REPORT OF THE SECRETARY. 5 



FINANCES. 



While with this is presented the report of the Executiv^e Committee 

 and other statements, showing- that the funds are in the usual sense in 

 a satisfactory condition, this seems to be a proper occasion to say some- 

 tliing about the hirger questions of finance, for, as time passes, the 

 l)urchasing' power of money imperceptibly but surely alters, until finally 

 the consideration is forced upon ns that these slow changes, though 

 almost inappreciable from year to year, have, in the half century already 

 elapsed since Congress accepted Smithson's beciuest, essentially dimin- 

 ished the actual value of the fund, while its nominal value remains 

 unchanged. 



I do not now refer merely to the fact that we measure all things by 

 another scale in 1888 from what we did in 183G; or that, owing to the 

 immense increase of public wealth, the capital of the original bequest, 

 which then was greater than any but a few private fortunes, has be- 

 come relatively so inconsiderable to-day. More than this is meant. It 

 is meant that the actual purchasing power of each dollar is, for our 

 purposes, notably less; that it is being forced upon us that we can not 

 print as many books, or pay as many employes, or make as many re- 

 searches as when the scheme of expenditure was first fixed, and that, 

 consequently, a scheme which was wise then, because not only desirable 

 but feasible, is not necessarily so now. 



I know that this consideration is not presented to the Eegents for the 

 first time, and that a«committee of their number, as long ago as 1877, 

 observed — 



"That the income of the Smithsonian fund, while nominally fixed, is 

 growing a(!tually less year by year, with the rapidly-changing value of 

 money, and of less and less imi)ortance in. the work that it accomplishes 

 with reference to the immense extension of the country since the Gov- 

 ernment accepted the trust." 



In a time, short with reference to the probable life of the Institution, 

 the income of the Smithsonian fund ])roper will necessarily become en- 

 tirely inadequate to carry on the object of Henry's care on the scfifle 

 which he inaugurated. Even when this is the case, it seems to me that 

 this income of the Smithsonian bequest will still have a value wholly 

 beyond its nominal one, for it will at least maintain the Institution in 

 that position of inde])endence and disinterestedness which are its most 

 potent means of infiuencing others to aid in carrying out the intention 

 of its founder. 



It is, nevertheless, most evidently desirable that the fund should be 

 enlarged both by Governmental recontribution and by i)rivate bequest, 

 so as to constantly represent at least the original position of its finances 

 relatively to those of the country and contemporary institutions of learn- 

 ing; a position which we can estimate from the observation that there 

 are several such institutions, which were at first scarcely on a par with it 

 financially, but whose funds, having been invested so as to share in the 



