Mr. Ripley, for the Quadrangle to match monies
pledged by Congress for the project.

Fiscal year 1984 marks the culmination of the growth, excite-
ment, and achievement of the Ripley years. The following pages
detail the Institution’s finances. It is clearly apparent that the
Smithsonian is a far more complex organization than it was in
1964. Four Treasurers served Mr. Ripley: Edgar L. Roy and Otis O.
Martin in the early years; T. Ames Wheeler from 1968 to 1979,
and Christian C. Hohenlohe from 1979 to 1983. John F. Jameson,
Assistant Secretary for Administration, served as Acting Treasurer
from November 1983 through July 1984. Ann R. Leven, former
Treasurer of the Metropolitan Museum of Art, joined the Institu-
tion in August 1984.

As the Smithsonian begins the Adams years, the Institution looks
forward to a continuation of the broad-based support of both the
Administration and the Congress and of the public at large for
further enhancement of its research, exhibition, education, and
collection management endeavors.

Operating Funds—Sources and Application

As may be seen from Table 1, the gross amount available for oper-
ations in fiscal year 1984 was $304,350,000, an increase of 9 per-
cent when compared to the previous year’s total of $277,974,000.
Federal appropriations contributed 51 percent of the fiscal year
1984 revenues, nonappropriated sources accounted for 44 percent,
and 5 percent were from federal agency grants and contracts.

[38]

After deducting expenses of the nonappropriated auxiliary and

_ bureau activities, net operating income increased by $18 million

over the prior year to $206,452,000. Federal funds accounted for
76 percent of net revenue, nonappropriated funds contributed 17
percent, a slight increase over fiscal year 1983, with the 7 percent
balance from federal grants and contracts. The application of funds

‘by all Smithsonian bureaus is outlined in Table 2, with further
supporting detail in other tables.

FEDERAL APPROPRIATION

Federal appropriations provide the core support for the Institution’s
continuing programs in research, exhibitions, education, publishing,
and collections management, including related administrative and
support services. They provide, as well, for the maintenance and
protection of the collections and physical plant.

Federal support for the Institution’s operating programs totaled
$156,683,000 in fiscal year 1984, an increase of $9.4 million over
fiscal year 1983. Although the majority of this increase—some $5.4
million—was required to cover inflationary increases in salaries
and other expenses, significant new funding of $4 million was
provided for a variety of program activities. Of this increase, $1.2
million was received for operations and program requirements at
the Museum Support Center, which in fiscal year 1984 completed
its first full year of operation, and for strengthening the conserva-
tion activity at the center. Complementing the growth in construc-
tion support for major renovations and repairs (discussed below),
funding was received in the operating account for professional
architectural and engineering services and for facilities maintenance
at two off-mall facilities—the Cooper-Hewitt Museum and the
National Zoological Park. Other significant increases were provided
for expansion of the Institution’s computing capabilities, for en-
hancing the security of buildings and collections, and for replacing
and upgrading scientific research equipment at the Astrophysical
Observatory and the Tropical Research Institute.

FEDERAL AGENCY GRANTS AND CONTRACTS

Support from federal agencies in the form of grants and contracts
totaled $14,878,000 in fiscal year 1984, an increase of 13 percent
over the previous year. These funds constitute an important source
of research support for the Institution while also benefiting the
granting agencies by providing access to Smithsonian expertise and

[39]

resources. As in prior years, the Smithsonian worked closely with
the National Aeronautics and Space Administration (Nasa). As
reflected in Table 3, expenditures under Nasa grants and contracts
totaled approximately $11.3 million in fiscal year 1984, primarily
for research programs at the Astrophysical Observatory. Sponsored
research included balloon-borne telescope observations, the study
of meteorite samples from the Antarctic, X-ray telescope studies,
and the design of hydrogen masers.

Support from other agencies provided an additional $3.6 million
for such varied programs as an ecological study of the Chesapeake
Bay Watershed, the 1984 Festival of American Folklife, and a
mariculture project to study and develop food sources from the sea.

NONAPPROPRIATED TRUST FUNDS

Income from nonappropriated trust fund sources including gifts,
grants, endowment and current fund investments, and revenue-
producing activities totaled $132,789,000 in fiscal year 1984. After
exclusion of expenses necessary to generate auxiliary and bureau
activity revenues, net income available for Institutional programs
equaled $34,891,000, an increase of $6.7 million or 24 percent, over
fiscal year 1983. Of the total net income, $24.7 million, or 71 per-
cent, was available for unrestricted program use and was distrib-
uted as approved by the Board of Regents. The balance of approxi-
mately $10.2 million was restricted, that is, available only for
purposes specified by the benefactor.

Restricted fund revenues of $10.2 million were up $1 million
from the previous year. They consisted of $5.9 million from gifts
and grants, $3.2 million from endowment investment income and
interest earned on restricted current fund balances, and $1.1 million
from other sources, primarily fundraising activities at the Archives
of American Art and sales desk activities at the Freer Gallery of
Art. Restricted endowment investment income served as the major
funding source for oceanographic research administered by the
National Museum of Natural History; for operations of the Freer
Gallery of Art (now included in the Center for Asian Art); and a
wide variety of research, exhibition, publication, and educational
activities at other Smithsonian bureaus. Major gift support was
received during the year for important additions to the collections,
including Portrait of Mary Cassatt by Edgar Degas and Callers by
Walter Ufer; for major exhibitions being developed by the National
Museum of Natural History and the Smithsonian Institution Trav-

[40]

eling Exhibition Service; and for research and archival activities
of the Archives of American Art.

Unrestricted funds include both those available for general op-
erating purposes and a smaller category of Special Purpose funds
that have been internally designated by the Institution. The former
and larger category, Unrestricted General Purpose funds, is derived

primarily from investment income and net revenues of the auxiliary

activities. In fiscal year 1984, net general purpose unrestricted
funds provided over $22 million for general Institutional needs, an
increase of some $5.8 million over the previous year. As displayed
in Table 5, this improved performance was due to increased income
generated by the Institution’s working capital pool invested at
favorable rates and to the strong performance of the auxiliary
activities.

As in past years, the Smithsonian Associate programs contrib-
uted handsomely to auxiliary activity revenues, on both a gross and
net basis, reflecting the continued popularity of the Smithsonian
magazine and the generosity of the Contributing Membership. In
fiscal year 1984, Contributing Members donated approximately
$2.7 million in unrestricted gift support. Income from the Museum
Shops benefited from generally strong sales enhanced by the new
shop at the Museum of American History and high visitation to all
museums. The Mail Order Program offered new items and an ex-
panded catalog. The Smithsonian Institution Press experienced
extremely favorable reviews and sales from its new recording,
“Big Band Jazz from the Beginnings to the Fifties,” and the popular
publication Treasures of the Smithsonian. In October 1983, the
Smithsonian-managed food service operations in the National Air
and Space Museum building and the Hirshhorn Museum and
Sculpture Garden were restored to concession management, affect-
ing the financial statements accordingly.

The general unrestricted funds supported a portion of the Insti-
tution’s administrative costs and most importantly provided for,
among other bureau activities, programs of the Cooper-Hewitt
Museum, the Visitor information and Associates’ Reception Center,
the Office of Telecommunications, and the Office of Folklife Pro-
grams. In addition, during fiscal year 1984, there were special
allotments for several major exhibitions and related activities, in-
cluding the Shanghai exhibition in the Thomas Mellon Evans
Special Exhibition Gallery, the Hirshhorn tenth anniversary exhibi-
tion, and Smithsonian participation in the Edinburgh Festival. The

[41]

development of a new, integrated personnel/payroll system also
received funding. Transfers to special purpose funds financed the
Collections Acquisition, Scholarly Studies, and Educational Out-
reach Programs ($2,250,000), stipends for pre- and postdoctoral
fellows under the Smithsonian Fellowship program ($1,738,000),
income-sharing to the bureaus for their discretionary uses ($638,-
000), research grants to Smithsonian professional staff ($400,000),
and other projects. An amount of $3.4 million was transferred to
plant funds for Quadrangle development and for the purchase of
a residence for Smithsonian Secretaries. To build the future re-
sources of the Institution, $3.3 million was transferred to unre-
stricted endowment.

The Unrestricted Special Purpose funds were supplemented by
approximately $4.6 million during fiscal year 1984, principally with
monies generated by bureau activities. Illustrative of such revenue
activities are fees charged for films at the National Air and Space
Museum and the admission and membership fees at the Cooper-
Hewitt Museum. Investment income earned on unexpended fund
balances and from designated endowments added $700,000. Gifts
and miscellaneous income, such as zoo parking receipts that are
being reserved for future expansion of parking facilities at the
National Zoo, brought in another $1.2 million.

Special Foreign Currency Program

Foreign currencies, accumulated primarily from sales of surplus
agricultural commodities under Public Law 83-480 and determined
by the Treasury Department to be in excess of the current needs
of the United States, are made available to the Institution through
the Special Foreign Currency Appropriation. In fiscal year 1984, an
appropriation of excess foreign currencies equivalent to $7,040,000
was received under this program by the Smithsonian. Included in
this amount was $4 million (as compared to last year’s $2 million)
to continue a program of grants to United States institutions for
field research and advanced professional training in fields of tradi-
tional Smithsonian interest and competence.

An additional $2 million was provided to the Indian rupee re-
serve account established in fiscal year 1980 to ensure continued
program support of the American Institute of Indian Studies. The

[42]

balance of $1,040,000 represented the second increment of support

_for the international effort to restore and preserve the ancient city

of Moenjodaro in Pakistan. An additional amount in nonconvertible
Pakistani currency is expected to be sought by the Institution to
fulfill the United States’ commitment to the project. Obligations
during the fiscal year by research discipline and country are pro-
vided in Table 8.

Construction

New funding in fiscal year 1984 for construction and renovation
projects at the Institution totaled $24,126,000. As shown in Table
9, a federal appropriation of $9 million was provided for restoration
and renovation of existing Smithsonian facilities. A further $3.5
million was designated specifically for construction and renovation
of National Zoological Park facilities both at Rock Creek Park and
Front Royal. The types of projects funded include facade, roof,
and terrace repairs necessary to maintain the structural integrity
of buildings; the planning and installation of fire detection and
suppression systems; improvements to utility systems to increase

energy efficiency and to provide stable temperature and humidity

conditions for the preservation of the collections; and repairs, mod-
ifications, and improvements to preserve and maintain the Institu-
tion’s buildings in a safe and energy efficient manner. In addition,
federal dollars covered construction of a much-needed veterinary
hospital at Front Royal. |

By September 30, 1984, the Institution had achieved its $37.5
million goal equal to one-half the estimated cost of constructing the
Quadrangle Center for African, Near Eastern, and Asian Cultures.
Of the total raised, $10.8 million was received in fiscal year 1984:
$8.1 million was from gifts and earned interest and $2.7 million
was a transfer from unrestricted trust funds. It must be noted that
Congress rescinded $8 million of the $36.5 million appropriated in
fiscal year 1983 for its share of Quadrangle construction. This
action was based on anticipated savings resulting from the unex-
pectedly low contract bid for construction. In taking this action,
Congress restated its commitment to sharing equally the project's
cost and indicated a willingness to reconsider its decision based on
identified need.

[43]

Other nonappropriated receipts include grant support for con-
struction of research facilities at the Tropical Research Institute, a
donation for relocation of an antique greenhouse, and interest
earned on unexpended gifts to plant funds. In addition to the $2.7
million for Quadrangle construction, transfers from unrestricted
funds were made for the purchase and improvement of a residence
for Smithsonian Secretaries and for mortgage payments on prop-
erty currently occupied by the National Museum of African Art.

Endowment and Similar Funds

As of September 30, 1984, the market value of the Smithsonian
Endowment Fund was $132,416,000, as compared to $132,031,000
on September 30, 1983. Of this, $131,113,000 is invested in the
Pooled Consolidated Endowment Fund under outside investment
management, $1,000,000 is on permanent deposit in the United
States Treasury as required, and the remaining $303,000 includes
restricted stock and donated real estate. As shown in Table 10, the
majority of the funds, 56 percent ($74,672,000), represents re-
stricted endowment, with income available only for the purposes
specified by the donor. The remaining 44 percent ($57,744,000) are
unrestricted endowment funds, with income available for general
support of the Institution. Certain of the unrestricted funds, such
as the Lindbergh Chair of Aerospace History Endowment, have
been designated by the Regents for specific purposes. A complete
listing of all endowment funds, together with current book and
market values, may be seen in Table 13.

Investment of the Pooled Consolidated Endowment Fund is
subject to policy guidelines established by the Board of Regents.
Funds are managed by professional advisory firms under the over-
sight of the Investment Policy Committee and the Treasury. During
fiscal year 1984, the number of managers was increased to four
with the addition of Granahan-Everitt Investments, Inc. As of the
end of the year, the respective portion of the fund by manager was:
Fiduciary Trust Company of New York (46 percent), Batterymarch
Financial Management (30 percent), Torray Clark & Company (20
percent), and Granahan-Everett Investments, Inc. (4 percent).

For fiscal year 1984, the total rate of return (market appreciation
as well as interest and dividend yield) of the Pooled Consolidated

[44]

Endowment Fund, as calculated by an independent investment
measurement service, was +0.4 percent, as compared to +4.6 per-
cent for the Standard & Poor’s 500 Average and +2.2 percent for
the Dow Jones Industrial Average, both calculated on the same
basis. The year-end market values and the recap of activity of the
Consolidated Endowment over the past five years are reflected in
Tables 11 and 12, respectively.

Under the Total Return Income policy followed by the Institu-
tion, total investment return is defined as yield (interest and divi-
dends) plus appreciation, including both realized and unrealized
gains. A portion of this return is made available for expenditure
each year, and the remainder is reinvested as principal. This total
return income payout is determined in advance of the fiscal year
by the Board of Regents based on a review of anticipated interest
and dividend yields, support needs of the Institution’s bureaus and
scientists, inflationary factors, and the five-year running average of
market values, adjusted for additions or withdrawals of capital.
After income payout of $3,820,000 in fiscai year 1984 to endow-
ments in the Pooled Consolidated Endowment Fund, $2,794,000 of
excess interest and dividend yield was available for reinvestment
into endowment principal. Net transfers to endowment, primarily
to unrestricted endowment funds, provided an additional $3.5
million with $283,000 received in gifts and other income. At the
request of the donor, balances in the Shryock Endowment for
Docents were transferred to restricted current funds.

Upon request, a listing of the securities held in the Pooled Con-
solidated Endowment Fund as of September 30, 1984, may be ob-
tained from the Treasurer of the Institution.

ee ee a as. a ay ~

—

Related Organizations

The Woodrow Wilson International Center for Scholars, the Na-
tional Gallery of Art, and the John F. Kennedy Center for the
Performing Arts were established by Congress within the Institu-
tion. Each organization is administered by its own board of trustees
and reports independently on its financial status. Fiscal, administra-
tive, and other support services are provided the Woodrow Wilson
International Center for Scholars on a reimbursement basis; office
space is made available for center operations.

[45]

An independent nonprofit corporation, the Friends of the Na-
tional Zoo (FONZ) operates under contract a number of beneficial
concessions for the National Zoological Park. During calendar year
1983 (FONZ’s fiscal year), FONZ concession and rental fees to the
Smithsonian amounted to approximately $431,000. In addition,
FONZ contributed other important financial and volunteer support
to zoo programs. Additional information on FONZ is to be found
elsewhere in Smithsonian Year 1984.

Reading Is Fundamental, Inc., associated with the Institution
since 1968, now operates as an independent, separately incor-
porated entity dedicated to the improvement of reading abilities
in children. Primary support is derived from private contributions
and a federal contract with the Department of Education to operate
the Federal Inexpensive Book Distribution Program. Administrative
services are offered by the Institution on a contract basis.

For fiscal year 1984, the Smithsonian also provided administra-
tive and fiscal assistance to the Visions Foundation, a start-up
venture in the arts.

Accounting and Auditing

The Institution’s funds, federal and nonappropriated, are audited
annually by the independent public accounting firm of Coopers
and Lybrand. Their report for fiscal year 1984 is reprinted on the
following pages. The Smithsonian’s internal audit staff audits
Smithsonian activities and financial systems throughout the year.
Additionally, the Defense Contract Audit Agency conducts an
annual audit of grants and contracts received from federal agencies
and monitors allocated administrative costs.

The Audit and Review Committee of the Board of Regents met
several times during the year pursuant to their responsibility under
the bylaws of the Institution. The committee is charged with
reviewing the Smithsonian’s accounting systems and _ internal
financial controls; facilitating communication between the Board
of Regents and the internal audit staff, the independent accounting
firm, and the General Accounting Office; and reviewing operations
of the Institution for compliance with approved programs and
policies.

[46]

Taste 1. Financial Summary
(In $1,000s)

FY 1982 FY 1983 FY 1984

INSTITUTIONAL OPERATING FUNDS
FUNDS PROVIDED:

Federal Appropriations—Salaries & Expenses ......... $131,170 $147,256 $156,683
Federal Agency Grants & Contracts ..............005: 13,217 13,125 14,878
_ Nonappropriated Trust Funds:

Seeekor Restricted Purposes .............00c0ccesececs 6,821 9,162 10,182

For Unrestricted & Special Purposes:
Auxiliary & Bureau Activities Revenues—Gross ... 97,350 104,129 117,550
SEPRCRRIGE, EXPCTEGS 0.0 5 cians ou s¥s teine nin son’ (88,596) (89,397) (97,898)
Auxiliary & Bureau Activities Net Revenue ....... 8,754 14,732 19,652
Investment, Gift, & Other Income ............... 4,808 4,302 5,057
Total Net Unrestricted & Special Purpose Revenue 13,562 19,034 24,709
Total Nonappropriated Trust Funds*—Gross ...... 108,979 117,593 132,789
a eT oe ee 20,383 28,196 34,891
Total Operating Funds Provided—Gross ............. 253,366 277,974 304,350
SNE ass teat a ns acta ow $164,770 $188,577 $206,452

FUNDS APPLIED:

EIR, wc kc nis on coc cdviss leh ewe bow eva ees $ 64,837 $ 68,895 $ 74,134
Sean GPvetnead KEcCOVETY «...< 020. scsccssesees (2,487) (2,264) (2,226)

TS a 26,762 30,979 33,011

ER Eo oily oie 6 ds Sp ia os vin hed m Exe as « 3,782 2,843 3,526

CTE Le eee eee 8,539 9,702 10,976

es eee ee 9,533 13,342 14,805

Associates & Business Management ................. 543 1,057 884

emnRTORIOM—FeGcral** .... 02... 0ccsscuscecccccns 9,719 11,032 12,201

—Nonappropriated Trust Funds ................... 5,733 7,226 8,211
Less Smithsonian Overhead Recovery ............ (5,338) (6,331) (6,528)

ES ee a 39,327 43,653 46,821

Total Operating Funds Applied ..................... 160,950 180,134 195,815

Transfers (Nonappropriated Trust Funds)

Runtesericeea Funds—lo Plant ..........00csseecees 1,064 2,069 3,424
—To Endowment .............. 2,259 3,084 3,313
Restricted Funds—To Endowment ................. 318 637 222

Total Operating Funds Applied & Transferred Out .... $164,591***$185,924 $202,774

CHANGES IN NONAPPROPRIATED
TRUST FUND BALANCES:

Restricted Purpose (Incl. Fed. Agency Gr. & Contracts) $ (45) $ 1,765 $ 1,426

Unrestricted—General Purpose ..............-.00000: 5 28 10
SNPEIAL PUSPOSE 2... fences nccavedbanses 404 860 2,242

NETO Pe osc Lawes cccceccvewes de ue veuees $ 364 $ 2,653 $ 3,678

YEAR-END BALANCES—
NONAPPROPRIATED TRUST FUNDS:

EE Se eee $ 5,906 $ 7,671 $ 9,097
Unrestricted—General Purpose ..............e00eees 5,048 5,076 5,086
REO, PREMIGE: ow os clad pt <gues v dtwwnes 13,003 13,863 16,105

ce ds hin w bwin oo. RGie cc ee bible een enemies $ 23,957 $ 26,610 $ 30,288

OTHER FEDERAL APPROPRIATIONS

Special Foreign Currency Program .............2+45: $ 4,320 $ 2,000 $ 7,040
IE ele tee fo a eens hd ees ee 9,744 46,500 4,500

Total Federal Appropriations (Incl. S&E above) ..... $145,234 $195,756 $168,223

*Figures do not include gifts and other income directly to Plant and Endowment Funds: FY 1982—
$2,197,000; FY 1983—$15,048,000; FY 1984—$8,484,000.

**Includes unobligated funds returned to Treasury: FY 1982—$124,000; FY 1983—$62,000; FY 1984—
$102,000.

***Includes $185,000 available for FDR Centennial carried forward from FY 1981.

TABLE 2. Source and Application of Operating Funds
Year Ended September 30, 1984

(Excludes Special Foreign Currency Funds, Plant Funds and Endowments)
(In $1,000s)

Nonfederal Funds

Unrestricted Restricted
Total Aux- Spe- Grants
non- iliary cial and
Federal federal activi- _—pur- con-
Funds funds funds General ties pose General tracts
FUND BALANCES—10/1/83 . $ — $ 26,610 $ 5,076 $ — $13,863 $ 7,421 $ 250
FUNDS PROVIDED
Federal Appropriations ....... 156,683 = — — a — —
Investment Income .......... — 7,023 3,108 — 679 3,236 —-
Grants and Contracts i... — 14,876 — — — — 14,876
CES 5 ac oe etn cde --= 8,701 35 2,698 109 5,859 _
Sales and Revenue ........... — 114,852 — 112,179 2,673 — —
Other «si ebeerses e ee a — A245 (6) = 1132 1,087 2
Total Provided ........ 156,683 147,667 3,137) PLL Sre 4,593 10,182 14,878
Total-Available ><... ; $156,683 $174,277 $ 8,213 $114,877 $18,456 $17,603 $15,128
FUNDS APPLIED
Science:
Assistant Secretary .......... 524 512 28 — 38 117 329
Natl. Mus. of Nat. History/
Museum: 6f ian | socal eks os 18,734 3,814 310 — 794 1,387 1,323
Astrophysical Observatory ... 7,441 15,300 2,244 — 646 222 12,188
Less Overhead Recovery ... — (2,226) (2,226) — — — ==
Tropical Research Institute ... 3,424 784 103 — 413 264 4
Environmental Rsch. Center .. 3,098 481 74 — 90 19 298
Natl. Air & Space Museum ... 7,A77 2,666 39 — 2,354 134 139
Natl. Zoological Park ........ 10,720 465 66 — 225 44 130
Total “Serence’ os tt 51,418 21,796 638 cae 4,560 2187 14408
History and Art:
Assistant Seeretary \!: 26... 24% 598 1o5 108 — 7 —_— _
Natl. Mus. of Am. History ... 9,637 1217 245 _- 643 325 4
Natl. Mus. of American Art .. 4,465 698 48 — 123 526 1
Natl. Portrait Gallery ........ 3,216 1,599 17 — 807 775 —
Hirshhorn Museum .......... 2,851 93 9 — 73 5 i | —
Center for. Asian Art. . 2.0%... 1,058 1,584 50 — 37 1,497 —
Archives of American Art .... 693 929 ir — — 928 —
Cooper-Hewitt Museum ..... 843 2,055 739 — 1,022 195 99
Natl. Mus. of African Art .... 1,043 210 73 — 104 33 —_
Anacostia Museum .......... 741 34 32 — — Z —

se

Total History and Art . 25,145 8,534 1,322 — 2,816 4,292 104

Funds

Public Service:

Assistant Secretary
Reception Center
Telecommunications
Smithsonian Press

Total Public Service ...

Museum Programs:
Assistant Secretary
Registrar
Conserv. Analytical Laboratory
Libraries
ae ae a
Traveling Exhib. Service
Archives
National Museum Act

oeereeeeeeeer eevee eeanee
nae Min ne ee © 2.8 6 O86 es 8 e

Total Museum Programs

Special Programs:
Am. Studies & Folklife Pgm. .
Int. Environ. Science Pgm. ...
Academic & Educational Pgm.
Collections Mgt./Inventory ...
Major Exhibition Program ....
Museum Support Center
JFK Center Grant

Total Special Programs .

6,6. 8 ae

Associate Programs .........
Business Management
Muamministration ..............

Less Overhead Recovery ...
Facilities Services

“eee ee weer eee

Transfers Out/(In):

MEET ik worse s-cie'e o0 twas
Coll. Acq., Schol. St., Outreach
Net Auxiliary Activities ......
Other Designated Purposes ...
Plant

SwPeR Gah Gee ecoecnenaeseescvngase

a8 ea «baie wee ei ele 6-8

Total Transfers

FUND BALANCES 9/30/84 ..

(In $1,000s)

Federal
funds

12,099

45,650

102*

102

Total Funds Applied ... $156,683
— $ 30,288 $ 5,086 $

*Unobligated funds returned to Treasury.

Total
non-
federal
funds General
338 2d 2
589 547
716 465
10,676 36
12,319 1320
470 48
it —_s
337 309
(40) —
3,241 182
a Og 110
4,120 649
801 474
1,666 251
269 —
2,736 yeas
60,313 782
24,280 —_-
8,288 7,985
(6,528) (6,528)
TAZ, £22,
— 2,250
— (18,375)
— 4,541
3,424 3,400
3,535 3,296
6,959 (4,888)

Nonfederal Funds

Unrestricted

Aux-
iliary
activi-
ties

10,634

Spe-
cial
pur-
pose

Tas.e 2. Source and Application of Operating Funds—continued
Year Ended September 30, 1984
(Excludes Special Foreign Currency Funds, Plant Funds and Endowments)

Restricted

Grants
and
con-
General tracts

11
(40)
80

1,486

59,421
24,280
78

18,375
638

— $16,105 $ 8,810 $

287

Taste 3. Grants and Contracts—Expenditures
(In $1,000s)

Federal Agencies FY 1982 FY 1983 FY 1984
Agency for International Development ......... $ — $ — $ 428
Department of Comnmich@e VGA. cna cece a wacas 174 (7) 57
Demartenent of Detenoe <.. ccccacssus aac cena ee 1,001 1,299 1,056
LONE Gk AUER, on ns oa Ny aie ese weil’ s Lacie 448 358 227
Department of Health and Human Services ..... 325 280 273
Department OF TekerO8 - og poo sa vids bak > dvemenan 268 238 204
National Aeronautics and Space Administration* 9,303 9,551 11,275
National Science Foundation** ................ 1,079 928 820
CREE coer ca lars ak nets cc dete eek eee 837 415 501

RA hdd chien awkle 5 Waele ok nam wees aes $13,435 $13,062 $14,841

*Includes $264,000 (FY 1982), $197,000 (FY 1983), and $399,000 (FY 1984) in subcontracts from
other organizations receiving prime contract funding from NASA.

**Includes $230,000 (FY 1982), $196,000 (FY 1983), and $250,000 (FY 1984) in NSF subcontracts
from the Chesapeake Research Consortium.

TasLe 4. Restricted Operating Trust Funds *
Fiscal Years 1982-1984
(In $1,000s)

Net Fund
in- bal-
Total Trans- crease ance
Invest- Miscel- rev- Deduc- fersin (de- end of
Item ment Gifts laneous enue tions (out) crease) year
FY 1982—Total ......... $2,886 $3,154 $ 781 $ 6,821 $6,571 $ (77) $ 173 $5,719
FY 1983=Totals:.. vas% $2,971 $5,419 $ 772 $ 9,162 $6,823 $ (637) $1,702 $7,421
FY 1984:
National Museum of
Natural History ...... $1,150 $ 837 $ 107 $ 2,094 $1,387 $ — $ 707 $1,441
Astrophysical Observatory 91 122 — 213 222 — (9) (16)
Tropical Research
she. saws cGliiares 44 195 — 239 264 — (25) 235
National Air & Space
DASE os aves 4.5 eines 69 54 — 123 134 (25) (36) 79
National Zoological Park 19 69 — 88 44 os 44 149
CGE SCIICE og wae a wks 139 130 — 269 136 (113) 20 582
National Museum of
American History .... 58 239 1 298 325 2 (25) 527
National Museum of
American Art ........ 66 522 9 597 526 — 71 480
National Portrait Gallery 18 772 (2) 788 775 — 13 179
Hirshhorn Museum ..... 70 11 — 81 11 — 70 736
Center for Asian Art .... 1,131 69 630 1,830 1,497 (15) 318 1,552
Archives of American Art 45 778 320 1,143 928 — 215 530
Cooper-Hewitt Museum . 72 238 — 310 195 — 115 693
Traveling Exhibition
I mars he hs & ke 79 1,415 —_ 1,494 1,486 — 8 930
Ai Ceee ee ek 185 408 22 615 641 (71) (97) 713
Total FY 1984 .. $3,236 $5,859 $1,087 $10,182 $8,571 $ (222) $1,389 $8,810

eetlieeeeseesesesattiiies===ssssss— ne eet eee

*Does not include Federal Agency Grants and Contracts.

Taste 5. Unrestricted Trust Funds—General and Auxiliary Activities
Fiscal Years 1982-1984
(In $1,000s)

Item FY 1982 FY 1983 FY 1984
FUNDS PROVIDED
General Income:
tr otra ne oo ee an Cee m A ee $ 2,921 $ 2,489 $ 3,108
ee a a 18 24 35
i De ne el a oan oe 83 46 (6)
eer AceSC@aL LOCOME. 6. ccs vvcs ssh va ver 3,022 2,559 3,137
Auxiliary Activities Income (Net):
I OO, She ee en so ge a erent so 8,126 9,864 13,075
Business Management:
—Museum Shops and Mail Order ......... 856 2,710 3,711
—Concessions, Parking and Food Services .. 1,513 1,670 1,691
NE he ee cin yn ace GS (322) (300) (206)
EE ne Pee (2,544) — —
EN ko to kk dus piv wwe ee nc 670 232 1,158
eRe EXRABAEIONS occ sce e cee a dale es (298) (363) (421)
i oe ec ee oe ee oe 11 19 5
Total Auxiliary Activities .............. 8,012 13,832 19,013
Total Funds Provided (Net) ............. 11,034 16,391 22,150
EXPENDITURES AND TRANSFERS
Administrative and Program Expense .......... 12,505 14,727 16,769
Less Administrative Recovery ................. 7,825 8,595 8,754
SC el 4,680 6,132 8,015
Less Transfers:
To Special Purpose for Program Purposes .... 3,328 5,205 7,429
ENE oc gs che Ws 0 ow GWE « oe sarees s 1,000 2,005 3,400
meemmmowanent Fonds ...........ssccccccace 2,021 3,021 3,296
NET ADDITION TO FUND BALANCE ........ 5 28 10
peerees FELINE) BALANCE ..... 2.25. ceeecwn $ 5,048 $ 5,076 $ 5,086

*Effective FY 1983, the Division of Performing Arts recording program was trans-
ferred to the Smithsonian Press and the performing arts activities for which tickets
are sold to the public were transferred to the Resident Associate Program.

[51]

TaBLe 6. Auxiliary Activities Fiscal Years 1982-1984

(In $1,000s)

Sales Net
and Less rev-
other cost of | Gross Ex- enue**
Activity revenue’ Gifts sales revenue penses_ (loss)
EM TABS nt tier aeh doo! $ 92,668 $ 1,757 $56,166 $38,259 $30,247 $ 8,012
Dye 1: RD RT 9 ie $ 98,826 $ 2,171 $57,527 $43,470 $29,638 $13,832
FY 1984:
Associates werner iss eo eers $ 69,798 $ 2,698 $46,127 $26,369 $13,294 $13,075
Business Management:
—Museum Shops* ..... 26,762 — 14,752 12,010 8,299 23,7 Lh
—Concessions/Parking/
Food Services «7s: . 2,617 — 45 2,572 881 1,691
Be Se Ci ce Wire. ¢ Aes 97 ais ase 97 303 (206)
Smithsonian Press: «sss 11,792 — 3,703 8,089 6,931 1,158
Traveling Exhibitions .... 1,030 — 671 359 780 (421)
Photo Services
(Administration) ....... 83 — 41. 72 67 5
Total FY +1984 2/6. $112,179 $ 2,698 $65,309 $49,568 $30,555 $19,013

*Includes Museum Shops and Mail Order.

**Before revenue-sharing transfers to participating Smithsonian bureaus of $380,000 (FY
1982); $486,000 (FY 1983); and $638,000 (FY 1984).

[52]

Tas.e 7. Unrestricted Special Purpose Funds

Fiscal Years 1982-1984
(In $1,000s)

Revenue
Gifts
a Bu- and
it / In- reau other
‘i vest- activi- rev-
Item ment ties enue
ES Ee ae $719 $2,925 $1,067
BT Seeds eos tb 8 $686 $3,132 $1,057
Y 1984:
‘National Museum of
Natural History ...... $50 $ wire, 0
Astrophysical
mobservatory ......... 10 137 65
‘ropical Research
Sunmic) sw. J... ...-... 22 131 —
Jational Air and Space
eee 243 1,400 35
nvironmental Research
sa 7 Ze 16
ational Zoological Park 210 — 200
lational Museum of
American History .... 23 13 85
National Museum of
American Art ........ 14 5 139
National Portrait Gallery 5 9 58
dirshhorn Museum ..... 15 = 17
-ooper-Hewitt Museum . 1 849 347
Jational Museum of
MAfrican Art .......... _ 4 6
Dffice of Telecommunica-
EE Se — 3 —
dability Reserves ....... — — —
Jnallocated Coll. Acq.,
Schol. Studies, and
MueeereaCh w........-.. — a —
Fellowships ............ 24 _ —
Museum Support Center
mequipment ........... — a a
ee 55 89 243
Total FY 1984 .... $679 $2,673 $1,241

[53]

Total Trans-
rev- _ fersin
enue (out)

$4,711 $2,784

212 502
153 234
1,678 73
46 88
410 90
121 566
158 23
72 743

32 327

ns 04 23
13 18

3 19

_ 133

24 1,363
387 3 3=2,227

Deductions
Bu-

Pro- reau
gram activ-
ex- ity ex-
pense pense
$4,908 $2,183
$6,861 $2,232
$ 794 $ —
491 155
193 220
1,433 921
80 10
225 oo
638 5
119 4
799 8
73 —
374 648
101 3
167 33
16 —
1,194 —
269 —
739 27

Net Fund

in- bal-
crease ance

(de- _end of

crease) year

$ 404 $13,003

$ 860 $13,863

68 679
(26) 153
(603) 1,993
44 175
275 ~ 2,310
44 482
58 175
a 135
286 464
198 202
(73) 48
(178) 274
(16) 3,273
133 570
193 += 1,034
(269) 401

1,848 2,883

Neen lll

Effective in FY 1983, the Chesapeake Bay Center for Environmental Studies was merged with the Radiation
Biology Laboratory to form the Smithsonian Environmental Research Center.

TaBLe 8. Special Foreign Currency Program
Fiscal Year 1984—Obligations
(In $1,000s)

System- Astro-

atic and physics Mu-

environ- and seum

Archae- mental earth pro-

Country ology biology sciences grams

Res ee es $4,730 $415 $111 $405
MUMEMEE: WC Aeorccten! e,20 cs 1 3 — —
Pakictem-(. . 2e.7%... 1,137 239 6 —
1S ea $5,868 $657 $117 $405

Grant

admin-

istra-
tion Total
$253* $5,914
— 4
19 1,401
$272 $7,319

*Includes $180,000 for translation services in support of all programs.

TABLE 9. Construction and Plant Funds Fiscal Years 1982-1984

(In $1,000s)

Sources FY 1982
FUNDS PROVIDED
Federal Appropriations:
National Zoclocical Park o.oo oc: sca ee es ome $ 1,104
Restoration and Renovation of Buildings ..... 7,680
CPutcrdeanie he a oa at te nid dale Gra ee eras 960
Total Federal Appropriations ........... 9,744

Nonappropriated Trust Funds:
Income—Gift and Other

Special Exhibits Gallery «0.40050. e¢e5s500 1
Smithsonian Environmental Research

Center—Gamn on Sale. u.ic scien i owe wader ——
Smithsonian Tropical Research

Institute—Research Facilities ............ —
Erection of Jacksonville Bandstand ......... —
Cooper-Hewitt Museum
American Art and Portrait Gallery Building 183

Quadratigte- and Related 7... «06.2 <0 als ose 1,650
Smithsonian Institution Building South
EMIPEIEE? Gin ints cae hW snows oie, ae ee a ee aaa 64
Bequest of Real Estate. 22.33. o0062'Vt cus some 225
Belmont Conference Center—Gain on Sale .. —
Horticulture Antique Greenhouse .......... —
‘FOUL SECOND: cas f anaiciey 3 Bake were 2,154
Transfers from Current Funds:
National Museum of African Art ............ 24
CEA eso kilo nui ie ave Sie SCN sear 1,040
Bact Gaston yk hones ak waite puma nupeeaa es —
Secretaries’ “MEswsenee: - 6 lii-nia-dia wid biwolnceo te ow eee —
Sear Tramelens Ss ick var eee eae 1,064
Petal Patds. Prowiaed: occ cng eka ckao ees $12,962

FY 1983 FY 1984

$ 1,550 $ 3,500

8,450 9,000
36,500 (8,000)
46,500 4,500

44 —

66 20

174 12
163 32

21 21
14,574 8,098
5 3
1,405* =
— 16
16,452 8,202
24 24
2,040 2,700
5 pee

— 700

2,069 3,424

$65,021 $16,126

*Total proceeds realized of $1,993,000 of which $1,750,000 was directed to construction
of the Museum Support Center and $208,000 was transferred to endowment funds.

TABLE 10. Endowment and Similar Funds September 30, 1984

Book value

Market value

ASSETS

Pooled Consolidated Endowment Funds:
ee an Eeertvalerts ici css ks ekbineiss

FUND BALANCES
Unrestricted Purpose: True Endowment .....

$ 13,525,970

$ 3,953,128

$ 13,525,970

. IRS PEN, ii ins Wie R is a's ss wb caer oo 11,346,884 11,431,145
| es eS a a 4,048,125 4,408,300
i ee sd a 87,939,422 101,747,648
moe pecs Funds 2.......2:590s..:.. 116,860,401 131,113,063
Nonpooled Endowment Funds:

Loan to U.S. Treasury in Perpetuity ....... 1,000,000 1,000,000
To 41,946 41,946
ya OD rae | ere 10,000 9,600
INTERN oe acid was ¢ b's c-apisinnrmears 1,999 12,000
7. Re Ada ia i iliNeens aa al aor aD RO 239,000 239,000
Total Nonpooled Funds .............. 1,292,945 1,302,546

Total Endowment and Similar Fund Balances . $118,153,346

$132,415,609

$ 5,014,889

Quasi Endowment .... 49,312,990 52,728,976

Total Unrestricted Purpose ............... 53,266,118 57,743,865
Restricted Purpose: True Endowment ..... 48,031,154 55,770,264
Quasi Endowment .... 16,856,074 18,901,480

etal Restricted Purpose .:.......:0025+.. 64,887,228 74,671,744
Total Endowment and Similar Fund Balances .. $118,153,346 $132,415,609

Taste. 11. Market Values of Pooled Consolidated Endowment Funds
(In $1,000s)

Fund 9/30/80 9/30/81 9/30/82 9/30/83 9/30/84
Unrestricted .......... $28,384 $30,399 $35,974 $ 54,677 $ 56,592
Sg | a ae 20,771 20,472 22,596 32,096 31,125
Other Restricted ...... 28,175 27,101 30,288 43,911 43,396

ME, ete as cs w oo $77,330 $77,972 $88,858 $130,684 $131,113

Taste 12. Changes in Pooled Consolidated Endowment Funds

for Fiscal Year 1984
(In $1,000s)

Gifts Inter- Change

Market and_ est and Income in Market

value trans- divi- paid Sub- market value

Fund 9/30/83 fers dends* out total value 9/30/84
Unrestricted ..... $ 54,677 $3,083 $2,821 $1,378 $ 59,203 $(2,611) $ 56,592
ses 2 32,096 — 1,597 1,029 32,664 (1,539) 31,125
Other Restricted . 43,911 807 2,196 1,413 45,501 (2,105) __ 43,396
NGG pangs a $130,684 $3,890 $6,614 $3,820 $137,368 $(6,255) $131,113

er

*Income earned, less managers’ fees of $546,041.

TaBLeE 13. Endowment Funds September 30, 1984

UNRESTRICTED PURPOSE—TRUE:

ANGI FORME | Soicss si cutie ends
Higbee, Harry, Memorial .........
Hedpkine bund * ss. <.cace garmiainen
Morrow, Dwight W. ............-
Mussinan, Alfred
Olmsted, Helen A: ‘a4: 286 Ga os
Poore, Lucy T. and George W.* ...
Porter, Henry Kirke, Memorial ...
Sanford, George FL* 4 i.6 bene Jos
SMiensOn. [ames * 4.) ee
Walcott, Charles D. and Mary
Vaux, Research (Designated)* ..

Subtokal ys svdac ae eee

UNRESTRICTED PURPOSE—QUASI:

Forrest; Robert: Leev...0. 5. eke en
General Endowment* ............
Goddard, Robert H. .....0+..-- 422
label Oras avec ee oe ee
Fant) Gustavus. (Ei sco oer oamree oe
Henszy, \Garoline\ \. 2:.is0.8se oheaictess a5
Henry, Joseph and Harriet A. .....
Heys; svMiaddey.G.4 3..)cuteraararsic eles ais
Hinton, Carrie Susan... ced oes +.
Lambert:ePanla'Co 22.25.54 ose
Medinus: Grace Lowes. uascetes:s
Rhees, William Jones* ...........
Safford> Glara’ Louise. ee ees ace
Smithsonian Bequest Fund*
Mapeart, Ganson) veateeiccemenar ee
Abbott, William L. (Designated) ..
Barstow, Frederic D. (Designated) .
Lindbergh Chair of Aerospace
History (Designated) ..........
Lindbergh, Charles A. (Designated)
Lyon, Marcus Ward, Jr.
(Destenated ire aj) oee ace eee
Webb, James E., Fellowship
(Designated) ve says cette atave tats «

Subtotalan: cee eee

RESTRICTED PURPOSE—TRUE:

Arthurcofames S48. otis con. eee
Baird, Spencer Fullerton .........
Barney, Alice Pike, Memorial .....
Batchelor, /emmastbemeee so. eee
Beauregard, Catherine, Memorial ..
Bergen, Charlotte, V.. 3:5): ences.
Brown, Roland Wz. = o.scceeecones
Canfield, Frederick A.
Casey, Thomas Lincoln ..........
Chamberlain, Frances Lea .......-
Cooper Fund for Paleobiology ....
Division of Mammals Curators

Fiirids ns: hie cp ies ae A
Drake, Foundation: 5... 2.i<<s02ss
Drouet, Francis and Louderback,

arold Pa hind yen eaten asc aie
Dykes, Charles, Bequest
Eickemeyer, Florence Brevoort ....
Freer, (Gnanlbsvlivat: «i. se nae eee
Grimm, {SCRE Ns os awe o's seis
Groonz, Barc Ws. os oS... sissies
Guggenheim, Daniel and Florence .
Hamilton; Janiess ti.7..c seule ome =
Henderson, Edward P.,

Meteorite PYingd ac yi ncsmetee cycle
Hewitt, Eleanor G., Repair Fund ..
Hewitt, Sarah Cooper ; 5.65.40 06.
BUUiverigWAtOihl cas uy cision ieee
Fitehoock, Albert 'S. 0. sss cue
Modeling Finia® 2 scc- ct vooriecrre
Hrdlicka, Ales and Marie ........

$ 53,266,118

$ =. 114,851
104,163
82,338
106,226
132,066
11,674
88,860
117,005
42,299
80,844
83,569

6,122
545,928

175,273
158,678
31,200
26,702,183
97,990
52,723
380,996
3,815

1,096
22,847
135,099
22,180
4,561
104,830
160,959

Principal
Book Market
value value

S 131,518 $ 170,081
38,243 49,530
226,558 243,573
228,867 304,678
72,528 89,101
2,404 3,110
512,423 677,406
846,465 1,125,065
3,784 4,644
567,676 566,646
1,322,662 1,781,055
3,953,128 5,014,889
3,414,389 3,390,484
41,529,143 44,823,288
27,020 26,850
524 523
1,706 2,008
4,225 4,955
170,033 198,214
327,238 329,912
87,159 96,510
156,692 177,060
3,238 3,283
2,263 2,539
149,209 154,099
677,280 700,361
1,434 1,878
402,179 470,057
3,368 3,929
1,563,652 1,628,013
12,628 14,278
13,541 14,007
766,069 686,728
49,312,990 52,728,976

$ 57,743,865

$ 153,962
137,626
110,330
114,125
154,177

11,394
105,813
169,631

49,429
108,331

84,367

7,282.
600,711

171,812
181,773
41,798
31,125,303
97,518
48,658
398,253
4,283

1,369
25,039
147,794
25,921
6,168
104,644
191,677

Income
Net Unexpended

income balance
$ 4,735 $ —0—-
1,205 Oe
10,860 —D-
7,A15 —-0—
2,169 0
76 —0—
17,620 —0—
27,382 —0—
160 —O0—
36,809 —0—
58,759 31,064
167,191 31,064
82,519 —0—
1,059,803 —0—
654 —0—
34 —0—
49 —0—
121 —0—
4,824 —0—
8,030 —0—
2,349 —0—
4,309 —0—
80 —0—
87 —O0—
3,754 —0—
13,501 —0—
46 —o0—
15,536 16,614
120 4,897
53,808 72,714
1,296 7,965
463 2,309
22,670 11,654
1,274,060 116,153
$1,441,251 $ 147,217
$ 5,089 $ 6,138
4,549 11,910
3,647 23,935
See 60,430
5,096 42,024
377 635
3,497 16,965
5,607 220
1,634 2,671
3,581 17,875
2,732 —0--
226 4,040
19,778 86,137
830 18,992
6,008 38,674
1,381 20,935
1,028,730 1,249,227
3,220 11,279
1,206 994
13,163 33,032
226 1,288
45 398
828 —0—
4,885 —0—
857 LEZ
204 110
6,818 33,107
6,335 6,951

EES fa nie sles Sajg 00's amines
Johnson, Seward, Trust Fund for
PII oo eke cw wold as
Kellogg, Remington, Memorial ...
CEG) es ei
ONES: he ee
2 EE i re a
Milliken, H. Oothout, Memorial ..
Mineral Endowment .............
Matchen, William A. ........606
Natural History and Conservation .
Nelson, Edward William .........
Petrocelli, Joseph, Memorial ......
MEM PSOGISOE. Lek uc oes cisnmjo cos win
ra
Rollins, Miriam and William .....
Shryock Endowment for Docents .
SS
PETER 2k nwo elena ss
Oe
Stern, Harold P., Memorial ......
Stevenson, John A., Mycological
lo»
Walcott, Charles D. and Mary
EASES ALCEN oho he aie ie c/o oialevers
Walcott Research Fund, Botanical
PC AIOHIG: 8! bk oc S's as oe
Williston, Samuel Wendell,
Diptera Research ..............
Zerbee, Frances Brinckle .........

DLE SE! Se Ee ee

RESTRICTED PURPOSE—QUASI:

Armstrong, Edwin James .........
OE
Bacon, Virginia Purdy ...........
ot ee
(CSS OST i 32 le Sa
Se
Hachenberg, George P. and
Caroline
Hanson, Martin Gustav and
a ee
Hunterdon Endowment ..........
MeSE Endowment ..............-.
ICBP—Conservation Endowment ..
Johnson, E. R. Fenimore .........
RRP DMAGEEIG - 0s ora a diecwrewe we en's
Long, Annette E. and Edith C. ....
Myer, Catherine Walden .........
WORRIES ce cece cc ceuens
Noyes, Pauline Riggs ............
Pell, Cornelia Livingston .........
Ramsey, Adm. and Mrs. Dewitt
Ee a ee, ee eee eee
Rathbun, Richard, Memorial ......
Roebling Solar Research .........
2 SS a ee
peume, Leonard P. ..........se
SEER, PREMIOTEOE, . cic ccm ec eee
Smithsonian Agency Account .....
AN ER isn wins woniein asi
Witherspoon, Thomas A., Memorial

BUSAN REE ie el 5 ohare ) wisi(e 5

a

TOTAL ENDOWMENT FUNDS ..

Principal

Book
value

54,978

11,045,313
78,269
8,898
12,248
56,335
674
305,920
41,670
75,300
66,401
21,324
71,536
345,925
667,383
=
58,999
4,415,010
51,747
461,817

16,212
429,518
163,589

8,996
2,717

48,031,154

10,125
64,026
293,747
506,092
36,534
3,972

13,933

29,993
10,019,276
582,335
130,818
25,183
295,797
1,578
68,169
3,341
30,151
25,090

965,910
35,974
80,966
98,186
26,141
2,007,564
1,032,286
33,811

435,076

16,856,074
$ 64,887,228

$118,153,346

Market
value

73,720

12,945,474
79,842
10,077
12,142
75,532

736
339,220
46,405
80,731
85,535
28,650
81,609
462,053
812,837
ee
56,727
4,860,495
68,949
512,004

18,837
511,841
214,597

9,438
3,625

55,770,264

10,962
63,799
320,211
554,225
42,266
4,507

16,847

35,038
11,513,070
596,758
131,280
25,942
347,498
2,146
79,642
4,014
30,063
29,401

1,007,242
42,127
90,574

101,098
30,474

2,189,643

1,085,132
39,586

507,935

18,901,480
$ 74,671,744

$132,415,609

“Invested all or in part in U.S. Treasury or other nonpooled investments.
**Total Return Income payout; does not include $215,411 of interest income for investment of unexpended

income balances.

TasLe 13. Endowment Funds September 30, 1984—continued

$3,894,090**

Income
Net Unexpended
income balance

2,437 20,537
427,883 108,753
2,639 8,238
333 2,849
git the 7,989
2,496 23,283
24 24
11,212 303
1,534 2,343
ALY ab Oe
2,827 6,037
947 25,070
3,067 6,513
15,27 1 82
26,614 15,885
49 —0—
1,830 1,516
159,141 42,319
2,279 27,204
16,453 46,880
623 1,430
16,727 13,440
7,093 19,401
299 1,100
120 4,530
1,839,948 2,084,904
356 Oo
2,109 —0—
10,583 33,712
18,318 3,719
L371 —0—
149 3,296
oe 1,209

1,158 S765:
380,521 131,853
18,023 nd
4,196 4,558
857 2,254
11,485 15,116
71. 290
2,632 11,546
133 2,280
994 Oe
972 1,907
33,249 6,030
1,392 18,273
2,994 4,666
3,341 13,096
1,007 19,465
72,370 263,285
25,957 —0—
1,308 642
16,788 9,195
612,891 552,177
$2,452,839 $2,637,081
$2,784,298

COOPERS & LYBRAND
CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Regents
Smithsonian Institution

We have examined the statement of financial condition of the
Smithsonian Institution as of September 30, 1984 and the related
statement of financial activity for the year then ended. Our exam-
ination was made in accordance with generally accepted auditing
standards and with generally accepted governmental auditing stan-
dards and, accordingly, included such tests of the accounting rec-
ords and such other auditing procedures as we considered necessary
in the circumstances. We previously examined and reported upon
the financial statements of the Smithsonian Institution for the
year ended September 30, 1983, totals of which are included in
the accompanying financial statements for comparative purposes
only.

In our opinion, the financial statements for the year ended
September 30, 1984, referred to above, present fairly the financial
position of the Smithsonian Institution as of September 30, 1984,
and the results of its operations and changes in its fund balances
for the year then ended, in conformity with generally accepted
accounting principles applied on a basis consistent with that of
the preceding year.

COOPERS & LYBRAND
1800 M Street, N.W.
Washington, D.C. 20036
December 14, 1984

[58]

SMITHSONIAN INSTITUTION
Statement of Financial Condition

September 30, 1984
(with comparative totals for September 30, 1983)

(thousands of dollars)

Trust Federal Totals, Totals,
funds funds all funds 1983
ASSETS:
Cash on hand and in banks (Note 3) .... $ 3,827 $ 10 $ 3,837 $ 1,971
Fund balances with U.S. Treasury (Note 4) 333 69,078 69,411 73,860
Investments (Notes 1 and 5) ............ 166,806 — 166,806 144,518
Semmes (INOtC 7)... cc cece ee 45,582 220 45,802 36,778
Advance payments (Note 8) ............ 697 13,135 13,832 13,490
Merchandise inventory (Note 1) ......... 8,902 — 8,902 8,459
Materials and supplies inventory (Note 1) 2,017 1,249 3,266 3,499
Amount to be provided for accrued annual
ST eee eens — 7,124 7,124 6,690
Prepaid and deferred expense (Note 1) ... 11,573 — 11,573 9,668
Property and equipment (Notes 1 and 9) .. 23,234 184,967 208,201 197,516
Es SP rr rn $262,971 $275,783 $538,754 $496,449
LIABILITIES:
Accounts payable and accrued expenses,
including interfund payable of $22,311
SCRE eee $ 34,889 $ 10,202 $ 45,091 $ 39,096
Deposits held in custody for other organi-
co Slee 3,042 42 3,084 2,187
Accrued annual leave (Note 1) .......... 1,335 7,124 8,459 7,839
Deferred revenue (Note 1) .............. 24,815 = 24,815 22,015
2 ee 64,081 17,368 81,449 71,137
UNDELIVERED ORDERS (iigte. 2) 040 Te 5 — 62,597 62,597 56,778
FUND BALANCES (Note 1):
Current:
Unrestricted general purpose .......... 5,086 — 5,086 5,076
eS eens 16,105 — 16,105 13,863
NER chi ni oi0 Lia iain. vulva wd onkutas 9,097 — 9,097 7,671
Endowment and similar funds (Note 6) .. 118,153 — 118,153 103,009
Dames (Note'9) ...... 0.005 5.05.6.. 50,449 — 50,449 39,242
Total trust fund balances ........... 198,890 — 198,890 168,861
Se ene see — 175 175 75
oS eee o 9,427 9,427 18,068
GS ws sn cs de sn ws ade ewes — 186,216 186,216 181,530
Total federal fund balances ......... — 195,818 195,818 199,673
Total all fund balances ............. 198,890 195,818 394,708 368,534
Total liabilities, undelivered orders
pe fund balances: J)... 305... ..4..

$262,971 $275,783

$538,754

The accompanying notes are an integral part of the financial statements.

[59]

$496,449

Bd

as | iS i]
alee
Hint
FAD A
ieee

ih be . 7 nO aoe
ME a bees . ia ri ah ino ee “I AGT: f
RS A we ete
a 8 at 1 rk ote
es) ae i oe

oo ; : ih . ‘at )
ee se on ae? ha

id ’
A
>=
7 mo ta
- 5 ; 7
- ya — > Oa im i”
3: d Fin
Ps q di 7 -
>
=e _ = ¢ ~ se A
eee i* is ts Cay
- a ; =a , + ee ") c
¥ * a | > 4.
¥ asa) ® Seale FF
a =
7 oa > ‘ a? ~~
bar! a? 2 — —_ . an
a Cy _ q i J oe a
. °) i ora a Abe tae ee
: ¥ y ; a a %
{
> 49 - ee
‘ at. , Le \
a es: ~~ mY ‘ 4 ‘
e t a rc.
© ~~. od - bad eA,
4
—_ a _s A e ia +o ly
4 -
? u ise

or , . 4 rs -" " sf 7
- 5 €

Z
the
~~
é
ioe
o
z
>
_
=
Y
_
®

as ; jee ene hee ‘ee neihs i aear; ATgG srg re ley

: ie <A = al: ee peg? bs Re

SMITHSONIAN INSTITUTION
Statement of Financial Activity

for the year ended Septembez 30, 1984

(with comparative totals for the year ended September 30, 1983)

(thousands of dollars)

TRUST FUNDS FEDERAL FUNDS
Endowment Total
Total trust Current and similar Plant | federal Operating Construction Capital Totals, Totals,
funds funds funds funds | funds funds funds funds all funds 1983
Revenue and other additions:
Appropriations, net (Note 10) $ = = § — $ — | $168,223 $163,723 $ 4,500 $ = $168,223 $195,756
Auxiliary activities revenue ... 114,852 114,852 _ = — — = _— 114,852 101,957
Federal grants and contracts ... 14,876 14,876 — a= = = = = 14,876 13,125
Investment income (net of $546,000 for
management and custodian fees) ........- 11,902 9,842 — 2,060 — — _ = 11,902 9,293
Net gain on sale of securities and real
property ....-.. cere eee eee teeters 8,505 — 8,505 — = — — = 8,505 14,451
Gifts, bequests and foundation grants ...... 15,089 8,701 247 6,141 = = = = 15,089 21,456
Additions to plant ............+-..----00e> 4,054 _— — 4,054 19,079 — — 19,079 23,133 20,757
Rentals, fees, commissions and other ....... 3,019 2,983 36 = 112 112 — = 3,131 2,386
Total revenue and other additions .....-. 172,297 151,254 8,788 12,255 187,414 163,835 4,500 19,079 359,711 379,181
Expenditures and other deductions:
Research and educational expenditures ...... 31,979 31,979 = = 105,612 105,612 = == 137,591 121,998
Administrative expenditures .......... 11,014 11,014 —_— = 12,371 12,371 —_— —_— 23,385 21,483
Facilities services expenditures ....... 1,172 1172 — — 45,650 45,650 — — 46,822 43,648
Auxiliary activities expenditures ; 93,632 93,632 = = _— — — — 93,632 85,133
Naa HSH BE [ALM osonosomaccsoooeonBons 3,797 — = 3,797 13,141 — 13,141 _ 16,938 36,962
Property use and retirements (Note 9) ...... 650 — = 650 14,393 = = 14,393 15,043 20,440
Retirement of indebtedness ........... 6 — — 6 = = = = 6 7
Interest on indebtedness 18 _— — 18 = — — = 18 17
Total expenditures and other deductions 142,268 137,797 = 4,471 191,167 163,633 13,141 14,393 333,435 329,688
Excess of revenue and other additions
over (under) expenditures and other
deductions (Note 12) ................ 30,029 13,457 8,788 7,784 (3,753) 202 (8,641) 4,686 26,276 49,493
Transfers among funds—additions (deductions) :
Mandatory principal and interest on notes . — (24) — 24 | — — _ = — ad
Nonmandatory for designated purposes, net
(INOtesS) ieeernarcinercctiinve: fs 0 ctolesersiorevevercje revs —_— (9,755) 6,356 3,399 — — = = = ee
Total transfers among funds .......... — (9,779) 6,356 3,423 = = — = = =
Net increase (decrease) for the year .... 30,029 3,678 15,144 11,207 (3,753) 202 (8,641) 4,686 26,276 49,493
Returned to U.S. Treasury ............... — — — — (102) (102) — — (102) (62)
Fund balances at beginning of year ....... 168,861 26,610 103,009 39,242 | 199,673 75 18,068 181,530 368,534 319,103
Fund balances at end of year ................ $198,890 $ 30,288 $118,153 $ 50,449 $195,818 $ 175 $ 9,427 $186,216 $394,708 $368,534

The accompanying notes are an integral part of the financial statements.

[60]

[61]

SMITHSONIAN INSTITUTION
Notes to Financial Statements

1. Summary of significant accounting policies

Basis of presentation. These financial statements do not include the accounts
of the National Gallery of Art, the John F. Kennedy Center for the Perform-
ing Arts or the Woodrow Wilson International Center for Scholars, which
were established by Congress within the Smithsonian Institution (the Insti-
tuition) but are administered under separate boards of trustees. (See Note 2.)

The accounts of the federal funds have been prepared on the obligation
basis of accounting, which basis is in accordance with accounting principles
prescribed by the Comptroller General of the United States as set forth in
the Policy and Procedures Manual for Guidance of Federal Agencies. The
obligation basis of accounting differs in some respects from generally ac-
cepted accounting principles. Under this basis of accounting, commitments
of the operating fund, such as purchase orders and contracts, are recognized
as expenditures, and the related obligations are reported on the balance
sheet even though goods and services have not been received. Such commit-
ments aggregated $33,045,000 at September 30, 1984. In addition, construction
commitments amounted to $29,552,000 at September 30, 1984.

The trust funds reflect the receipt and expenditure of funds obtained from
private sources, federal grants and contracts, investment income and certain
business activities related to the operations of the Institution. The federal
funds reflect the receipt and expenditures of funds obtained from Congres-
sional appropriations.

Fund accounting. To ensure observance of limitations and restrictions placed
on the use of resources available to the Institution, the accounts of the
Institution are maintained in accordance with the principles of fund account-
ing. This is the procedure by which resources for various purposes are
classified for funds control, accounting and reporting purposes into funds
established according to their appropriation, nature, and purposes. Separate
accounts are maintained for each fund; however, in the accompanying finan-
cial statements, funds that have similar characteristics have been combined
into fund groups. Accordingly, all financial transactions have been recorded
and reported by fund group.

The assets, liabilities, and fund balances of the Institution are reported in
self-balancing fund groups as follows:

Trust current funds, which include unrestricted and restricted resources,
represent the portion of expendable funds that is available for support of
Institution operations. Amounts restricted by the donor for specific pur-
poses are segregated from other current funds.

Trust endowment and similar funds include funds that are subject to
restrictions of gift instruments requiring in perpetuity that the principal
be invested and the income only be used. Also classified as endowment
and similar funds are gifts which allow the expenditure of principal but
only under certain specified conditions and quasi-endowment funds.

[62]

_ —_—S

Quasi-endowment funds are funds established by the governing board
for the same purposes as endowment funds; however, any portion of
such funds may be expended. Restricted quasi-endowment funds repre-
sent gifts for restricted purposes where there is no stipulation that the
principal be maintained in perpetuity or for a period of time, but the
governing board has elected to invest the principal and expend only the
income for the purpose stipulated by the donor.

Trust plant funds represent resources restricted for future plant acquisi-
tions and funds expended for plant. Pledges for the construction of the
Center for African, Near Eastern, and Asian Cultures are recorded as
gifts in the plant fund in the period the pledge document is received.

Federal operating funds consist of separate subfund groups maintained
for each appropriation—Salaries and Expenses appropriations, which are
available for obligation in the current year only. Special Foreign Currency
appropriations and Barro Colorado Island Trust Fund, for which unex-
pended funds from the current year can be carried forward and obligated
in subsequent years.

Federal construction funds represent the portion of expendable funds that
is available for building and facility construction, restoration, renovation,
and repair. Separate subfund groups are maintained for each appropria-
tion—Construction and Improvements, National Zoological Park, Restora-
tion and Renovation of Buildings, Museum Support Center and the Center
for African, Near Eastern, and Asian Cultures (Quadrangle).

Federal capital funds represent the amount of the investment of the
United States Government in the net assets of the Institution acquired
with federal funds and nonexpendable property transfers from Govern-
ment agencies.

Investments. All gains and losses arising from the sale, collection or other
disposition of investments and property are accounted for in the fund in
which the related assets are recorded. Income from investments is accounted
for in a similar manner, except for income derived from investments of en-
dowment and similar funds, which is accounted for in the fund to which it is
restricted or, if unrestricted, as revenue in unrestricted current funds. Gains
and losses on the sale of investments are recognized using the specific identi-
fication method, whereby the cost of the specific security adjusted by any
related discount or premium amortization is the basis for recognition of the
gain or loss.

Inventory. Inventories are carried at the lower of cost or market. Cost is
determined using the first-in, first-out (FIFO) method, retail cost method (for
those inventories held for resale) or net realizable value.

Deferred revenue and expense. Revenue from subscriptions to Smitfisonian
Magazine is recorded as income over the period of the related subscription,
which is one year. Costs related to obtaining subscriptions to Smithsonian
Magazine are charged against income over the period of the subscription.

The Institution recognizes revenue and charges expenses of other auxiliary
activities during the period in which the activity is conducted.

Works of art, living or other specimens. The Institution acquires its collec-
tions, which include works of art, library books, photographic archives,

[63]

objects and specimens, through purchase or by donation. In accordance with
policies generally followed by museums, no value is assigned to the collec-
tions on the statement of financial condition. Purchases for the collections
are expensed currently.

Property and equipment. Capital improvements and equipment purchased
with trust funds and utilized in income-producing activities are capitalized
at cost and are depreciated on a straight-line basis over their estimated useful
lives of 3 to 10 years. Equipment purchased with trust funds for use by
non-income-producing activities is treated as a deduction of the current fund
and a capitalized cost of the plant fund. Depreciation on equipment capital-
ized in the plant fund is recorded on a straight-line basis over the estimated
useful life of 3 to 10 years (see Note 9). Equipment purchased with federal
funds is recorded at cost and depreciated on a straight-line basis over a
period of 10 years.

Real estate (land and buildings) purchased with trust funds is recorded
at cost, to the extent that restricted or unrestricted funds were expended
therefor, or appraised value at date of gift, except for gifts of certain islands
in the Chesapeake Bay and the Carnegie Mansion, which have been recorded
at nominal values. Costs of original building structures and major additions
are depreciated over their estimated useful lives of 30 years. Costs of reno-
vating, restoring and improving structures are depreciated over their esti-
mated useful lives of 15 years (see Note 9).

Buildings and other structures, additions to buildings and fixed equipment
purchased with federal funds are recorded at cost and depreciated on a
straight-line basis over a period of 30 years. Costs of renovating, restoring
and improving structures are depreciated over their useful lives of 15 years.

Certain lands occupied by the Institution’s buildings were appropriated
and reserved by Congress for that purpose and are not reflected in the
accompanying financial statements. Property and nonexpendable equipment
acquired through transfer from Government agencies are capitalized at the
transfer price or at estimated amounts, taking into consideration their use-
fulness, condition, and market value.

Government grants and contracts. The Institution has a number of grants
and contracts with the U.S. Government, which primarily provide for cost
reimbursement to the Institution. Grant and contract revenue is recognized
when billable or received in the trust funds.

Contributed services. A substantial number of unpaid volunteers have made
significant contributions of their time in the furtherance of the Institution’s
programs. The value of this contributed time is not reflected in these state-
ments since it is not susceptible to objective measurement or valuation.
Annual leave unfunded. The Institution’s civil service employees earn annual
leave in accordance with federal law and regulations. However, only the cost
of leave taken as salaries is funded and recorded as an expense. The cost
of unused annual leave at year-end is reflected in the accompanying financial
statements as an asset and accrued liability in the federal funds.

2. Related activities

The Institution provides fiscal and administrative services to several separately
incorporated organizations in which certain officials of the Institution serve

[64]

ke

LET FP

Pe TS ees Se

on the governing boards. The amounts paid to the Institution by these orga-
nizations for the aforementioned services, together with rent for Institution
facilities occupied, etc. totaled approximately $355,000 for the year ended
September 30, 1984. Deposits held in custody for these organizations are
$3,029,000 as of September 30, 1984.

The following summarizes the approximate expenditures of these orga-
nizations for the fiscal year ended September 30, 1984 as reflected in their
individual financial statements and which are not included in the accompany-
ing financial statements of the Institution:

($000s)

EE MTEE, ORT cy ols cae vce en cuuwecs mas ecpuscers $ 128

Rem EMIT ICAL, ITI. oe ech ccc cn ep cess meccscren $6,400
Woodrow Wilson International Center for Scholars:

OT ete eee ee eae fatty pak stp AL aes aS eee © $4,100

nn TE OMSERAINOYY SS eat pcr gcc sc ncn camnoss 6 ur ae nie 0 $2,568

3. Cash on hand

Cash on hand—federal funds represents the amount of imprest fund cash
advanced by the U.S. Treasury to imprest fund cashiers for small purchasing
purposes.

4. Fund balances with U.S. Treasury

The account represents fund balances on the books of the U.S. Treasury
available for disbursement.

5. Investments

Investments are recorded at cost, if purchased, or estimated fair market value
at date of acquisition, if acquired by gift. At September 30, 1984, investments
were composed of the following:

Carrying Market

value value
($000s) ($000s)
Current funds:
0 A gt $ 12,252 $ 12,254
MI ANNE se ust ies qi aimee BEI wy Sat ke 3,949 3,940
U.S. Government and quasi-Government obligations 33,701 33,084
ENN 8a sor aty a's co Wand Pk iaia ws WA A poke 28 9
MMMM Sg 0 2215549 deo 2 cio isl Add line a elas 30 57
49,960 49,344
Endowment and similar funds:
DS | 12,367 12,367
Sees Nt U5. Treasury ..-........00sececcess 1,000 1,000
U.S. Government and quasi-Government obligations 10,028 10,063
a eA os as Socials a vim wen cea 5,377 5,786
“asain eh 84,927 99,479
MCE ee tees acon eke eans« 3,015 2,282
116,714 130,977

[65]

Plant funds:

U.S. Government and quasi-Government obligations 32 29
Common, stock ..5 ities «vn ae te sinded. 100 a
132 29

$166,806 $180,350

Since October 1, 1982, the deposit with the U.S. Treasury has been in-
vested in U.S. Government securities at a variable yield based on market
interest rates.

Substantially all the investments of the endowment and similar funds are
pooled on a market value basis (consolidated fund) with each individual fund
subscribing to or disposing of units on the basis of the value per unit at
market value at the beginning of the month within which the transaction
takes place. Of the total units, each having a market value of $203.92, 293,996
units were owned by endowment and 348,976 units were owned by quasi-
endowment at September 30, 1984.

The following tabulation summarizes changes in relationships between
cost and market values of the pooled investments:

($000s) Market
Net value
Market Cost change per unit
ERGIBE WEAR cio 5 cites acu $131,113 $116,860 $ 14,253 $203.92
Beginning of year ...... $130,684 $101,672 29,012 210.27
Increase (decrease) in unrealized net
pain forthe sear | 245, ily ee te ee ar (14,759) oo
Realized net gain
fantthe years ...co 8. 28 et NS RE 8,505 —
Total realized and
unrealized net

pain (loss) tor the wear scp. dace Son re ee $ (6,254) $ (6.35)

6. Endowment and similar funds

Endowment and similar funds at September 30, 1984 are summarized as
follows:

($000s)
Endowment funds, income available for:

Restricted purposes 2 22: .osissai na ds oon geen - eee $ 48,031
Unrestricted. purposes. jis) 24.0. oen'-44 aun dee eee 3,953
51,984

Quasi-endowment funds, principal and income available for:
Restricted Burpuses: <.. 55 c2ua sana vn wwoees sane 16,856
Uneest®itied purposes oo... ein cacen as cudus one cena eee 49,313
66,169
Total endowment and similar funds ................. $118,153

[66]

The Institution utilizes the “total return” approach to investment manage-
ment of endowment funds and quasi-endowment funds. Under this approach,
the total investment return is considered to include realized and unrealized
gains and losses in addition to interest and dividends. An amount equal
to the difference between interest and dividends earned during the year and
the amount computed under the total return formula is transferred to or
from the current funds.

In applying this approach, it is the Institution’s policy to provide, as being
available for current expenditures, an amount taking into consideration such
factors as, but not limited to: (1) 442% of the five-year average of the market
value of each fund (adjusted for gifts and transfers during this period), (2)
current dividends and interest yield, (3) support needs for bureaus and scien-
tists, and (4) inflationary factors as measured by the Consumer Price Index;
however, where the market value of the assets of any endowment fund is
less than 110°/o of the historic dollar value (value of gifts at date of dona-
tion), the amount provided is limited to only interest and dividends received.
The total return factor for 1984 was $6.74 per unit to the Restricted and
Designated Purpose Endowment Funds and $5.00 per unit to the Unrestricted
General Purpose Endowment Funds; new units were purchased for the Unre-
stricted Endowment Funds with the $1.74, the difference in the total return
factor. The total return applied for 1984 was $2,594,000 to the Restricted
and Designated Purpose Endowment Funds and $1,226,000 to the Unrestricted
General Purpose Endowment Funds.

7. Receivables
Receivables at September 30, 1984 included the following:

($000s)
Trust funds
Accounts receivable, auxiliary activities; net of allowance for
arises OF SSIS OOO . 9... cw ce ees ens a ec ac ee $ 9,136
Interfund receivables due from current funds:
Pseeitienieane similar fands .....-..-.20.ceecccncesvace 1,156
Relish aa A A ED ke ea 21,155
Peeeet atl dividends receivable <2. .i)s2. .sedide cece caeeewes 2,036
Unbilled costs and fees from grants and contracts ............ 942
IE es Dt IN ee a ci maa Sle du miata @ wil-nim ack a eykiim 11,102
ds uwian sae tetdsacs cis Jas Jere. 55
45,582
Federal funds
EES EE EOE re kn ct Sa vn sak naemeetesecsss 220
OES ES ES a ae, eee eo oe ear $45,802

8. Advance payments

Advance payments represent advances made to Government agencies, educa-
tional institutions, firms and individuals for services to be rendered or
property or materials to be furnished.

[67]

As of September 30, 1984, the Institution had advances outstanding to the
U.S. Government of approximately $10,807,000, principally for construction
services to be received in the future. The Institution at that date also had
advances outstanding to educational institutions amounting to approximately
$1,420,000, principally under the Special Foreign Currency Program.

9. Property and equipment

At September 30, 1984, property and equipment which have been capitalized
(see Note 1) are comprised of the following:

($000s) ($000s)
Trust
Current funds
Capital tmprovements: <.... .0' ssw aie den oinintecs 6 rasa ae ha ie ee
ECREREREUIRE aoa fie aha: oes bia aims we tea lee Getic alee 3,892
LEASEROML. 1FAOTOVERIOTES ae sina, din casa ao eee aed 235
Less accumulated depreciation and amortization (3,832)
4,747
Endowment and similar funds
ET RAEN ees ARO pment iNET ANAC 6s pore 239
Plant funds
Land and herkes oe e ee 21,984
ESTEIPIIGNNE eS oye c's ani ota to aii aahe ee ee ee 2,389
Less accumulated depreciation ,« ~)</xiej.<0-sen = +e (6,125)
18,248
Total: tasict funds. 22: neue eee $ 23,234
Federal
Capital funds
PROC es: ot des ed el ged sedate eee 263,226
Ese Ss Ses Ce sera e faa eee 24,758
Less accumulated depreciation ................. (103,017)
Fotal, federal finds... .4..1ue6 terete eae 184,967

Tete. all. fGes sf bs 6 ea ee ees eee $208,201

Depreciation and amortization expense for 1984 for trust funds’ income-
producing assets amounted to approximately $957,000, which is included in
auxiliary activities expenditures in the current funds. Depreciation of trust
funds’ nonincome-producing equipment and buildings for 1984 amounted to
approximately $650,000.

Depreciation expense reflected in expenditures of the federal capital funds
for 1984 was $11,437,000.

The balance of the plant fund at September 30, 1984 included $32,201,000
of unexpended plant funds.

[68]

10. Appropriations

For the year ended September 30, 1984, the Institution was awarded
$12,500,000 for various construction projects. Funds appropriated in the
prior year for Quadrangle construction were reduced in fiscal year 1984 by
$8,000,000.

11. Pension plan

The Institution has separate retirement plans for trust and federal employees.
Under the trust fund’s plan, both the Institution and employees contribute
stipulated percentages of salary which are used to purchase individual an-
nuities, the rights to which are immediately vested with the employees. The
cost of the plan for the year ended September 30, 1984, was $3,195,000. It is
the policy of the Institution to fund plan costs accrued currently. There are
no unfunded prior service costs under the plan.

The federal employees of the Institution are covered by the Civil Service
Retirement Program. Under this program, the Institution withholds from the
gross pay of each federal employee and remits to the Civil Service Retirement
and Disability Fund (the Fund) the amounts specified by such program. The
Institution contributes 7% of basic annual salary to the Fund. The cost of
the plan for the year ended September 30, 1984, was approximately $5,900,000.

12. Excess expenditures and other deductions

The net excess of expenditures and other deductions over revenue and other
additions disclosed for federal construction funds in the Statement of the
Activity for the year ended September 30, 1984 arose because certain appro-
priations, having been recorded as revenue and other additions in prior years
and carried forward as fund balance, were expended during the year. Addi-
tionally, funds appropriated in the prior year were reduced in fiscal year 1984
(see Note 10).

13. Nonmandatory transfers for designated purposes

The following transfers among trust funds were made for the year ended
September 30, 1984 in thousands of dollars:

Current funds Endow-
ment and
Unre- similar Plant

stricted Restricted funds funds

Portion of investment yield

appropriated (Note 6) ........ $(1,466) $(1,353) $2,819 $ —
Siete ACQUISITIONS .......-...-5- (3,400) — — 3,400

Income added to endowment
OE Per rer re ee — (190) 190 =e
Appropriated as quasi-endowment (3,313) (33) 3,347 (1)
MERE Saou e se as Le $(8,179) $(1,576) $6,356 $3,399

[69]

14. Income taxes

The Institution is exempt from income taxation under the provisions of
Section 501(c)(3) of the Internal Revenue Code. Organizations described in
that section are taxable only on their unrelated business income, which was
immaterial for the Institution for 1984.

It is the opinion of the Institution that it is also exempt from taxation as an
instrumentality of the United States as defined in Section 501(c)(1) of the
Code. Organizations described in that section are exempt from all income
taxation. The Institution has not as yet formally sought such dual status.

[70]

aT
ts = ae. UF!
ey) Ll eat