Page 6 --Thursday, September 10, 1981-The Michigan Daily MORE DEFENSE INDUSTRIES ADDED Investments bolster'U'inco By MARK GINDIN Much like a Wall Street brokerage house, the University invests in just about anything that will generate money, in an effort to help ease tuition hikes and program cuts. During the 1979-80 school year, investment income totaled more than $18.7 million. Student fees for the same period totalled $83.8 million. Had the investments not been there, a significant increase in student fees would have resulted, ac- cording to an investment official. The University uses two funds to finance the investments, according to Vice-president and Chief Financial Officer James Brinkerhoff. While revenue from the endowment fund must be used for designated purposes, the investment pool has relatively few restrictions. ENDOWMENT FUNDS are given to the University for specific purposes, Brinkerhoff said. The University invests this money in stocks, bonds, and mortgages. The proceeds are used for the purposes designated by the donor, such as student aid, research, or instruction, he said. The other source of money for investments comes from the University's investment pool. Consisting largely of student fees -not used to cover immediate expenses. Residence Hall fees and tuition are not needed in their entirety immediately, so while waiting to be spent, they are invested, Brinkerhoff said. Investment funds also come from the state. "About one- twelfth of the state appropriation become invested the day we get it," said Brinkerhoff. When a donation earmarked for investment comes into the University, it is invested the same day. The staff in the University Investment Office works daily to keep up with the investment decisions, Brinkerhoff said. The University has investments in various government and municipal bonds, stocks, mortgages, industry, and securities. Short-term investments for tuition fees and state appropriations include certificates of deposit, commercial paper, and money markets. Earlier this year, the Board of Regents came under fire for attempting to add five weapons manufacturing companies to the University's master list of common stocks. Many studen- ts contended the investments were morally wrong and demanded they be withdrawn. The Regents voted at their February meeting to accept the companies for possible future investments. "I don't agree that the way to peace is through reducing defense," said Regent Thomas Roach (D-Saline). Jon Feiger, Michigan Student Assembly vice president for legislative relations at the time, told the Board that "it is morally wrong for the University to invest its funds in any military corporations." The five companies in question were the Loral Corporation, Sanders Associates, General Dynamics Corporation, McDonnel-Douglas Corporation, and Northrup Corporation. A recommendation to add the companies to the master list of ,investments was only part of the full National Bank of Detroit Report on Investments at the Regent's meeting (the University conducts its financial business through NBD's Trust Department). NBD also proposed adding hospital management industry, natural gas industry, and railroad stocks to the list. Not every stock on the master list will be added to the University portfolio. The list only provides potential cor- porations. The NBD report also presented a very en- couraging view for investments in the stock market. Revenue from investments has increased with time, especially during the last few years. Income was $7 million in the '72-'73 academic year and only rose to $11 million in fiscal year '77-'78. The following year, however, income rose to $14 million, and the year after it reached $18.7 million, according to Brinkerhoff. me The income from the endowment funds is designated for, specific programs, but investment pool profits often find' themselves in the general fund. This reduces the need for an equal amount of tuition or state appropriation. Among the University's bond holdings are such- organizations as the United States Treasury, the ' Bank America Corporation, AT&T, Detroit Edison, Marquet- ' te Michigan Municipal, and the Alaska Pipeline Company. Stock holdings include General Motors, DuPont, and Texas Instruments. The book value of all the Common Stock is over $49 million, with a market value of almost $66 million, accor- ding to the 1980 Schedule of Investments, for the year ending June 30, 1980. Total investments--endowment and other invested fun- ds-held by the University were valued, according to the 1980 Schedule, at $114.5 million with a market value of over $128.7 million. There is money working for the University in all these in- vestments, Brinkerhoff said. Even though the University is not out to make a profit, he added, the advantages of invest- ment outweigh the costs. Dailf staff writers Pam Fickinger and Barry Witt filed reports for this story. -NK k I r 7 Tattoos unlike any you've seen befor (BFA and MA in Fine Arts) Custom designs and cover-ups to be a permanent expression of your unique personality. -761-3450 1O6E. Liberty 6 By appointment 1 I" V In because~ we wantt be, your b 1M41 Our ReadyTellers are among the most popular night spots in Ann Arbor. They may not offer you fun and frivolity. But they do let you make deposits... pay bills ... access your Interest-On-Checking account ... and withdraw the cash it takes to keep your good times rolling. 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