REGENTS FINANCIAL OPERATIONS. 189 



the Mechanic Arts, has ever been given, nor has the manual labor 

 system, required by law in connection with its construction, and 

 made a prominent feature in other industrial colleges, been encour 

 aged or practiced. 



We find in the organic laws of the University provisions which 

 virtually give absolute control of its property to the Regents, allow 

 ing them to sell, invest, reinvest, bestow, etc., to put their own con 

 struction upon the meaning of grants, gifts, and endowments, with 

 out requiring them to take any oath of office, with no guaranty for 

 the rightful exercise of these powers and no redress, should they be 

 abused. The terms of the organic act states that their office &quot; shall 

 be held and deemed exclusively a private trust/ The presentation 

 of the memorial of the State Grange and Mechanics to the Legis 

 lature, in compliance with the resolution at the San Jose meeting, 

 resulted in a fuller exhibit of the financial affairs of the University 

 than had previously appeared. A joint committee of the Senate and 

 Assembly, appointed at their request, received from them, as testi 

 mony an official report dated March 3, 1874, &quot;which was carefully 

 considered by them, unanimously adopted, and certified to as correct 

 in all the particulars.&quot; 



We find this report to contradict itself in important particulars, to 

 be at variance with other facts well attested, and documentary evi 

 dence, especially in regard to the sale of lands donated by Congress, 

 and the investment of the proceeds. The Eegents tell us (in page 37 

 of their Statements) that they have either sold or contracted to sell 

 the entire grant of 150,000 acres at $5 per acre in gold coin, net, 20 

 per cent, being paid down, and the remaining 80 per cent, bearing 

 interest at 10 per cent. , which should give a productive fund of 

 $750,000, or an income of $75,000 per annum. With prudent man 

 agement, this would be the value of the Congressional grant to-day, 

 even at the low price (for California) of five dollars an acre. The 

 law of Congress requires the proceeds from the grant to be invested 

 in United States, State, or other safe stocks. 



Paying no attention to this requirement, the Eegents have invested 

 it as follows: Of the $114,025 47 received of purchasers, $20,000 

 was invested in a vacant lot in the city of Oakland, for which the 

 Agricultural department had no use whatever; $11,386 25 in paying 

 interest on a debt injudiciously assumed by the Eegents; $2,929 20 

 for some purpose not explained; amounting in all to $34,315 51, ex 

 pended for the purchase of the Bray ton estate, for which Eegent 

 Tonipkins was agent. The remainder, $79,709 9G, is deposited by 

 the Treasurer of the University, Eegent Ealston, in the Bank of Cal 

 ifornia, of which Eegent and Treasurer Ealston is President, and 

 bears interest at six per cent per annum, while the Eegents of the 

 University, on a mortgage of $50,000, assumed in the purchase of 

 tbe aforesaid Brayton estate, are paying nine per cent, per annum. 

 The 80 per cent, credit upon $150,663 58 is in the form of notes 

 bearing interest at ihe rate of 10 per cent, per annum. Applications 

 on file with the Land Agent of the University, and certificates of de 

 posit to the amount of $94,573 are now in his hands, and this money 

 all or mostly in the Bank of California. No account for interest al 

 lowed appears in the exhibit of the Eegents, though we learn that 



