University of Virginia Library

XLIV. Finances

In July, 1865, John R. Woods, a member of the Board
of Visitors, submitted a report to that body, in which it
was stated that the University could only avoid ruinous
embarrassment by the financial assistance of its alumni,
the restoration of its annuity to its original proportions,
and the adoption of inflexible rules of retrenchment and
economy. Just a few weeks previous to this, the Faculty
had estimated the income for the next session, 1865–
66, at $22,000, provided that two hundred students at
least should matriculate and the State should appropriate
as formerly the sum of fifteen thousand dollars.
There was, at this time, a debt of $36,000, the interest
charge on which annually amounted to $2,166. One of
the recommendations which the Faculty now made in
order to reduce the cost of maintenance to the lowest
point, was that all horses should be dispensed with on the
grounds; and another was that but one man should be employed
in addition to the janitor. The proctor even was
to be dropped, and also the superintendent of buildings.
The duties of these officers were to fall on the backs of
the chairman and his colleagues. The income was to be
swelled by imposing a new library fee, and by increasing
the rents of the hotels and the dormitories.

It was anticipated that, by this curtailment of expenses
and augmentation of charges, the sum of $5,760 could
be saved if one hundred students should enter, and the
sum of $10,976, should double that number matriculate.
At this time, certain houses within the precincts were
occupied by the families of Captain Zimmer, Captain Colston,

Mrs. McCoy, Mrs. Matthew F. Maury, Mrs.
Charles Maury, Colonel J. L. Maury, and John Randolph
Tucker. All of these were permitted to remain.
They were paying from eight to twelve dollars a month,
an amount, which, small as it was, was considered to be of
importance at that hour of extreme impoverishment.

The notes endorsed by the professors,—which had
been negotiated to acquire a fund for repairs at the beginning
of the session of 1865–66,—were paid just as
soon as they matured. The money needed for this
liquidation had been received in the form of matriculation
fees and dormitory and house rents. The current
expenses of the first session, exclusive of the salaries,
were met by the current income for that session; and at
its end, a small surplus was even left in the treasury, a
condition announced by the Board of Visitors to be the
result of the skilful manner in which the chairman, Professor
Maupin, had discharged the duties of the proctorship.
The State had resumed the payment of the annuity,
but, in 1867, a part of this sum was expended in
the defrayment of interest on the University's indebtedness.
In June, 1867, it was expected that the income
for the session to follow would rise to $36,597; and
that the expenses would fall but little below $33,931.

The Faculty, in 1869, appointed a committee of its
own members to draft a petition to the General Assembly
in support of the University's claim to the large appropriation
of lands made to the State by Congress for
the encouragement of agricultural education; and they
also counseled the Board of Visitors to send in a second
appeal. At this moment, the financial condition of the
institution was not satisfactory. The interest accruing
on its debts,—this indebtedness amounting to $38,000,—
swallowed up so large a share of its revenues that the

Board and Faculty alike were constrained to acknowledge
that, without the aid of money falling in from the
Miller fund, many of the most important ends for which
the University had been established would have failed.
Its credit too was liable to be suspended at once, if the
course of political events in the State should take a turn
adverse to the domination of the Conservative Party.

The Faculty were now of the opinion that no expenditure
should be authorized for any object whatever unless
the means to cover it were already in the proctor's hands.
It was under the influence of these financial straits that a
committee of that body submitted a report to the Visitors,
which pointed out what, in their judgment, was the
most useful way of employing the Miller Fund; namely,
(1) to improve the facilities for instruction in the new
professorships of applied chemistry and applied mathematics;
(2) to assist needy and deserving students; and
(3) to provide salaries for the incumbents of the chairs
of applied science. We have already seen that the trustees
of the Miller fund declined to assent fully to this
disposition of the income that fell annually into their
possession; but they did afford substantial assistance in
such directions as they considered in harmony with the
ends which Mr. Miller had had in view. Thus, during
the session of 1869–70, they appropriated, in part payment
of the salary of the professor of applied chemistry,
$1,000; of the salary of the professor of applied
mathematics, $300; for the support of a scholarship,
$500; and for the defrayment of interest on certain University
bonds, $2,400,—a total sum of four thousand,
two hundred dollars. The income from the Miller fund
at this time amounted to nine thousand dollars.

Again in January, 1870, the Faculty discussed at
length the question of the best means to be employed by

the University to obtain the Congressional grant for the
support of agriculture. An influential committee,—Venable,
Peters, Mallet, and Southall,—was named to draft
a report on this subject; this report when completed
was first sent to the Board of Visitors; and afterwards
through them, was delivered to the General Assembly.
So onerous was the task of managing the financial affairs
of the institution at this time,—a task which fell in reality
on the proctor alone,—that it was finally decided to
relieve him of the serious burden of police duty. In
June, 1870, the floating debt of the University amounted
to $12,323. The bonded indebtedness now consisted of
the following specific obligations to various creditors: to
the Virginia Military Institute, $20,000[45] ; the estate of
General Philip St. George Cocke, $5,000; George W.
Spooner, $2,600; estate of Lewis M. Coleman, $2,500;
estate of Mrs. Martha Randolph, $8,500,—a total sum
of thirty-eight thousand, six hundred dollars. In June,
1871, an addition of $10,000 was made to this indebtedness
for the purchase of Carr's Hill, and $5,000 for the
increase of the water supply. The improvements to the
property on Carr's Hill imposed a further charge of $1500,
while the erection of Professor Mallet's residence
also required an outlay of $9,200.

An act of Assembly passed in March, 1871, authorized
the University to float bonds, not to exceed $30,000, for
use in paying off its current debts, amounting to $18,163,
and certain long standing obligations soon to mature.
The entire indebtedness of the institution at this time was
$82,915. The policy of the Board of Visitors was to
provide for its gradual liquidation. The strictest economical

methods newly enforced, together with the limitation
of each professor's salary to $3,000, encouraged
the proctor to think that, by 1880, he would be in a position
to take up the new issue of eight per cent. bonds
amounting to thirty thousand dollars. For the fiscal
year ending June i, 1871, the University's income from
all sources,—including an appropriation by the Miller
trustees of $8,800,—was $48,427. The expenses for
this session did not exceed thirty-eight thousand dollars.

Barely twelve months elapsed before the Faculty were
compelled to acknowledge, in their annual report, that
the University was again dragging its financial anchors.
Their first suggestion for its rescue was that the fees of
all the schools, with the exception of law, should be augmented
to the extent of five dollars; and that every hotel-keeper,
instead of depositing in the treasury a flat sum
of $400.00, should pay seven dollars and a half for each
student boarding under his roof. Their second suggestion
was that there should be specific curtailments in numerous
sources of heavy expense. By this time, the pecuniary
benefit which the University had expected to
realize under the will of Thomas Johnson, of Augusta
county, had been proved delusive.

The financial status of the institution in June, 1872,
was as follows: matured bonds of the Randolph estate,
$3,500; debt to the Coleman estate, $1,000; to the Cocke
estate, $25,000[46] ; to Charles S. Venable, $1,250; bonds
negotiated for the purchase of Carr's Hill, $2,000; bonds
of the agricultural department payable in 1888, and bearing
eight per cent. interest, $28,000; mortgage bonds,
$26,850,—a total of $87,600. The following appropriations

for the session of 1872–73 indicate the extent to
which the Miller fund contributed annually to the support
of the department of agriculture and its associate
schools: the experimental farm, $1,000; the salary of
the professor of agriculture, $2,000; scholarship, $1,000;
the salary of the professor of agricultural chemistry,
$500.00; salary of the professor of applied mathematics,
the like amount.

Again, in 1874, the Board of Visitors concluded that
it would be an advantage to the University to refund its
outstanding indebtedness; but it was not until January,
1875, that they assembled in Richmond to draft a bill,
with this end in view, to be submitted to the General Assembly.
Their object was to obtain the authority of that
body to negotiate a loan of $95,000, to be secured by a
mortgage on all the real estate belonging to the University.
A statement accompanying this bill demonstrates
that the indebtedness of the institution at this time
amounted to as large a figure as $93,400. It was only
by adopting the strictest methods of economy in all expenditures;
by cutting down the appropriations for repairs
below the point of safety; and by reducing and
equalizing the emoluments of the professors to a degree
that might have caused the most distinguished to leave,
that the Board was able to pay the current charges, to take
up the debt as it matured, and to defray the interest accruing
from time to time. "With the cheerful cooperation
of the Faculty," they declared, "we have arrested
the accumulation of further obligations, and, but for the
panic of 1873, would have been able to lay aside a sinking
fund. But the present necessities of the University
would not allow this." The General Assembly passed the
bill, which seems to have been a measure of practical wisdom,
as there were several urgent reasons for refunding

the debt: (1) owing to the excessive interest charges,
the buildings were left in a state of disrepair; and (2)
there was not surplus enough to erect a new system of
drainage, or to make additions to the collections of the
library, or to the apparatus of the scientific school.

In 1875–6, the General Assembly appropriated for the
benefit of the University the sum of $30,000, on condition
that it would impose no tuition fee in the case of the
matriculate from Virginia, provided that he was at least
eighteen years of age. This was to apply only to the
schools of the academic department. This annuity was
to be used as far as necessary in paying the bills for repairs,
and the interest upon the obligations of the institution;
and should any surplus remain, it was to be credited
to a sinking fund. At this time, June (1876), there
was a bonded debt of $86,000, and a floating one of
$10,253.09.

The sum of $9,255.35 had recently been locked up by
the failure of the Charlottesville National Bank; and it
was not expected that more than one half of this amount
would be recovered when the affairs of that bankrupt concern
should be finally liquidated. The interest charges
to be annually met out of the resources of the University
now amounted to $7,500. The income derived by it at
this time from its miscellaneous bonds was $3,000, and
the annual sum received from the Miller Fund was $4,500.
The trustees of this fund were instrumental, in
1877, in assisting the Board to negotiate a loan for the
completion of the Brooks Museum. A committee of
the Visitors had recommended that the personal property
of the institution should be mortgaged for that purpose.
The Miller trustees consented to accept these secured
notes, for which they were to settle by means of a sale of
certain Richmond city bonds held by the Miller estate.

The University was not required to pay interest on the
mortgage bonds, as the School of Agriculture was obtaining
an equivalent from the use of the museum without
charge. These bonds were to be redeemed by the
accumulation of the interest of Central Railway debentures
held by the Miller Fund.

The financial condition of the University at the end of
the fiscal year in June, 1878, was as follows: from the
State it derived an annuity of $30,000, while from the
fees of the dispensary it obtained, on the average, each
year, $1,200; from matriculation fees, about $17,270;
from interest on the newly received Corcoran fund, $3,000;
from the annual appropriation by the Miller trustees,
$3,975, and from rents, $15,320. Its current expenses,
independently of the salaries, had amounted to
$29,365; the salaries themselves, to $51,000. There
remained a surplus only in consequence of a balance
brought over from the preceding year.

In July, 1879, the Board of Visitors pronounced the
financial condition of the University to be more satisfactory
than it had been at any time during a long period.
The entire indebtedness of the institution, with the exception
of three thousand dollars, was now funded in bonds
payable at the end of thirty years. The General Assembly,
during its ensuing term (1879–80), omitted to make
the usual appropriation, and the proctor, in consequence,
was compelled to borrow the sum of $30,000 with which
to pay the different salaries; but this cloud had passed by
the end of the next fiscal year (June, 1881), for, in their
report to the Legislature for 1880–1881, the Visitors
went so far as to say that the condition of the finances
at that time was full of encouragement, and that, by
the exercise of economy, there was even ground for hoping
that the debt of the University would be liquidated

within a measurable time. Definite steps were now taken
that apparently gave substance to this expectation,—the
proctor was able to cancel the following obligations: the
Randolph bonds, $7,500; the Cocke, $25,000; the
Spooner, $2,600; the Coleman, $2,500; the Venable, $1,250;
the lien on the Carr's Hill property, amounting to
$10,000; certain first mortgage bonds, amounting to $30,000;
and certain second mortgage bonds, amounting to
thirty thousand dollars also.

The income of the institution for the fiscal year ending
June, 1884, was estimated at $75,477.35. This sum did
not take in the interest accruing from the bonds which had
recently been contributed for the support of the new observatory,
nor the annual appropriation by the Miller
trustees, nor the infirmary fees. The total was $93,307.
Expenditures for the same period aggregated $93,699.
The total debt had at one time amounted to $87,000, but,
by means of the sinking fund, it had been reduced to $74,500;
subsequently, it had been forced back to $89,500,
and was now grouped under three different heads, all of
which were secured by the University's debentures: (1)
bonds for $74,500, payable in 1876, and carrying six per
cent. interest; (2) bonds for $5,000, payable in 1883,
and also carrying six per cent. interest; and (3) bonds
held by the Miller trustees amounting to ten thousand
dollars.

At the end of the session of 1883–84, there was a deficit
of fifty-five hundred dollars. Hitherto, the receipts
and expenses of the institution had, as a rule, balanced
from year to year, but causes now arose which increased
the outlay disproportionately to the income, among which
may be mentioned the addition of new schools, the election
of new professors, the enlargement of the bills for repairs
to the buildings, improvements in the system of

drainage, and an expansion in the volume of the water
supply.

The Faculty urged the Visitors to persuade the General
Assembly to take over the existing debt, as it would relieve
the institution of an interest charge that amounted
annually to $8,500. Unless, they said, a more liberal income
could be placed at the disposal of the University, its
efficiency, and with that efficiency, its reputation, must
decline. Some impression must have been made on the
Legislature by the Board's consequent petition, for the
annual appropriation was increased to $40,000,—of
which sum, $4,500, was to be expended in necessary repairs
to the buildings. The condition attached to the
appropriation was that all Virginian students sixteen
years of age and upward, instead of eighteen years and
upward, were, as formerly, to be admitted to the academic
schools without any charge for tuition, but subject
as before, to a preliminary examination.

It was estimated that the receipts of the session of
1884–85 would rise to $93,307 and the expenses to $94699.
The volume of the salaries had, by this time,
swelled to $59,000. The interest on the bonded debt of
$79,500 was $6,260. A large addition to the resources
of the University was made, in 1886, by the will of Mr.
Austin, who bequeathed it the sum of $435,000. The
income of the institution in 1887 was substantially as follows:
annuity, $40,000; matriculation fees, $6,000; infirmary
fees, $2,100; tuition fees, $17,000; rents, $5,128;
contingent fees, $110.00; interest from endowment
bonds, $6,156; from observatory bonds, $4,780; from
the Miller Fund, $6,000, and from other sources, $1,900,
—a total of $89,174.

During the session of 1887–88, the annuity from the
State was cut down to $35,000, in consequence of the

large surplus which was supposed to have been shown at
the end of the previous fiscal year; but this was found
to be delusive, as that fiscal year had been arbitrarily
made to terminate in May. On June 30, the former end
of the year, it was discovered that no surplus really existed.
In 1891–92, the General Assembly, under the influence
of the protest submitted by the University authorities,
restored the annuity to the original amount. In
the meanwhile, a large bequest had been received from
the Fayerweather estate; but as there was a controversy
over the meaning of the will, the University consented to
a compromise, by which the sum to be paid to the Board
of Visitors was fixed at one hundred thousand dollars.
The bonded indebtedness of the institution now consisted
of $40,000, payable in 1905, and carrying eight per cent.
interest; $28,000, payable in the same year, and carrying
six per cent. interest; and $1,500 payable in 1907, and
carrying eight per cent. interest. The interest charge
amounted to six thousand dollars. The indebtedness to
the Miller estate still remained unpaid. The invested
funds, which included two gifts, aggregating $100,000,
from Mr. Corcoran, and gifts for the endowment of the
Observatory, amounting to $75,000,—of which W. H.
Vanderbilt had presented $25,000,—had now risen to
a total of $277,600

For the last fiscal year of the Seventh Period, 1865—
95, the receipts were approximately $126,140.41, and the
disbursements $125,254.46.[47]