University of Virginia Library

FINANCE COMMITTEE

Messrs. Wilkerson and Gunn, Vice Presidents of the State Planter's Bank, appeared before
the Board and presented the annual report of the Consolidated Endowment Funds for the period January
25, 1951 through January 25, 1952. A copy of this report is filed with the minutes.

Mr. Gunn highlighted the report by pointing out that the earnings on the fund had declined
from 4.77% in 1950 to 4.61% in 1951. This decline is due largely to elimination of year-end dividends
by various companies in which the funds are invested. At the end of the year the market value
of securities held in the fund was $765,000 greater than book value.

The distribution of the investments has changed as follows: in 1948 27% were common stocks;
the year ending January 25, 1952, 41% were in common stocks. In preferred stocks the change represents
a decrease from 1948 to this year of 6%, from 21% to 15%. In the same period, the holding of bonds
has decreased from 50% to 44%.

Mr. Wilkerson stated that there had been a general shift in money rates in the United States.
Prime money now earns 3% as compared with 2-1/2% prior to the Federal Reserve Board discontinuing its
support of government bonds. The result is that you get 3-1/4 to 3.4% on AAA industrial bonds. In
the adjustment, preferred stocks have dropped to bring their yield in line with other securities.

Mr. Wilkerson stated that he believed business was in a packing down period. He thought
that with high taxes and increasing competition, profits would be squeezed, hence, the bank is looking
for low cost producers in which to invest funds. For the present, it is recommended that investments
be made in corporate bonds and preferreds with some additions to common stocks in which we already
have an interest.

On behalf of the Board, The Rector thanked Mr. Gunn and Mr. Wilkerson and stated that he
thought the Consolidated Endowment Fund was being excellently handled.