University of Virginia Library

FINANCE COMMITTEE

Mr. Gay, Chairman, reported that the Finance Committee had met on the previous night to
discuss the custodial agreements which the University had entered into in 1947 with the Peoples
National Bank of Charlottesville. Under the first of these agreements, known as the Endowment Funds
Custodial Agreement, the Peoples Bank serves as custodian of all mortgages held in the Consolidated
Endowment Fund. The Finance Committee feels that the Bank has not been handling these securities as
stipulated in the agreement. The Committee requested Mr. Gay to meet with Mr. Walsh, Trust Officer
of the Bank, to discuss this agreement. Mr. Walsh was most receptive to the suggestions of the Finance
Committee and stated that the Bank was desirous of complying fully with the agreement.

Mr. Gay then presented the Bursar's Custodial Agreement with the Peoples National Bank of
Charlottesville, which had been approved on June 13, 1947. Under this agreement the Bank maintains
custody of the securities in the current funds of the Bursar, paying to him quarterly the income
received. The Finance Committee feels, as does the Bursar, that the cost to the University of this
agreement does not justify the benefits. The Finance Committee recommends that the agreement be
terminated and that these securities be kept in a safe deposit box of the bank in the custody of the
Bursar. The recommendation met with the approval of the Board.

Mr. Gay stated that the Finance Committee wished instructions from the Board regarding
the investment of endowment funds in mortgages on homes of faculty members. The Finance Committee
recommends that the State regulations for banks, i.e., a maximum of sixty per cent of total cost, be
followed. After considerable discussion the Finance Committee was directed to follow standard investment
practices in making these loans, as the funds were a part of the Consolidated Endowment
Fund and should be invested with great care.