SIA RU000001, Smithsonian Institution Board of Regents, Minutes, 1846-

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[[underline]]ADMINISTRATIVELY CONFIDENTIAL[[/underline]] [No part of these minutes is to be divulged unless specifically authorized by the Secretary.] SMITHSONIAN INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS January 25, 1977 INDEX [[2-column table]] [[headings]] | [[underline]]Page[[/underline]][[/headings]] Attendance | 1 Welcome to New Regents | 2 Keeping the Regents informed | 2 Request of United Press International | 4 Minutes of Meeting of October 1, 1976 | 4 Report of the Executive Committee | 5 Financial Report | 6 Museum Support Center | 26 Executive Session | 36 Executive Level Salaries | 38 Smithsonian Tropical Research Institute Barro Colorado Island | 38 Hirshhorn Film | 41 National Portrait Gallery | 43 National Collection of Fine Arts | 48 Hirshhorn Museum and Sculpture Garden | 80 Policy on Public Disclosure of Internal Audits | 87 Museum of African Art | 89 National Armed Forces Museum Advisory Board | 91 [[/2-column table]]

SMITHSONIAN INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS January 25, 1977 [[underline]]Attendance[[/underline]] The meeting of the Board of Regents was called to order by the Chancellor on January 25, 1977, at 10:15 a.m., in the Regents Room in the Smithsonian Institution Building. Present were: Chief Justice Warren E. Burger, Chancellor J. Paul Austin John Nicholas Brown William A. M. Burden Robert F. Goheen Caryl P. Haskins Judge A. Leon Higginbotham James E. Webb, Chairman, Executive Committee Senator Barry Goldwater Senator Henry M. Jackson Senator Claiborne Pell Representative Elford A. Cederberg Representative George H. Mahon Representative Sidney R. Yates S. Dillon Ripley, Secretary The Vice President, Walter F. Mondale, was unable to be present because of travel out of the country. Dr. Gell-Mann was absent because of an international conference in Florida. Mr. Thomas J. Watson, Jr., was unable to be present because his IBM Board was having its annual meeting. Also present were Assistant Secretaries Blitzer, Challinor, Euell, Perrot, Jameson; Treasurer T. Ames Wheeler; General Counsel Peter G. Powers; Director of Membership and Development James Symington; Executive Assistant to the Secretary Dorothy Rosenberg; Special Assistant to the Secretary James M. Hobbins and Administrative Assistant to the Chief Justice Mark Cannon.

-2- [[underlined]] Welcome to New Regents [[/underlined]] On behalf of the Board the Chancellor welcomed the newly appointed Regents: Senator Barry Goldwater, replacing Senator Hugh Scott, and Senator Claiborne Pell, replacing Senator Frank E. Moss. The Chancellor explained to the new Regents that the Executive Committee of the Board meets in advance of the full meeting. He emphasized that unlike a caucus, it affords an opportunity for the small committee to be briefed on everything that is on the agenda, and to identify the people who will be fully informed on any particular subject so that they can provide all necessary information to the Regents. It is important to demonstrate that the Executive Committee knows what is going on. Through the good offices of James Webb, the Chairman, who devotes a great deal of time regularly working with the Secretary and the staff, the Executive Committee is kept in very close touch with all major policy matters, and they are fully discussed at the Executive Committee meetings. Thus the Committee became fully familiar with the matters on this agenda at our meeting last evening and will also be able to respond. [[underlined]] Keeping the Regents Informed [[/underlined]] Mr. Ripley called attention to the publications in front of each Regent, including the directory of the Executive Staff which had been requested by Mr. Watson as a means of identifying the senior staff of the Institution. Another observation was also made

-3- at the last meeting of the Board concerning the extreme importance of attendance at the Regents meetings. Mr. Ripley stated that in order to keep the Regents apprised of the various official activities taking place at the Smithsonian Institution, we have depended on a variety of means to convey information, request advice, and to seek opinions of the Regents. One method of giving information has been the Regents Newsletter, originated in 1966 and published periodically when there was news to be conveyed. When decisions have been sought, the subject matter, depending on the urgency of a particular request, has been handled by telephone, telegram or letter. The Secretary has also arranged visits with the Regents, as often as possible, in an effort to get their views on any matter of interest. However, the general discussions which take place at the three regular Regents' meetings each year are of vital importance, and a concerted effort is made to assure attendance at the Regents' meetings. Mr. Ripley mentioned that it was of interest to see, while perusing the minutes of the Regents' meetings of 1891, 1892 and 1893, that the minutes included statements such as "Excuses for non-attendance were read from Dr. J. C. Welling, caused by illness, and from Dr. A. D. White, by important engagements." Another said, "A letter from Doctor J. B. Angell was read, stating the reasons for his absence from the meeting."

-4- It is hoped that the change of time for this meeting will permit greater attendance by all of the Regents. Today's attendance is a very favorable indication that future meetings will be just as well attended. [[underline]]Request of United Press International[[/underline]] Mr.Ripley reported that a letter request had been received from a reporter with United Press International seeking permission to attend the Regents meeting. Mr. Mike Feinsilber represents the cultural and arts side of UPI and regularly covers many Smithsonian activities. The consensus of the Board was that at the conclusion of this meeting the Secretary is authorized to meet with this reporter, as well as others from the media, and brief them informally about the meeting. [[underline]]Minutes of Meeting of October 1, 1976[[/underline]] It was noted that the Minutes of the Regents' meeting of October 1, 1976, had been circulated to the members of the Board. The Board having no changes to suggest recommended approval of the Minutes. It was VOTED that the Minutes of the Meeting of October 1, 1976, as circulated on October 28, 1976, are approved.

-5- [[underline]]Report of the Executive Committee[[/underline]] Mr. Webb reported that the Executive Committee met on January 24, 1977 at 4 p.m. in the Chambers of the Chief Justice. Attending were: Chief Justice Warren E. Burger, Chancellor James E. Webb, Chairman Caryl P. Haskins William A. M. Burden S. Dillon Ripley, Secretary T. Ames Wheeler, Treasurer Dorothy Rosenberg, Executive Assistant to the Secretary * * * * * * * * * * * Mr. Webb stated that the Executive Committee had considered the items on the Agenda, and their recommendations, together with any revisions resulting from their discussions, are contained in the following papers.

-6- [[underline]]FINANCIAL REPORT[[/underline]] The Secretary called on the Treasurer, Mr. Wheeler, to present a summary of this financial Report. [[underline]]Status of Federal Appropriations[[/underline]] [[underline]]For Operations[[/underline]]: With the approval of the Office of Management and Budget we have now requested from Congress a supplemental appropriation for the current year, [[underline]]FY 1977[[/underline]], totaling $3,403,000 to fund this year's costs of new Federal pay raises that occurred primarily in October, 1976. Assuming that the funds are appropriated, the FY 1977 operating fund level would be $90,890,000, including both the Science Information Exchange and Foreign Currency program. For [[underline]]FY 1978[[/underline]] operations, as shown on Exhibit A, the President approved, and we have requested from Congress, appropriations totaling $95,510,000. The total includes $89,033,000 for regular operations (Salaries and Expenses), $1,977,000 for the Science Information Exchange, and $4,500,000 in Foreign Currency funds (this includes an amount of $1 million as the final payment for the Philae project). The S&E amount allows about $4,600,000 (including about $1,000,000 reapplied from previous Bicentennial funds and other base resources) to be used for new high priority program and support needs. Of this amount, some $1,000,000 will fund higher costs associated with legislated pay raises and health benefits,

-7- while the balance will be applied to such items as support for higher operating costs at new Master Plan Facilities at the Zoo, added computer capacity both in Washington and at the Astrophysical Observatory, additional guard protection, increased support for exhibits maintenance, and the production of traveling exhibitions and additional acquisition funds for works of art. Although disallowing our request for a modest working fund, OMB indicated willingness to assist us in working with Congress to establish increased financial flexibility. New reprogramming guidelines are now pending before our Appropriations Subcommittees. These proposed guidelines provide for some movement of funds between S&E line items without prior approval. If these guidelines are approved, operating problems of the Institution will be greatly eased. [[underline]]Construction - FY 1978[[/underline]]: Our FY 1978 budget to Congress totals $11,025,000, including $10,700,000 for restoration, improvement and repair items and $325,000 to initiate planning of a Museum Support Center. Included in the former amount is $7,100,000 for the sixth floor addition of a study center and library to the Museum of History and Technology Building. Another $2,600,000 will fund needed repairs and improvements to a wide variety of Smithsonian facilities: --Construction of a dormitory adjacent to the Multiple Mirror Telescope at Mt. Hopkins; modifications for employee safety and health at Silver Hill; and multi-year projects such as the continued

-8- renovation of the Arts and Industries Building, repairs to the Renwick Gallery exterior and the History and Technology terrace, installation of building equipment monitoring systems, improvements for handicapped persons, correction of hazardous conditions and installation of fire detection and control systems. The balance of $1,000,000 will be applied to the repair, renovation and improvement of Zoo facilities at Rock Creek and Front Royal. No new Zoo Master Plan construction will be sought in FY 1978, while we direct our attention toward completing major projects previously funded and toward fulfilling operational requirements of facilities already constructed or now underway. [[underline]]Unrestricted Trust Funds[[/underline]] Final results for FY 1976 and the Transition Quarter were substantially the same as estimated at the last Regents meeting. As shown in Exhibit B, after covering administrative costs and allotments for a variety of operating needs, transfers were made of $666,000 to bureaus (as interest payments on their fund balances and as a share of income from auxiliary activities), $2,702,000 to Plant Funds (for construction of the West Court facility, Carnegie Mansion renovation, and retirement of mortgages at the Chesapeake Bay Center), and $1,776,000 to Endowment Funds. In addition, working capital funds were increased by $307,000 to a level slightly in excess of $4.0 million. In response to a question about the Associates showing a loss, it was explained that if the Magazine were combined with other activities under the Associates, a much more favorable net gain

-9- would result. Also, it was noted that the expenses of the Associates' reception center were now charged against this account. In answer to Judge Higginbotham's question relating to the inventory discrepancy of last year, Mr. Wheeler stated that a recent inventory of the shops was more favorable than the earlier inventory and indicated that there are better controls and improved practices at the warehouse. A complete review of the financial results for this period is contained in the Secretary's Statement being distributed at this meeting. Projected unrestricted Trust Fund results for FY 1977, also shown in Exhibit B, have been modified only slightly from the budget approved by the Board of Regents at the last meeting. As outlined at that time, increases are being projected for the year in concessions income (due to new facilities), Museum Shops, and [[underline]]Smithsonian[[/underline]] Magazine (1.5 million subscribers expected this year). While a substantial amount of these revenues will be needed to meet increased administrative costs and operating allotments, it should be possible to transfer some $557,000 to the bureaus for interest and revenue-sharing; $114,000 will be required for Plant Fund expenses (Chesapeake Bay scheduled debt retirement and $50,000 for Carnegie Mansion renovation), and the remaining surplus could then be transferred to Endowment Funds.

-10- [[underline]]Restricted Trust Funds[[/underline]] Restricted and Special Purpose Trust Funds are summarized on Exhibit C, showing actual results through September 30, 1976, with projections for FY 1977. Gift and grant income is projected to be lower in the current year than during the Bicentennial due to the reduction of this year's Folklife Festival as well as the return of Hillwood to the Post Foundation. Miscellaneous income, however, will increase, since this category includes receipts from activities such as the new NASM Theatre and Spacearium. Projections for restricted funds, however, must be largely speculative since they depend more on the generosity of donors than on Institutional planning. [[underline]]Balance Sheet[[/underline]] Exhibit D summarizes the Balance Sheet for Current, Endowment, Plant and Agency Funds. The Current Funds Balance Sheet as of September 30, 1976, shows the Institution to be in a strong financial position. Cash items (cash plus short-term investments) were approximately $10.0 million, which was down some $3.0 million from June 30, 1976, due to (1) transfers to Plant and Endowment Funds, and (2) temporary increases in receivables (due to large expenditures at the Folklife Festival from reimbursable grants), prepaid expenses (primarily for Associates tours scheduled this fall and winter) and deferred Magazine expenses (resulting from the fall [[underline]]Smithsonian[[/underline]] promotion effort).

-11- [[underline]]Endowment Funds[[/underline]] Smithsonian Endowment Funds on December 31, 1976 totaled approximately $45,500,000. This includes the $1,000,000 in the U.S. Treasury and a small amount of miscellaneous securities, but principally the Consolidated Endowment Fund which is supervised by our three investment managers and which totaled $44,403,000 on that date, compared to $43,032,000 on September 30, 1976, and $37,450,000 on December 31, 1975. Types of securities held in this Fund, together with a performance index based on Total Return (interest and dividend yield plus market appreciation, but adjusted for additions and withdrawals of funds) is shown below. Investment performance of the Fund since June 30, 1971 has trailed both of the major market equity indexes. Over the past 12 months the index for Smithsonian funds has increased 18.6%, compared to 22% for both the Dow Jones Industrial average and the S&P's 500. [[underline]]Consolidated Endowment Fund [[/underline]] ($1,000's) [[Four column table]] | [[underline]]June 30, 1971[[/underline]] | [[underline]]Dec. 31, 1975[[/underline]] | [[underline]]Dec. 31, 1976[[/underline]] Cash | $49 (-1%) | $ 597 (2%) | $ 875 (2%) Bonds | 10,404 (24%) | 7,296 (19%) | 5,532 (12%) Cv. Bonds & Pfd. | 1,472 (3%) | 2,484 (7%) | 3,138 (7%) Common Stock | 31,972 (74%) | 27,073 (72% | 34,858 (79%) | -------- --- | -------- --- | -------- --- Total| $43,897 (100%) | $37,450 (100%) | $44,403 (100%) Total Accomplishment Index | 100.0 | 103.1 | 122.3 DJIA w/Income | 100.0 | 113.2 | 138.1 S&P's 500 w/Income | 100.0 | 105.2 | 128.7

-12- Exhibit A [[underline]]SMITHSONIAN INSTITUTION FINANCIAL REPORT[[/underline]] The Smithsonian Institution derives its financial support as follows: ($1,000's) [[6-column table]] [[headings]] | [[underline]]FY 1978[[/underline]] Congr. Req. | [[underline]]FY 1977[[/underline]] (Budget) | Transition [[underline]] Quarter [[/underline]] (Actual) | [[underline]]FY 1976[[/underline]] (Actual) | [[underline]]FY 1975[[/underline]] (Actual) [[/headings]] [[underline]]FOR OPERATING PURPOSES[[/underline]]: | | | | | [[underline]]FEDERAL APPROPRIATIONS[[/underline]] | | | | | Salaries and Expenses | $89,033 | $85,432* | $22,629 | $81,564 | $70,706 Smithsonian Sci. Info. Exch. | 1,977 | 1,977 | 521 | 1,940 | 1,805 Special Foreign Curr. Pgm. | [[underline]] 4,500[[/underline]] | [[underline]] 3,481[[/underline]] | [[underline]] 0[[/underline]] | [[underline]] 500[[/underline]] | [[underline]] 2,000[[/underline]] | $95,510 | $90,890 | $23,150 | $84,004 | $74,511 Research grants and contracts | | 11,500 | 3,987 | 11,525 | 12,292 Nonfederal Funds: | | | | | Gifts (excl. gifts to endow.) | | | | | Restricted and sp. purpose | | 3,500 | 708 | 4,595 | 4,384 Unrestricted purpose** | | 50 | 16 | 66 | 46 Income from endow. and current funds invested | | | | | Restricted purpose | | 1,810 | 504 | 1,637 | 1,727 Unrestricted purpose** | | 1,175 | 263 | 1,107 | 950 Revenue-producing acts.(net) | | 5,300 | 1,147 | 3,390 | 2,308 Miscellaneous | | [[underline]] 3,409[[/underline]] | [[underline]] 706[[/underline]] | [[underline]] 2,299[[/underline]] | [[underline]] 1,405[[/underline]] Total Operating Support | | [[underline]]$117,634[[/underline]] | [[double-underline]]$30,481[[/double-underline]] | [[double-underline]]$108,623[[/double-underline]] | [[double-underline]]$97,623[[/double-underline]] [[underline]]CONSTRUCTION FUNDS[[/underline]] | | | | | [[underline]]Federal Construction Funds[[/underline]]: | | | | | National Zoological Park | $ 1,000 | $ 6,580 | $ 1,440 | $ 8,390 | $ 9,420 Nat'l Air and Space Museum | - | - | - | 2,500 | 7,000 Other Construction | 325 | - | - | - | - Restor. and Renov. of Bldgs. | [[underline]] 9,700[[/underline]] | [[underline]] 2,950[[/underline]] | [[underline]] 400[[/underline]] | [[underline]] 1,192[[/underline]] | [[underline]] 1,490[[/underline]] Total Fed. Constr. Funds | [[double-underline]]$11,025[[/double-underline]] | [[double-underline]]$ 9,530[[/double-underline]] | [[double-underline]]$ 1,840[[/double-underline]] | [[double-underline]]$12,082[[/double-underline]] | [[double-underline]]$17,910[[/double-underline]] [[underline]]Non-Fed.Plant & Land Acq. Funds[[/underline]]: | | | | | Cooper-Hewitt | $ | $ | $ 30 | $ 425 | $ 162 Hirshhorn Museum | | | - | - | - Chesapeake Bay Center | N.A. | N.A. | - | 5 | 15 Other | | [[underline]] - [[/underline]] | [[underline]] 100[[/underline]] | [[underline]] 10[[/underline]] Total Private | [[double-underline]] [[/double-underline]] | [[double-underline]] [[/double-underline]] | [[double-underline]]$ 30[[/double-underline]] | [[double-underline]]$ 530[[/double-underline]] | [[double-underline]]$ 187[[/double-underline]] [[underline]]ENDOWMENT FUND GIFTS AND BEQUESTS[[/underline]] | [[double-underline]] [[/double-underline]] | [[double-underline]] - [[/double-underline]] | [[double-underline]]$ 24[[/double-underline]] | [[double-underline]]$ 45[[/double-underline]] | [[double-underline]] $ - [[/double-underline]] [[underline]]NUMBER OF PERSONNEL[[/underline]] (ON BOARD) | | [[underline]]12/31/76[[/underline]] | [[underline]]6/30/76[[/underline]] | [[underline]]6/30/75[[/underline]] | [[underline]]6/30/74[[/underline]] Federal | | 3,327 | 3,517 | 3,257 | 2,994 Trust Fund | | [[underline]]1,234[[/underline]] | [[underline]]1,376[[/underline]] | [[underline]]1,182[[/underline]] | [[underline]]1,104[[/underline]] Total | | 4,561 | 4,893 | 4,439 | 4,098 [[/6-column table]] [[short line]] * Includes provision for FY 1977 pay increases which are being sought in supplemental. ** Excluding gifts to Associates (included under Revenue-producing Activities).

-13- Exhibit B [[underline]]UNRESTRICTED TRUST FUNDS - OPERATING STATEMENT[[/underline]] ($1,000's) [[6-column table]] [[headings]] [[horizontal line]] | Proj.Budget | [[span 4 columns]]A C T U A L[[/span 4 columns]] | FY 1977 | Trans. Qtr. | FY 1976 | FY 1975 | FY 1974 [[horizontal line]] [[/headings]] Income - Investment | $ 1,175 | $ 263 | $ 1,107 | $ 950 | $ 744 - Gifts | 50 | 16 | 66 | 46 | 121 - Concessions & Misc. | [[underline]] 1,409[[/underline]] | [[underline]] 530[[/underline]] | [[underline]] 711[[/underline]] | [[underline]] 228[[/underline]] | [[underline]] 284[[/underline]] Total Income | $ 2,634 | 809 | 1,884 | 1,224 | 1,179 [[underline]]Auxiliary Activities [[/underline]] | | | | | Gross Revenue | 37,307 | 8,201 | 26,282 | 18,802 | 12,735 Less Costs and Expenses | [[underline]] 32,007[[/underline]]* | [[underline]] 7,054[[/underline]]* | [[underline]] 22,892[[/underline]]* | [[underline]] 16,494[[/underline]] | [[underline]] 10,965[[/underline]] Total Act. Gain (Loss) | 5,300* | 1,147* | 3,390* | 2,308 | 1,770 [[underline]]Expenditures[[/underline]] | | | | | Admin. Exp/Allotments | 7,421* | 1,799* | 5,739* | 4,951 | 4,187 Less Adm. O/H Recovery | [[underline]] 4,858[[/underline]] | [[underline]] 1,201[[/underline]] | [[underline]] 4,558[[/underline]] | [[underline]] 3,644[[/underline]] | [[underline]] 3,345[[/underline]] Net Adm. Expense | [[underline]] 2,563[[/underline]]* | [[underline]] 598[[/underline]]* | [[underline]] 1,181[[/underline]]* | [[underline]] 1,307[[/underline]] | [[underline]] 842[[/underline]] [[underline]]Net Gain Bef. Rev. Sharing[[/underline]] | [[double-underline]] 5,371[[/double-underline]] | [[double-underline]] 1,358[[/double-underline]] | [[double-underline]] 4,093[[/double-underline]] | [[double-underline]] 2,225[[/double-underline]] | [[double-underline]] 2,107[[/double-underline]] Revenue Sharing - Int. & Act. | 557 | 203 | 436 | 416 | 95 [[underline]]Net Gain (Loss) before Trans.[[/underline]] | [[double-underline]] 4,814[[/double-underline]] | [[double-underline]] 1,128[[/double-underline]] | [[double-underline]] 3,657[[/double-underline]] | [[double-underline]] 1,809[[/double-underline]] | [[double-underline]] 1,134[[/double-underline]] Transfers - To Plant Funds | 114 | 207 | 2,495 | 97 | 1,134 - To Endow. Funds | [[underline]] 4,700[[/underline]] | [[underline]] 755[[/underline]] | [[underline]] 1,021[[/underline]] | [[underline]] 1,422[[/underline]] | [[underline]] 100[[/underline]] [[underline]]Net Gain (Loss) after Trans.[[/underline]] | [[double-underline]] - [[/double-underline]] | [[double-underline]] 166[[/double-underline]] | [[double-underline]] 141[[/double-underline]] | [[double-underline]] 290[[/double-underline]] | [[double-underline]] 775[[/double-underline]] [[double-underline]]Ending Fund Balance[[/double-underline]] | [[double-underline]]$ 4,074[[/double-underline]] | [[double-underline]]$ 4,074[[/double-underline]] | [[double-underline]]$ 3,908[[/double-underline]] | [[double-underline]]$ 3,767[[/double-underline]] | [[double-underline]]$ 3,477[[/double-underline]] [[underline]]DETAIL OF AUXILIARY ACTIVITIES[[/underline]] | | | | | [[underline]]Magazine[[/underline]] - Income | $23,500 | $4,709 | $ 16,042 | $10,816 | $ 7,127 Expenses | [[underline]] 18,000[[/underline]]* | [[underline]] 3,690[[/underline]]* | [[underline]] 12,654[[/underline]]* | [[underline]] 8,895[[/underline]] | [[underline]] 5,800[[/underline]] Net Gain (Loss) | 5,500 | 1,019 | 3,388 | 1,921 | 1,327 [[underline]]Associates[[/underline]] - Gifts | 174 | 49 | 177 | 145 | 260 Other Income | [[underline]] 5,280[[/underline]] | [[underline]] 834[[/underline]] | [[underline]] 4,506[[/underline]] | [[underline]] 2,749[[/underline]] | [[underline]] 1,778[[/underline]] Total Income | 5,454 | 883 | 4,683 | 2,894 | 2,038 Expenses | [[underline]] 5,609[[/underline]] | [[underline]] 891[[/underline]] | [[underline]] 4,815[[/underline]] | [[underline]] 2,847[[/underline]] | [[underline]] 1,775[[/underline]] Net Gain (Loss) | (155) | (8) | (132) | 47 | 263 [[underline]]Shops[[/underline]] - Income | 6,641 | 1,699 | 3,619 | 3,221 | 2,141 Expenses | [[underline]] 6,641[[/underline]] | [[underline]] 1,699[[/underline]] | [[underline]] 3,619[[/underline]] | [[underline]] 2,804[[/underline]] | [[underline]] 1,915[[/underline]] Net Gain (Loss) | 400 | 153 | 63 | 417 | 226 [[underline]]Press[[/underline]] - Income | 198 | 136 | 173 | 265 | 111 Expenses | [[underline]] 308[[/underline]] | [[underline]] 182[[/underline]] | [[underline]] 319[[/underline]] | [[underline]] 361[[/underline]] | [[underline]] 200[[/underline]] Net Gain (Loss) | (110) | (46) | (146) | (96) | (89) [[underline]]Performing Arts[[/underline]] - Income | 525 | 495 | 527 | 479 | 597 Expenses | [[underline]] 625[[/underline]] | [[underline]] 504[[/underline]] | [[underline]] 637[[/underline]] | [[underline]] 558[[/underline]] | [[underline]] 493[[/underline]] Net Gain (Loss) | (100) | (9) | (110) | (79) | (104) [[underline]]Product Devel.[[/underline]] - Income | 131 | 145 | 585 | 302 | 107 Expenses | [[underline]] 114[[/underline]] | [[underline]] 23[[/underline]] | [[underline]] 127[[/underline]] | [[underline]] 84[[/underline]] | [[underline]] 70[[/underline]] Net Gain (Loss) | 17 | 122 | 458 | 218 | 37 [[underline]]Other[[/underline]]** - Income | 858 | 134 | 653 | 825 | 614 Expenses | [[underline]] 1,110[[/underline]] | [[underline]] 218[[/underline]] | [[underline]] 784[[/underline]] | [[underline]] 945[[/underline]] | [[underline]] 712[[/underline]] Net Gain (Loss) | (252) | (84) | (131) | (120) | (98) [[underline]]Total Activities[[/underline]] - Income | 37,307 | 8,201 | 26,282 | 18,802 | 12,735 Expenses | [[underline]] 32,007[[/underline]] | [[underline]] 7,054[[/underline]] | [[underline]] 22,892[[/underline]] | [[underline]] 16,494[[/underline]] | [[underline]] 10,965[[/underline]] Net Gain (Loss) | [[underline]]$ 5,300[[/underline]] | [[double-underline]]$1,147[[/double-underline]] | [[double-underline]] $ 3,390[[/double-underline]] | [[double-underline]]$ 2,308[[/double-underline]] | [[double-underline]]$ 1,770[[/double-underline]] [[/6-column table]] [[short horizontal line]] * Differ from previously reported figures due to charging, reserve for possible tax on magazine advertising revenues to admin. allots. rather than directly to magazine expenses. ** This includes SITES, Belmont Photo Services, Commons and Television Programs.

-14- Exhibit C [[underline]] RESTRICTED TRUST FUNDS - OPERATING STATEMENT[[/underline]] ($1,000's) [[6-column table]] [[headings]] [[horizontal line]] | Proj. Budget | [[span 4 columns]]A C T U A L[[/span 4 columns]] | FY 1977 | Trans. Qtr. | FY 1976 | FY 1975 | FY 1974 [[horizontal line]] [[/headings]] [[underline]]RESTRICTED & SPECIAL PURPOSE FUNDS[[/underline]] | | | | | [[underline]]INCOME[[/underline]]: | | | | | Endowment Income | $1,810 | $ 504 | $1,637 | $1,727 | $1,754 Gifts and Grants | 3,500 | 708 | 4,595 | 4,384 | 2,093 Rev. Shar'g & Int Trans | 557 | 230 | 436 | 416 | 98 Miscellaneous | [[underline]] 2,000[[/underline]] | [[underline]] 176[[/underline]] | [[underline]] 1,588[[/underline]] | [[underline]] 1,177[[/underline]] | [[underline]] 826[[/underline]] Total Income | $7,867 | $1,618 | $8,256 | $7,704 | $4,771 [[underline]]FUNDS APPLIED[[/underline]]: | | | | | Freer Operating-Income | $1,050 | $ 238 | $1,295 | $1,022 | $1,176 -Expenses | [[underline]] 1,084[[/underline]] | [[underline]] 338[[/underline]] | [[underline]] 1,126[[/underline]] | [[underline]] 1,088[[/underline]] | [[underline]] 1,135[[/underline]] -Ending Balance | $ 160 | $ 194 | $ 294 | $ 125 | $ 191 Cooper-Hewitt Oper.-Inc. | $ 477 | $ 13 | $ 217 | $ 210 | $ 134 -Expenses | 677 | 89 | 281 | 244 | 190 -Net Transfers in (out) | [[underline]] 200[[/underline]] | [[underline]] 76[[/underline]] | [[underline]] 64[[/underline]] | [[underline]] 34[[/underline]] | [[underline]] 170[[/underline]] -Ending Balance | $ -0- | $ -0- | $ -0- | $ -0- | $ -0- Arch. Am. Art Oper.-Inc. | $ 250 | $ 20 | $ 184 | $ 329 | $ 199 -Expenses | [[underline]] 250[[/underline]] | [[underline]] 64[[/underline]] | [[underline]] 252[[/underline]] | [[underline]] 201[[/underline]] | [[underline]] 200[[/underline]] -Ending Balance | $ 209 | $ 209 | $ 253 | $ 321 | $ 193 Ft. Pierce Oper.-Inc. | $ 596 | $ 225 | $ 538 | $ 526 | $ 953 -Expenses | 650 | 96 | 501 | 645 | 1,007 -Net Transfers in (out) | [[underline]] (34)[[/underline]] | [[underline]] (83)[[/underline]] | [[underline]] - [[/underline]] | [[underline]] (26)[[/underline]] | [[underline]] 300[[/underline]] -Ending Balance | $ -0- | $ 88 | $ 42 | $ 5 | $ 150 Hillwood Oper.-Inc. | $ - | $ 32 | $ 389 | $ 532 | $ 287 -Expenses | [[underline]] 2[[/underline]] | [[underline]] 41[[/underline]] | [[underline]] 476[[/underline]] | [[underline]] 511[[/underline]] | [[underline]] 210[[/underline]] -Ending Balance | $ -0- | $ 2 | $ 11 | $ 98 | $ 77 All Other Funds - Income | $5,494 | $1,090 | $5,633 | $5,085 | $2,022 -Expenses | 5,476 | 628 | 5,134 | 2,844 | 1,950 -Net Transfers in (out) | [[underline]] 34[[/underline]] | [[underline]] 24[[/underline]] | [[underline]] 98[[/underline]] | [[underline]] 3[[/underline]] | [[underline]] (33)[[/underline]] -Ending Bal. (see below) | $6,031 | $5,979 | $5,493 | $4,896 | $2,652 Total Restricted Funds Inc. | $7,867 | $1,618 | $8,256 | $7,704 | $4,771 -Expenses | 8,139 | 1,256 | 7,770 | 5,533 | 4,692 -Net Transfers in (out) | [[underline]] 200[[/underline]] | [[underline]] 17[[/underline]] | [[underline]] 162[[/underline]] | [[underline]] 11[[/underline]] | [[underline]] 437[[/underline]] -Ending Balance | [[double-underline]]$6,400[[/double-underline]] | [[double-underline]]$6,472[[/double-underline]] | [[double-underline]]$6,093[[/double-underline]] | [[double-underline]]$5,445[[/double-underline]] | [[double-underline]]$3,263[[/double-underline]] [[horizontal line across page]] [[underline]]Detail of All Other Funds Balances[[/underline]]: | | | | | Cooper-Hewitt: S.C. Johnson Exhibit | | $ 173 | $ 295 | $ 381 | $ 150 -Kress Foundation | | 64 | 92 | 92 | 92 -Purchase of Collections | | 249 | 249 | 252 | 250 MHT - AT&T Exhibit | | 199 | 1 | - | - -Marine Hall | | 239 | 279 | 185 | 166 NASM - Summa Corp. | | 754 | 730 | 695 | - Other Bureau Gifts/Act -NASM | | 621 | 374 | 164 | 85 -MHT | | 442 | 352 | 158 | 64 -MNH | | 182 | 181 | 59 | 19 -NCFA | | 100 | 109 | 65 | 54 -Zoo | | 414 | 370 | 246 | 126 Folklife Fest: Gen Foods/Am. Air. | | 5 | 364 | 465 | - Woodrow Wilsoon Center | | 333 | 454 | 298 - All Other | | [[underline]] 2,204[[/underline]] | [[underline]] 1,743[[/underline]] | [[underline]] 1,836[[/underline]] | [[underline]] 1,646[[/underline]] Total | | [[double-underline]]$5,979[[/double-underline]] | [[double-underline]]$5,493[[/double-underline]] | [[double-underline]]$4,896[[/double-underline]] | [[double-underline]]$2,652[[/double-underline]] [[/6-column table]]

-16- [[underline]]Proposed Increase in Endowment Funds[[/underline]] Mr. Webb, the Secretary, and the Treasurer made the following report. At the last Regents meeting it was suggested that the Institution should establish a goal of increasing substantially its unrestricted-purpose endowment funds--from the present $8,400,000 to perhaps $50 million or more over the next 10 years. It is essential to an understanding of this proposal that only the income is normally considered to be expendable, not the corpus of the endowment. Further information on this major subject is to be presented at this meeting. [[underline]]Background[[/underline]] - Smithsonian's total Trust Fund income prior to 1950 rarely exceeded $500,000 annually, including income for both restricted and unrestricted purposes. Federal appropriations, provided largely for the purpose of preserving, researching and exhibiting our national collections, regularly provided about 80% of total Institutional income--just as at the present time (see Table 1). Trust Fund income gradually increased thereafter, reaching $1 million for the first time in FY 1960 and over $3,000,000 in FY 1970. Beginning in 1956 the Institution also received increasing amounts of grants and contracts from Federal agencies to carry out scientific research projects; these reached a peak of nearly $16 million in 1967 with some decline thereafter.

-17- It is notable that throughout the period up to 1970 the [[underline]]unrestricted purpose[[/underline]] portion of Smithsonian Trust Funds was very small, as shown on Table 2. Up to 1950, for example, such funds averaged only around $100,000 per year. Even through FY 1971, unrestricted funds on a net basis (i.e., after deducting losses of various activities) rarely exceeded $400,000 per year. The portion of the administrative costs of the Institution borne by its Trust Funds, at that time equaling around $2,700,000 per year, were financed--as they are now--by charges ("overhead") against expenditures for our trust fund activities (i.e., research and other projects funded by restricted purpose endowment fund income, or by grants, contracts and gifts, plus auxiliary activities). The result of this low level of unrestricted-purpose income was that, despite austerity measures, the expansion of the Institution plus inflationary cost increases caused a series of five operating deficits in the years 1965-1971. These deficits eroded the balance of unrestricted Trust Funds from $3,226,000 previously accumulated to a totally inadequate operating level of $1,720,000. If continued this would have meant the drawing down of the very small unrestricted endowment funds, and eventually posing a threat to the basic independent nature of the Smithsonian itself.

-18- Since 1970, fortunately, there has been steady improvement as unrestricted-purpose income reflected rising revenues from concession fees, higher interest on current fund investments and a dramatic rise in earnings from auxiliary activities, particularly the National Associates Membership and the Magazine. Despite the near doubling of our administrative costs since 1970, it has been possible to rebuild our working fund balances and distribute meaningful amounts of money to Smithsonian Bureaus to take advantage of opportunities to improve their national collections or increase exhibition and research efforts in a modest way. More recently it was also possible to fund a portion of the Cooper-Hewitt renovation and the entire NMNH West Court construction, primarily an Associates public service project. Finally, in the past two fiscal periods a beginning was made toward bolstering our unrestricted-purpose endowment funds. [[underline]]Need for Increased Unrestricted-Purpose Endowment Funds[[/underline]] From this background we may draw the following conclusions: 1. Smithsonian has never, until the past two or three years, had any real protection in the way of surplus Trust Fund assets and income against the effect of inflation or other adverse

-19- financial developments. With the increased size of the Institution and seemingly continuous inflation causing commensurate increases in administrative costs, the Institution is even more vulnerable now than in the past to any unfavorable developments which might reverse our present satisfactory income position. The $8,400,000 unrestricted purpose endowment funds, for example, would by itself provide only about $375,000 of annual income--i.e., about 7% of our present administrative expense or about equal to the annual inflationary increase in such expense. 2. Present favorable annual surpluses are derived primarily from the [[underline]]Smithsonian[[/underline]] Magazine. Our ability to carry administrative costs is also heavily dependent on overhead charges levied against the Magazine, other auxiliary activities, and our current sizable volume of grants and contracts from Federal agencies and restricted-purpose gifts (See Table 2). While there is no immediate reason to foresee diminution of such support, these are, by their very nature, subject to change in public taste, political decision, and general economy. 3. In view of this vulnerability of the Institution's Trust Fund operations to possible adverse financial developments in the

-20- future, strong efforts should be continued and expanded in the way first contemplated by Secretary Walcott in 1927, to obtain and set aside endowment funds both for unrestricted purposes and also for specific projects especially for public services, thus achieving the essential purpose of this Institution for the increase and diffusion of knowledge. A goal of increasing endowments by at least $50,000,000 should be achievable over the next five to ten years by utilizing presently available operating surpluses and by calling upon assistance from our now established National Associates Board and others aware of and concerned with the fundamental educational and public purposes of this Institution. Resulting annual income of $2,500,000 or more from such increased funds would go a long way to assure strong trust fund stability in years to come. Mr. Webb stated that the Secretary was properly addressing himself to what the Smithsonian needs to make it a continuing success. He wanted to emphasize that the largest part of our fund balances are in restricted funds, such as for the Freer Gallery and other restricted activities, and that the unrestricted fund balances are quite small: $8.4 million at this time. This would not be enough to fall back on in an emergency for on-going activities. It therefore seemed clear to the Executive Committee that now that we have made a success of various auxiliary activities and there was a flow of cash, we should now look to increasing the amount of the endowment fund for our essential services to the public.

-21- The Secretary recalled a discussion on this very same subject which took place at the annual meeting of the Board of Regents in 1927 when the future of the Smithsonian was considered. Included at that meeting were members of the Establishment, the President, the Cabinet, as well as the Regents, leaders of industry and government, and the Secretary and his immediate staff. At that time it was planned that a society of Friends of the Institution could be developed. Unfortunately, Dr. Walcott, then Secretary of the Institution, who had initiated the suggestion, died two weeks before the plans could be set in motion. It was particularly sad to us today to reflect back on the fact that the original concept of the Institution had been that private funds could be utilized for innovation and research, and public funds for support of the buildings and the public uses through public education of the Institution. One can hardly hazard a guess as to what might have happened if an endowment drive had gotten underway during the halcyon days of the Twenties before the great depression. Many years later, upon his election as Secretary, Mr. Ripley was urged by Mr. John Nicholas Brown and Senator Saltonstall to develop a society of Friends of the Smithsonian and to try to build up increments of private funds which would in effect give us that appropriate balance between innovation, research and public service on the one hand, and maintenance and public education on the other.

-22- It is in this context that we greet the acceptance of the Associates idea with great enthusiasm. The Associates activities and publication, with their links across the country to the people, bring a new understanding of the purposes of the Institution. We feel it is appropriate that the Regents understand and endorse this because only so can we strive to do the very things that have made the Institution what it is. The Chancellor emphasized that considering our total activities one sees that the amount of yield from the present unrestricted endowment does not give much financing for initiating new enterprises and new activities in the public service area. In respect to the annual appropriation that comes from Congress, the timing does not give us the opportunity to plan with any amount of flexibility to assist in financing new research, whereas if these unrestricted funds were enlarged the kind of stimulus of research in the past that the Secretary has mentioned (i.e., Dr. Goddard's rocket studies) would be possible. In response to a question as to the funds generated by the [[underline]]Smithsonian[[/underline]] Magazine, it was stated that over $4 million would be produced this year and that earlier years showed net returns of between $1 and $2 million. The Chancellor recalled the earliest days of the inauguration of the [[underline]]Smithsonian[[/underline]], at a time when other notable magazines were going out of business, and the skepticism of most of the Regents on the venture, before they approved it. He accorded high praise to

-23- the Secretary for his confidence and foresight in the potential of a magazine such as the [[underline]]Smithsonian[[/underline]]. Senator Jackson inquired, in connection with long-range planning, what the target will be in building the unrestricted corpus in the trust. Mr. Ripley responded that the objective is to accumulate an unrestricted fund in the amount of $50,000,000 over the next ten years. Mr. Yates, in reviewing the appropriation figures, noticed a trebling of the appropriated funds over the past years and asked about future plans? Mr. Ripley explained that this increase is in large part due to inflation as well as the addition to the Smithsonian of new authorized museums which have necessitated essential custodial workers, protection services, as well as professional and sub-professional staff. In opening the National Air and Space Museum, for example, additional salaries comprised the major cost increase. The Hirshhorn Museum also increased the Institution's payroll substantially in a similar way. It was stated that approximately 75% of our monies are used for salaries. At the conclusion of the discussion the following motion was approved: VOTED, the Executive Committee recommends and the Regents express general approval that the Institution pursue the objective of increasing the endowment funds to a level of at least $50,000,000.

-24- Table 1 SMITHSONIAN INSTITUTION [[underline]]SOURCES OF OPERATING INCOME[[/underline]] ($1,000,000's) [[7-column table]] [[headers]] | [[span 3 columns]]Nonfederal Trust Funds[[/span 3 columns]] | | | Total | [[span 2 columns]][[underline]] Unrestricted [[/underline]][[/span 2 columns]] | [[underline]]Restricted[[/underline]] | Grants & | Federal | Operating | [[underline]] General [[/underline]] | [[underline]]Aux.Acts.(Net)[[/underline]] | [[underline]]& Spec.Purpose[[/underline]] | [[underline]] Contracts [[/underline]] | [[underline]]Appropriation[[/underline]]* | [[underline]] Income [[/underline]] | $ % | $ % | $ % | $ % | $ % | $ [[/headers]] 1930 | .1 5.6% | - - % | .4 22.2% | - - % | 1.3 72.2% | 1.8 1940 | .1 5.9 | - - | .3 17.6 | - - | 1.3 76.5 | 1.7 1945 | .1 5.0 | - - | .3 15.0 | - - | 1.6 80.0 | 2.0 1950 | .1 2.9 | - - | .5 14.3 | - - | 2.9 82.8 | 3.5 1954 | .2 4.3 | - - | .7 15.2 | .1 2.2 | 3.6 78.3 | 4.6 1960 | .2 1.4 | - - | .8 5.7 | 4.2 29.8 | 8.9 63.1 | 14.1 1965 | .4 1.3 | - - | 1.4 4.6 | 11.1 36.8 | 17.3 57.3 | 30.2 1966 | .5 1.4 | .1 .3 | 1.9 5.23 | 11.8 32.6 | 21.9 60.5 | 36.2 1967 | .9 2.0 | .1 .2 | 1.6 3.5 | 15.9 34.9 | 27.1 59.4 | 45.6 1968 | .5 1.2 | (.1) (.2) | 1.4 3.3 | 11.5 27.1 | 29.1 68.6 | 42.4 1969 | .8 1.7 | (.5) (1.1) | 2.9 6.3 | 11.5 24.9 | 31.5 68.2 | 46.2 1970 | .9 1.9 | (1.0) (2.1) | 3.4 7.1 | 9.8 20.3 | 35.1 72.8 | 48.2 1971 | .9 1.7 | (.5) (.9) | 3.2 6.1 | 9.3 17.8 | 39.4 75.3 | 52.3 1972 | .6 1.0 | (.1) (.2) | 4.1 6.6 | 7.8 12.5 | 49.8 80.1 | 62.2 1973 | .8 1.1 | .2 .3 | 5.4 7.5 | 9.0 12.5 | 56.7 78.6 | 72.1 1974 | 1.2 1.4 | 1.8 2.2 | 4.7 5.7 | 10.0 12.1 | 65.1 78.6 | 82.8 1975 | 1.2 1.2 | 2.3 2.4 | 7.3 7.5 | 12.3 12.6 | 74.5 76.3 | 97.6 1976 (15 mo.) | 2.7 1.9 | 4.5 3.2 | 9.2 6.6 | 15.5 11.2 | 107.2 77.1 | 139.1 1977 (Budg.) | 2.6 2.2 | 5.3 4.5 | 7.3 6.1 | 11.5 9.7 | 92.0 77.5 | 118.7 [[/7-column table]] * Includes SSIE and Foreign Currency Operations - Excludes Constructiona R&R.

-25- Table 2 [[underline]]UNRESTRICTED PURPOSE TRUST FUNDS[[/underline]] ($1,000's) [[13-column table]] [[headers]] | | | | | | | | | | [[span 2 columns]][[underline]]Balances-End of Yr.[[/underline]][[/span 2 columns]] | | | [[span 6 columns]][[underline]] Uses of Unrestricted Funds [[/underline]][[/span 6 columns]] | | Unrest. | Unrest. | [[span 3 columns]][[underline]] Income [[/underline]][[/span 3 columns]] | [[span 2 columns]][[underline]] Admin.Exp. [[/underline]][[/span 2 columns]] | Operating | [[span 3 columns]][[underline]] Transfers to [[/underline]][[/span 3 columns]] | Incr.(Decr.) | Curr. | Endow. FY | [[underline]]Gen'l[[/underline]] | [[underline]]Aux.Acts.[[/underline]] | [[underline]]Total[[/underline]] | [[underline]]Gross[[/underline]] | [[underline]]Net[[/underline]] | [[underline]]Allots.[[/underline]] | [[underline]]Bureaus[[/underline]] | [[underline]]Plant[[/underline]] | [[underline]] Endow.[[/underline]] | [[underline]]in Year[[/underline]] | [[underline]]Funds[[/underline]] | [[underline]] Funds[[/underline]] [[/headers]] 1966 | 512 | 75 | 587 | | | -679- | - | - | - | (92) | 3,163 | 4,859 1967 | 858 | 62 | 920 | | | -857- | - | - | - | 63 | 3,226 | 4,643 1968 | 478 | (60) | 418 | 2,286 | 210 | 190 | - | - | 148 | (130) | 3,096 | 4,979 1969 | 804 | (456) | 348 | 2,584 | 194 | 366 | - | - | 21 | (245) | 2,851 | 5,193 1970 | 881 | (1,041) | (160) | 2,782 | 347 | 453 | - | - | 21 | (981) | 1,870 | 5,099 1971 | 853 | (534) | 319 | 2,662 | 141 | 307 | - | - | 21 | (150) | 1,720 | 5,055 1972 | 557 | (141) | 416 | 2,714 | 75 | 259 | - | - | 21 | 61 | 1,781 | 5,347 1973 | 843 | 170 | 1,013 | 2,798 | 26 | 423 | - | - | 21 | 543 | 2,292 | 5,764 1974 | 1,179 | 1,770 | 2,949 | 3,295 | (50) | 899 | 70 | 1,134 | 121 | 775 | 3,477 | 5,519 1975 | 1,224 | 2,308 | 3,532 | 4,077 | 433 | 833 | 416 | 97 | 1,463 | 290 | 3,767 | 6,739 1976 15 mos.| 2,693 | 4,537 | 7,230 | 5,616 | (143) | 1,922 | 666 | 2,702 | 1,776 | 307 | 4,074 | 8,387 1977* Budg. | 2,634 | 5,300 | 7,934 | 5,158 | 300 | 2,263 | 557 | 114 | 4,700 | - | 4,074 | 13,087 [[/13-column table]] * Estimated

-26- [[underline]]Museum Support Center[[/underline]] The Secretary referred to his past invitations to a number of the Regents to visit the Museum of Natural History for a tour behind the scenes. Such a visit would acquaint the Regents with the everyday appearances of the Museum's research, conservation and storage facilities and would be indispensible to their understanding and support of our need for a museum support center. Mr. Ripley extended the invitation to our new Regents too and hoped that arrangements could be made for such a visit. This legislation has been discussed in the past in hearings before Senator Pell's Subcommittee and he has been supportive in his understanding about our needs for conservation. The Secretary asked Assistant Secretary Perrot to highlight and summarize where we are in this effort. On September 19, 1975, the President signed into law P.L. 94-98 authorizing the Regents of the Smithsonian Institution to prepare plans for museum support facilities. These facilities are intended to restore a significant amount of Mall building space to public use (more than 14% of exhibit space in one museum alone is now closed off for storage of collections purposes); to provide adequately for the long-range care and use of the Institution's collections; to provide associated research and study space; and to incorporate areas for conservation of the collections, related training, and the dissemination of conservation information.

-27- The Smithsonian's museum activities in the Washington area are concentrated around and near the Mall, an area dedicated by the use, education and enjoyment of the public. These activities, which encompass exhibits, education, collections, conservation, research and support, fully occupy and crowd available Mall space. Economies in the use of space are being pursued which entail the leasing of inexpensive, nearby space for office and workshop purposes and the examination and disposal of materials in various buildings to free up presently held space. Nevertheless, the continuation and expansion of direct public services and the necessary growth of collections require additional space in which to house the less visible services of collections management, conservation, documentation, research, and publication. Originally, we planned a much larger center, but the cost compelled us to scale down the initial phase of the ultimate project. The important action now required may be followed by succeeding phases as national policy permits. During the past eighteen months members of the Smithsonian staff and a consortium of consultants have carefully analyzed existing facilities and space requirements of the Institution, concentrating initially on the critical needs of the National Museum of Natural History. This assessment indicates that a project costing $21,500,000, with approximately 338,000 square feet of office, storage and laboratory space will meet the Institution's most pressing space needs as currently

-28- projected through the middle of the next decade. An amount of $325,000 is requested in the FY 1978 budget to initiate architectural and engineering planning for a Museum Support Center. The balance of the planning funds, estimated at $575,000, and construction and equipping funds, estimated at $20,600,000, will be sought by fiscal year 1980. Legislation authorizing construction should be introduced early in the 95th Congress. [[underline]]The Reason for Collections and Their Growth[[/underline]] Collections of original objects in the fields of science, history, and art are required for use in the identification of similar or related objects, research, education, and exhibitions or simply for aesthetic enjoyment and patriotic inspiration. Their importance spans such activities as the application of collection-based entomological research for the control of insects, the study of human disease in ancient anthropological materials, and historical understanding of technological and engineering developments, and the pleasure a viewer experiences in the presence of a master work of art. In these contexts nothing can take the place of the original object or specimen. Museums and museum collections must and should grow. Day-to-day history, the practice of the arts, and new technologies are relentless generators of objects to be preserved, exhibited, studied, and interpreted. Archaeologists discover, collect, and preserve the evidence of new knowledge of the past. Ethnologists

-29- collect at an accelerating pace in order to preserve the material record of rapidly changing cultures. In science there is a spiraling and intensifying need to collect, study and describe flora, fauna, rocks, and minerals of the earth in order to add to our understanding of the interlocking dependencies for survival. Collections are invaluable baseline records against which to measure and evaluate change. The Smithsonian has had 130 years of concern for collections, their need, and their use. It has consistently resisted the acquisition of collections it has considered unjustified or inappropriate. At the same time, the Institution has accepted its responsibilities to develop and preserve for use collections required for research and for the scientific, cultural, and technological record. [[underline]]Components of the Museum Support Center[[underline]] Collections storage is the fundamental purpose of the support center and reflects a high priority need to reclaim Mall exhibits space, attics, hallways, basements, and work spaces now encumbered with poorly and hazardously housed and often inaccessible specimens and objects. The proposed Museum Support Center building will provide a major amount of new storage space for the proper housing and care of collections. Included will be 187,000 square feet for the National Museum of Natural History, 28,000 for the National Museum of History and Technology, and 24,000 for other museums and galleries for a

-30- total of 239,000 square feet. This storage space will be provided by a utilitarian, single story, double-decked structure. The National Museum of Natural History tentatively has designated percentages of its departmental collections for transfer to the Center. Relocation of these collections will clear approximately 40,000 square feet of prime exhibits space, thus adding approximately 19 percent to the Museum's capability to present exhibits to its growing number of visitors, now over 4.5 million a year. Other benefits include the freeing of space on the Mall for education and research activities and better care of all collections. Second only to collection housing requirements is the need to provide a strong research and study program. This will be achieved by including in the proposed building approximately 31,000 square feet of offices and 28,000 square feet of laboratories for the professional and technical staff that will be associated directly with the collections. This space also will accommodate the Smithsonian Oceanographic Sorting Center, which would be moved from its present expensive rental quarters to achieve a more efficient relationship to program elements of the Museum of Natural History. A final principal component of this project proposal is an approximate 31,000 square feet of facility for conservation. Included in this first space increment for conservation will be a collections' receiving and fumigation unit, a conservation information referral center, space for the treatment of objects and research on conservation

-31- techniques, and a major facility for training staff and visiting interns in scientific theory and practical conservation skills. The provisions for necessary increased activity in conservation research and training, by bringing together the Department of Anthropology's processing and conservation laboratories with those of the Oceanographic Sorting Center and the Conservation Analytical Laboratory, will open new opportunities for Smithsonian conservators and trainees. We now have nine conservators and nine scientists concerned with this important curatorial responsibility. More conservators are needed. Some, no doubt, will be found in other training centers but many can be trained in-house. Scientists specializing in the study of materials and their behavior are increasingly in demand by museums and research organizations, and more must be added to the staff. Archaeometry, a new term describing the study of materials, their origins, methods of formation and the way they react with the environment, has only been carried out at the Smithsonian on an occasional basis. If we are going to fully understand historical and manufacturing processes, far more study must be made of the fundamental properties of materials from which our objects are made. Through these means we will be better able to preserve them and acquire new data on the evolution of past civilizations. Senator Pell stated that he had envisioned a large school for conservators in this facility with ability to accommodate 150 students earning degrees. Mr. Perrot explained that the resources to equip such a school would possibly be attainable over the next ten years.

-32- We would be pressing for what we considered to be the maximum possible with necessary regard for cost, building space, and the availability of prospective scholars within our financial limitations. The Secretary observed that the Natural History Museum of the Smithsonian is in the forefront of five leading natural history museums in this country. Paradoxically, our public visitations are about three times those of any other museum, but, at the same time, our public space for visitors is among the smallest (our exhibit area is about 40% of the largest in the nation). Our museum is considered as a standard for comparison with other museums. The essential character of possessing a series of objects rather than a random collection of specimens is the mark of distinction. As to cost, we can advise that preliminary estimates, without benefit of contract drawings, indicate that the depository areas will cost approximately $25.00 per square foot, and the much smaller but completely equipped laboratory areas will probably cost about $60.00 per square foot. [[underline]]Site Acquisition[[underline]] A site suitable for construction of support center facilities in which to house these services is being assembled adjacent to the Institution's current holdings of 21 acres at Silver Hill, Maryland. Sixty-one acres have been transferred to the Smithsonian in recent months by the General Services Administration, and negotiations are

-33- underway with respect to another twenty-one acre tract which would complete the assembly. [[underline]]Future Plans[[underline]] Studies on collections and their utilization will continue to assure effective collections policies and management and to provide the best analyses of growth projections and future space requirements. Over the past eight years the Board of Regents has repeatedly approved recommendations for construction and, most recently, at its meeting on January 22, 1976, requested its Congressional members to introduce and support necessary authorizing legislation. On February 6, 1976 Senator Scott introduced S. 2949 for this purpose, and on March 15 Mr. Mahon, for himself and Mr. Cederberg, introduced a companion measure, H.R. 12507, but no action was taken on either bill by the Congress. It was then moved and VOTED that the Board of Regents request its Congressional members to introduce and support legislation authorizing them to construct a museum support center.

-34- A BILL To amend Public Law 94-98 to authorize the Smithsonian Institution to construct museum support facilities. [[underline]]Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled[[underline]], That section 1 of Public Law 94-98 be amended by inserting after the phrase "to prepare plans for" the phrase "and to construct." Sec. 2. Section 3 of Public Law 94-98 is amended to read: "There are hereby authorized to be appropriated to the Smithsonian Institution $21.5 million to carry out the purposes of this Act."

-35- SMITHSONIAN INSTITUTION MUSEUM SUPPORT FACILITY [[image: photocopy of line map, roughly triangular in shape, with irregularly-shaped parcels marked A., B., C., G., F., D., and E.]] Existing Use and Jurisdiction | acres A. SI-NASM | 21 B. U.S. NAVY | 4 C. G.S.A. | 31 D. U.S. ARMY | 1 E. N.P.S. | 13 F. U.S. ARMY | 21 G. U.S. ARMY | 26 November, 1974 [[image: scale and north arrow]] RAYMOND, PARISH, PINE & PLAVNICK Urban Planning and Design Consultants Washington D.C. and Tarrytown New York

[[center]]-36-[[center]] [[underline]]Executive Session[[/underline]] The Chancellor asked that the Board in executive session consider a matter that had been discussed earlier but deferred until a larger body of Regents were in attendance. This procedure was followed and the results of their deliberations are contained in the following resolution unanimously adopted by the Board of Regents: [[center]][[underline]]RESOLUTION[[/underline]][[center]] WHEREAS, the Board of Regents is most appreciative of the outstanding leadership that Secretary Dillon Ripley has provided in bringing to fruition the valuable and enduring additions to programs of exhibition and research, including the appropriate events through which the Smithsonian Institution contributed so much to the Nation's Bicentennial Celebration; and whereas Secretary Ripley has contributed greatly to the objectives of the Smithsonian in developing in recent years such outstanding new museums as the Hirshhorn Museum and Sculpture Garden and the National Air and Space Museum; and whereas the Regents particularly recognize Secretary Ripley's strong, imaginative and effective leadership in establishing many new components of the current Smithsonian Institution which have added greatly to its service and value to the Nation, particularly through the Smithsonian Associates of the [[underline]]Smithsonian[[/underline]] Magazine,

[[center]]-37-[[center]] And WHEREAS, the Regents have considered the precedents adopted in the past by the Regents in providing research funds for previous Secretaries following their retirement from the Smithsonian, The Board of Regents RESOLVES to make it known to Secretary Ripley that they have this deep appreciation and also that they desire a continuing relationship after his retirement as Secretary to enable the Smithsonian to benefit further from his judgment, wide knowledge of museum management, and his vigorous approach to innovative solutions to museum problems and to accord him the traditional research support granted all its previous Secretaries. RESOLVED further that the Board of Regents urges Secretary Ripley to consider the possibility of remaining on as Secretary beyond the normal retirement age of 65 and assures him that this expression of the Regents' intent will be converted into a contract or agreement to implement the intent herein expressed at such time as he decides to relinquish his responsibilities as Secretary.

[[center]]-38-[[center]] [[underline]]Executive Level Salaries[[/underline]] The Executive Committee noted that the President had submitted his recommendations for Executive Level Salary increases to the Congress on January 17 for its consideration. Since approval of this proposal is anticipated within the next month, the Executive Committee requested, and was authorized, to act for the Regents to approve timely actions with respect to increasing Executive Level salaries of the Smithsonian. [[centered]]* * * * *[[/centered]] The meeting was then returned to full session. [[underline]]Smithsonian Tropical Research Institute Barro Colorado Island[[/underline]] Mr. Ripley reported that the Act of July 2, 1940 (54 Stat. 724), which set aside Barro Colorado Island in the Canal Zone in order to preserve and conserve its natural features for research purposes, authorized the appropriation of $10,000 for necessary administrative and maintenance expenses related to the Island. Subsequently, P.L. 89-280, approved October 20, 1965, amended the authorization to $350,000. At its meeting on January 22, 1976 the Board of Regents requested its Congressional members to introduce and support legislation eliminating the ceiling on appropriations. On February 6, 1976 Senator Scott introduced S. 2946 for this purpose, and on March 15, Mr. Mahon introduced, for himself and Mr. Cederberg, a companion measure, H.R. 12506. No action was taken in the House, but it was approved by the Senate on September 14 with an amendment raising the amount authorized to $600,000.

[[center]]-39-[[center]] Although current obligations are within the statutory limit, increasing costs and needed improvements indicate that the limit will be reached in the near future, and legislation similar to that approved by the Senate last year is proposed. It was then moved and VOTED that the Board of Regents requests its Congressional members to introduce and support legislation to amend the limit on appropriations authorized for Barro Colorado Island at the Smithsonian Tropical Research Institute.

[[center]]-40-[[/center]] [[center]]A BILL[[center]] To amend the Act of July 2, 1940, as amended, to increase the amount authorized to be appropriated. [[underline]]Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,[[/underline]] That section 7 of the Act of July 2, 1940 (20 U.S.C. 79e), as amended by Public Law 89-280, be further amended by striking out "$350,000," and inserting in lieu thereof "$600,000."

[[center]]-41-[[center]] [[underline]]Hirshhorn Film[[underline]] Mr. Ripley reported that two years ago the United States Information Agency produced a color film entitled "Hirshhorn Museum and Sculpture Garden." The film, which is of excellent quality, has been shown extensively in foreign countries and reports indicate that it has been enthusiastically received by viewing audiences. The law which established the United States Information Agency prohibits the distribution within the United States of materials the Agency produces. However, from time to time legislation has been enacted exempting specific works and titles from the prohibition. The Director of the Hirshhorn Museum and Sculpture Garden has requested that the Board of Regents consider and approve the introduction of legislation to exempt the Hirshhorn film and make it available for distribution in this country, by means of sale or rental, through the National Audio-Visual Center of the National Archives, and agency of the General Services Administration. A draft bill was prepared to accomplish this purpose and the following motion was approved. VOTED that the Board of Regents requests its Congressional members to introduce and support legislation to make the film "Hirshhorn Museum and Sculpture Garden" available within the United States.

[[center]]-42-[[center]] A BILL To make the film "Hirshhorn Museum and Sculpture Garden" produced by the United States Information Agency, available for use within the United States. [[underline]]Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,[[/underline]] That notwithstanding the second sentence of section 501 of the United States Information and Educational Exchange Act of 1948 (22 U.S.C. 1461), the Director of the United States Information Agency shall make available to the Administrator of General Services, for deposit in the National Archives of the United States, a master copy of the film "Hirshhorn Museum and Sculpture Garden," and the Administrator shall provide for the distribution of copies of the film for public viewing within the United States, by sale or rental.

[[center]]-43-[[center]] [[underline]]National Portrait Gallery[[underline]] The National Portrait Gallery Commission, at its meetings in 1976 approved the attached list of acquisitions for the National Portrait Gallery. At their last meeting on November 16, the members of the Commission unanimously recommended the appointment of Joe L. Allbritton to the Commission, succeeding Wilmarth Sheldon Lewis, who resigned on August 25. Mr. Allbritton's appointment, if approved by the Regents, would run until 1983. By adding him to the National Portrait Gallery Commission, it would be brought up to its full strength of ten members. A brief biography of Mr. Allbritton is attached. The following motion was approved: VOTED that the Board of Regents approves the actions recommended by the National Portrait Gallery Commission at its meetings on May 18, 1976, and November 16, 1976.

[[center]]-44-[[center]] Joe L. Allbritton (b. 1924), LLB., Baylor University, 1949; LL. D. (hon.) 1964; J.D., 1969. Chairman of the Board and Chief Executive Officer, Pierce National Life Insurance Company, 1958 - ; President and Chief Executive Officer, Houston Citizens Bank and Trust Company, 1970 - . Former Director, member of Executive Committee, and Vice Chairman of the Board, Baylor University. Present publisher, [[underline]]The Washington Star.[[underline]]

[[center]]-45-[[/center]] [[center]]NATIONAL PORTRAIT GALLERY ACQUISITIONS, 1976[[/center]] [[underline]]GIFTS[[/underline]] Samuel Adams, mezzotint, by Samuel Okey; gift of Mrs. Kathleen Louchheim and William S. Louchheim Edward M. Bannister, photograph, by Hurd; gift of Dr. and Mrs. Jacob Terner Joel Barlow, watercolor on ivory, by William Dunlap; gift of Joel Barlow Joel Barlow, engraving, by L.C. Ruotte after Le Barbier; gift of Joel Barlow Joel Barlow, drawing, by John Vanderlyn; gift of Joel Barlow Howard Chandler Christy, plaster bust, by Edgardo Simone; gift of Mrs. Hobart C. Ramsey Samuel Clemens, photograph, attributed to Alfred J. Meyer; gift of Mrs. Kathleen Louchheim Thomas Cole, daguerreotype, by unidentified photographer; gift of Mrs. Howard Silberstein Benjamin Franklin, plaster bust, after Jean-Antoine Houdon; gift of Joseph Hennage Harvey Firestone, bronze bust, by James Earle Frazer, gift of the Firestone Tire and Rubber Company Harvey Firestone, oil on canvas, by Elizabeth Shumatoff; gift of the Firestone Tire and Rubber Company Thomas Hicks, photograph, by unknown; gift of Dr. and Mrs. Jacob Terner Winslow Homer, E. L. Henry, A. C. Howland and an unidentified subject, photograph by unknown; gift of Dr. and Mrs. Jacob Terner Collis P. Huntington, oil on canvas, by William Keith; gift of A. Hyatt Mayor Daniel Huntington, photograph, by unknown; gift of Dr. and Mrs. Jacob Terner Ring Lardner, pencil on paper, by James Montgomery Flagg; gift of Ring Lardner, Jr. Abraham Lincoln, oil on canvas, by William Willard; gift of Mr. and Mrs. David A. Morse Jacques Lipschitz, oil on canvas, by Frederick Wight; gift of the artist James Russell Lowell, crayon on paper, by Samuel W. Rowse; gift of Susan Norton Rembrandt Peale, photograph, by Mathew Brady; gift of Dr. and Mrs. Jacob Terner Jacob Schiff, drypoint, by Hermann Struck; gift of John Schiff Winfield Scott, plaster bust, by unknown artist; gift of Marvin Sadik William T. Sherman, photograph, by Napoleon Sarony; anonymous gift Lloyd Logan Pearsall Smith, etching, by Edmond Kapp; gift of Richard Kenin Albert Sands Southworth, photograph, by unknown; anonymous gift Zachary Taylor, oil on canvas, attributed to James R. Lambdin; gift of Barry Bingham, Sr. Zachary Taylor and his Cabinet, lithograph, by Francis D'Avignon; gift of Barry Bingham, Sr. Lillian Wald, oil on canvas, by William V. Schevill; gift of Visiting Nurse Service of New York George Washington, mezzotint, by Charles Willson Peale; gift of the Barra Foundation Walt Whitman, seven photographs, by various photographers; gift of Mr. and Mrs. Charles Feinberg

[[center]]-46-[[/center]] NPG Acquisitions, 1976 [[underline]]TRANSFERS[[/underline]] John Burroughs, pastel on paper, by Walter Beck, transfer from the National Collection of Fine Arts; gift of Elizabeth A. Achelis Rutherford B. Hayes, plaster bust, by Olin Warner, transfer from the National Collection of Fine Arts; gift of Mrs. Carlyle Jones [[underline]]PURCHASES[[/underline]] Charles Francis Adams, photograph, by Mathew Brady Studio John Quincy Adams, engraving, by Thomas Gimbrede Samuel Adams, mezzotint, attributed to George Graham Samuel Adams, engraving, by John Norman James Agee, photograph, by Walker Evans Theodosia Burr Alston, oil on canvas, by unknown artist John A. Andrew, Parian ware, by J. McD. &S. Authors of the United States, engraving, by Alexander Hay Ritchie Phineas Taylor Barnum and family, photograph, by unknown Henry Ward Beecher, photograph, by Napoleon Sarony Nicholas Biddle, watercolor, by J. B. Longacre Van Wyck Brooks, pastel on paper, by John Butler Yeats William Cullen Bryant, photograph, by Napoleon Sarony Lewis Cass, sepia watercolor, by J. B. Longacre Mary Cassatt, watercolor on paper, self-portrait William Merritt Chase. photograph, by Edward Steichen (?) John Cheverus, oil on canvas, by unknown artist Theodore Dreiser, photograph, by Lotte Jacoby Isadora Duncan, photograph, by Arnold Genthe James Fisk, Jr., photograph, by unknown Benjamin Franklin, terra cotta, by Jean-Antoine Houdon Albert Gallatin, oil on cardboard, by Worthington Whittredge Ulysses S. and Mrs. Grant with Emperor of Japan, woodblock print, by Hiroshige III William Henry Harrison, lithograph, by Albert Newsam Bret Harte, photograph, by J. Gurney Edward Hopper, photograph, by Berenice Abbott Robert Irwin, photograph, by Imogen Cunningham Andrew Jackson, sepia watercolor, by J. B. Longacre Andrew Jackson, lithograph, by Albert Newsam "Stonewall" Jackson, lithograph, by Dominique Fabronius "Stonewall" Jackson, lithograph, by Anton Hohenstein Franz Kline, photograph, by Robert Frank Huddie Ledbetter, photograph by Berenice Abbott Robert E. Lee, oil on canvas, by E. C. Bruce Abraham Lincoln and his Cabinet, engraving by Alexander Hay Ritchie

[[center]]-47-[[/center]] NPG Acquisitions, 1976 [[underline]]PURCHASES[[/underline]] (cont'd) Edward Livingston, sepia watercolor, by J. B. Longacre Thomas MacDonough, engraving, by Thomas Gimbrede George McClellan, wash drawing, by F. O. C. Darley Edna St. Vincent Millay, photograph, by Berenice Abbott J. P. Morgan, photograph, by Edward Steichen S. F. B. Morse, photograph, by Napoleon Sarony New York State Legislature and Dirck Ten Broeck, engravings, attributed to Isaac Hutton Eugene O'Neill, photograph, by Carl Van Vechten Outacity, engraving, after Reynolds George Peabody, photograph, by Mathew Brady Studio Matthew G. Perry, lithograph, by Napoleon Sarony Jacob Riis, photograph, by Garber Gurdon Saltonstall, engraving, by Amos Doolittle Alfred Stieglitz, photograph, by Alvin Langdon Coburn Harriet Beecher Stowe, pastel on paper, by Dora Wheeler Keith Bayard Taylor, oil on canvas, by Thomas Hicks George Washington, mezzotint, by Valentine Green George Washington, engraving, by John Norman George Washington, pastel on paper, by James Sharples Anthony Wayne, engraving, by John Norman Daniel Webster, sepia watercolor, by J. B. Longacre Daniel Webster, daguerreotype, attributed to Southworth and Hawes Thurlow Weed and "Representative Journalists", lithograph, by Buek and Lindner Benjamin West, marble bust, by William Behnes John Winthrop, engraving, by Amos Doolittle Frank Lloyd Wright, photograph, by Berenice Abbott

[[center]]-48-[[center]] [[underline]]National Collection of Fine Arts[[/underline]] Attached is a summary by the Director of actions taken by the National Collection of Fine Arts Commission at the two meetings held in 1976 and a list of works of art accepted by the Commission. [[indent]]The following motion was approved. [[indent]]VOTED that the Board of Regents approves the actions recommended by the National Collection of Fine Arts at its meetings on May 4, 1976 and December 7, 1976.

[[center]]-49-[[center]] Report of the National Collection of Fine Arts Commission 1976 The following were elected as officers for 1977: [[indent]]George B. Tatum, Chairman [[indent]]Otto Wittmann, Vice Chairman [[indent]]S. Dillon Ripley, Secretary It was recommended that the following members be reappointed for another four year term: [[indent]]Mr. Thomas Buechner [[indent]]Mr. David Finley [[indent]]Mr. August Heckscher [[indent]]Mr. Thomas Howe [[indent]]Mrs. Jaquelin Hume [[indent]]Mr. Charles Sawyer [[indent]]Mrs. Otto Spaeth The following new member, appointed by the Board of Regents in January 1976, attended his first meeting: [[indent]]Mr. R. Philip Hanes, Jr. The following members resigned from the Commission or asked that their appointments not be renewed: [[indent]]Mr. Martin Friedman (1968 - ) [[indent]]Mr. Henry McIlhenny (1957 - ) [[indent]]Mr. Ogden Pleissner (1957 - ) It was recommended that the following be appointed by the Board of Regents to the NCFA Commission: [[indent]]Mrs. Hiram McKee, Indianapolis, Indiana (information attached)

-50- Lists of approved accessions for the calendar year 1976 are attached. There were no discussions.

-51- Mrs. Hiram W. McKee, born Margaret Denny, is a distinguished member of the civic and artistic community of Indianapolis, Indiana. Both her father and grandfather were mayors of the city and Mrs. McKee's late husband was prominent in the social, civic and financial interests of Indianapolis. Mrs. McKee is active in the support of the two chief cultural institutions of the city, the Indianapolis Museum of Art and the Indianapolis Symphony Orchestra. Mrs. McKee has indicated that she would enthusiastically accept her nomination to the NCFA Commission.

-53- COMMISSION MEETING Spring, 1976 [[underline]]PAINTINGS - GIFTS, continued[[/underline]] BOB THOMPSON | [[underline]]Two Figures[[/underline]], ca. 1957 3 1/8 x 5 7/8" | oil on wood | Gift of Zabriskie Gallery UNIDENTIFIED ARTIST | [[underline]]Rachel (Mrs. Davis) Bartholemew [[/underline]], ca. 1815 15 x 12 1/4" | oil on panel | Gift of Mrs. Allen Little UNIDENTIFIED ARTIST | [[underline]]Davis Bartholemew,[[/underline]] ca. 1815 15 x 11 3/4" | oil on panel | Gift of Mrs. Allen Little ELIHU VEDDER | [[underline]]Landscape [[underline]] sight approx. 3 x 4 7/8" | oil on paperboard | Bequest of Eleanor Savorgnan [[underline]]PAINTINGS - PURCHASES[[underline]] WILLIAM PAGE | [[underline]]Shakespeare Reading[[/underline]] 65 x 39" | oil on canvas | Museum Purchase (Parke-Bernet, New York) [[underline]]MINIATURES - GIFTS[[underline]] UNIDENTIFIED ARTIST | [[underline]]Portrait of a Man[[/underline]] (Judge Thomas Ewing?),ca. 1840 2 15/16 x 2 5/16" (oval) | w/c on ivory | Gift of Alexander Vernon Wasson [[underline]]MINIATURES - PURCHASES[[underline]] RICHARD MORRELL STAIGG | [[underline]]Mrs. Francis Schroeder[[/underline]] 7 1/2 x 5 1/2" | w/c on paper | Museum Purchase (Mrs. Belle Johnson) RICHARD MORRELL STAIGG [[underline]]Mrs. Francis Schroeder[[/underline]] 7 1/2 x 5 1/2" | w/c on paper | Museum Purchase (Mrs. Belle Johnson)

-54- COMMISSION MEETING Spring, 1976 [[underline]]SCULPTURE - GIFTS[[/underline]] [[4-column table]] CLARENCE SCHMIDT | 19 assemblages* average size, 36 x 24 x 3 | | Gift of William C. Lipke CLARENCE SCHMIDT | 19 documentary photomurals each 4 x 8 feet | | Gift of William C. Lipke [[/4-column table]] [[UNDERLINE]]SCULPTURE - PURCHASES[[/UNDERLINE]] [[4-column table]] DAVID HARE | *[[underline]]Woman Dressing[[/underline]], 1950 9 3/8 x 3 3/4 x 3" | fired clay and stone | Museum Purchase (David Hare) SEYMOUR LIPTON | *[[underline]]The Defender[[/underline]], 1962 | nickel-silver on monel metal | Museum Purchase (Marborough Gallery, Inc.) ERASTUS DOW PALMER | [[underline]]June,[[/underline]] 1864 H. 24 1/2" | marble | Museum Purchase (Webster, Inc.) GEORGE W, WHITE, JR. | [[underline]]Emancipation House[[/underline]], 1964 21 x 22 x 18" | painted construction | Museum Purchase (Fendrick Gallery) [[/4-column table]] [[UNDERLINE]]PHOTOGRAPHS - GIFTS[[/UNDERLINE]] [[4-column table]] LEWIS BALTZ | [[underline]]Claremont[[/underline]], 1973 | photograph | Gift of John Gossage LEWIS BALTZ | [[underline]]South Monte[[/underline]], 1973 | photograph | Gift of John Gossage LEWIS BALTZ | [[underline]]Berkley[[/underline]], 1973 | photograph | Gift of John Gossage LEWIS BALTZ | [[underline]]Houston, Texas[[/underline]], 1973 | photograph | Gift of John Gossage [[/4-column table]] * PRESENTED BY PHOTOGRAPH

-55- COMMISSION MEETING Spring, 1976 [[underline]]PHOTOGRAPHS - PURCHASES[[/underline]] MAN RAY | [[underline]]Electricite,[[/underline]] published 1931 | 10 rayogrammes printed in gravure | Museum Purchase (Graphics International, Ltd.)

-57- COMMISSION MEETING Spring, 1976 [[underline]]PRINTS AND DRAWINGS - GIFTS, continued[[/underline]] [[4-column table]] CLARK FAY - continued | [[underline]]Welcome Bar[[/underline]] | lithograph | Gift of Mrs. Nathaly Baum CLARK FAY - continued | [[underline]]14th Street, New York[[/underline]] | lithograph | Gift of Mrs. Nathaly Baum SAM GILLIAM | [[underline]]Wissahickon, 1975[[/underline]] 22 x 30" | serigraph } Gift of Brandywine Graphic Workshop JACOB KAINEN | [[underline]]Hot Spots,[[/underline]] 1973 | color lithograph | Gift of Jacob Kainen JACOB KAINEN | [[underline]]Standard Bearer[[/underline]], 1973 | color lithograph | Gift of Jacob Kainen JACOB KAINEN | [[underline]]Color Guard,[[/underline]] 1973 | color lithograph | Gift of Jacob Kainen JACOB KAINEN | [[underline]]Sheba,[[/underline]] 1974 | color lithograph | Gift of Jacob Kainen JACOB KAINEN | [[underline]]Flagman[[/underline]], 1974 | color lithograph | Gift of Jacob Kainen JACOB KAINEN | [[underline]]Hesperus[[/underline]], 1974 | color lithograph | Gift of Jacob Kainen JACOB KAINEN | [[underline]]Power Play[[/underline]] 1974 | color lithograph | Gift of Jacob Kainen JACOB KAINEN | [[underline]]Advance Man,[[/underline]] 1974 | color lithograph | Gift of Jacob Kainen CYNTHIA KNAPTON | [[underline]]Distilled Fire[[/underline]] II | intaglio | Gift of HMK Fine Arts DANIEL KOTZ | Untitled, 1888 | pencil drwg. | Bequest of Eleanor Savorgnan DANIEL KOTZ | Untitled | pastel | Bequest of Eleanor Savorgnan YASUO KENIYOSHI | (poster for 1931 Japanese Exhibition) | lithograph | Gift of Mrs. Nathaly Baum PIETRO LAZZARI | Untitled | engraving | Gift of Society of Washington Printmakers LOUIS LOZOWICK | [[underline]]Minneapolis,[[/underline]] 1925 11 11/16 x 8 15/16" | lithograph | Gift of Lee Lozowich in mem. of his father Louis Lozowick ETHEL MARS | [[underline]]Ducks [[/underline]] | woodcut | Gift of Virginia M. Zabriskie NICHOLAS MARSICANO | Untitled (reclining nude) | brush and ink drwg. | Gift of Mr. and Mrs. Jacob Kainen JOSEPH S. MURRAY | Untitled | pencil drwg. | Gift of Mrs. Paul S. Rupert JOSEPH S. MURRAY | Untitled | pencil drwg. | Gift of Mrs. Paul S. Rupert JOSEPH S. MURRAY | Untitled | pencil drwg. | Gift of Mrs. Paul S. Rupert THOMAS O'DONOHUE | [[underline]]The Tides[[/underline]] | intaglio | Gift of HMK Fine Arts

-60- COMMISSION MEETING Spring, 1976 [[underline]]PRINTS AND DRAWINGS - PURCHASES, continued[[/underline]] [[4-column table]] RUFINO TAMAYO | [[underline]]Man and Woman,[[/underline]] ca. 1930 | woodcut | Museum Purchase in memory of Allen Tucker (Jem Hom, Fine Arts) JOHN H. TWACHTMAN | [[underline]]Road Near Honfleur[[/underline]] | etching and drypoint | Museum Purchase (Jem Hom, Fine Arts) STOW WENGENROTH | [[underline]]Summer Dusk[[/underline]] | lithograph | Museum Purchase (Associated American Artists) STOW WENGENROTH | [[underline]]Aphelion [[/underline]] | lithograph | Museum Purchase (Associated American Artists)

-63- COMMISSION MEETING Winter, 1976 [[underline]]PAINTINGS - GIFTS, continued[[/underline]] [[4-column table]] CHARLES POLLOCK | (geometric abstract patterns) 1947 22 x 18" | oil | Gift (Mrs. Elizabeth Pollock) MAURICE PRENDERGAST | [[underline]]Summer, New England[[/underline]] 1912 19 x 27" | oil on canvas | Gift (Mrs. Eugenie Prendergast) ERIC RUDD | [[underline]] Left Bank-Dormer[[/underline]] 1969 60 5/8 x 78 3/4" | oil on canvas | Gift (Mr. and Mrs. Jacob Kainen) WAYNE THIEBAULD | [[underline]]Three Sandwiches[[/underline]] 1961 13 x 17" | oil on canvas | Gift (Woodward Foundation) ALMA THOMAS | [[underline]]Snoopy-Early Sun Display on Earth[[/underline]] 1970 50 x 48" | oil on canvas | Gift (Vincent Melzac) ALMA THOMAS | [[underline]]New Galaxy[[/underline]] 1970 54 x 54" | oil on canvas | Gift (Vincent Melzac) FRANK TOMLINSON | [[underline]]Returning Fisherman[[/underline]] 48 x 36 5/8" | oil on canvas | Gift (Mrs. Beulah Tomlinson) JOHN WISE | [[underline]]Torque [[/underline]] 1969 32 x 51" | acrylic on plexiglas | Gift (Woodward Foundation) [[/4-column table]] [[underline]]MINIATURES - PURCHASES[[/underline]] [[4-column table]] ALVAN CLARK | [[underline]]Samuel Hall Gregory[[/underline]] ca. 1840 4 1/2 x 3" | watercolor on paper | Museum Purchase (Gropper Art Gallery) JOHN WOOD DODGE | [[underline]]Portrait of Isaac F. Tyson[[/underline]] 2 5/8 x 2 1/8" | watercolor on ivory | Museum Purchase (Court Hous Shop) UNIDENTIFIED ARTIST | [[underline]]Portrait of Colonel Stephenson[[/underline]] 2 3/4 x 2 1/8" | watercolor on ivory | Museum Purchase (Major Gary L. Starkey)

-64- COMMISSION MEETING Winter, 1976 [[underline]]PAINTINGS - PURCHASES[[/underline]] [[4-column table]] ALFRED T. BRICHER | [[underline]]Castle Rock, Marblehead[[/underline]] 1878 26 x 50" | oil on canvas | Museum Purchase (Jeffry Brown) J. HERMANN CARMIENCKE | [[underline]]Hudson River at Cold Spring[[/underline]] 1861 12 x 10 1/2" | oil on canvas | Museum Purchase (Ira Spanierman,Inc.) RALSTON CRAWFORD | [[underline]]Buffalo Grain Elevators[[/underline]] 1937 40 x 50" | oil on canvas | Museum Purchase (Solway Galleries) THOMAS DOUGHTY | [[underline]]Landscape with Stream and Mountains[[/underline]] 1833 16 1/2 x 23 1/2" | oil on wood | Museum Purchase (Mrs. Helen D. Blackmer) CHARLES HUBBARD | [[underline]]Sea View of Cape Poge Lighthouse[[/underline]] 15 3/4 x 21 1/2" | oil on canvas | Museum Purchase (Frank Swartz, Inc.) PETER FREDERICK ROTHERMEL | [[underline]]Columbus Before the Queen[[/underline]] 1841 62 3/8 x 50" | oil on canvas | Museum Purchase (Webster Fine Art, Inc.) CHRISTIAN SCHUSSELE | [[underline]]Evangeline[[/underline]] 1861 38 1/4 x 32" | oil on canvas | Museum Purchase (Robert Schoelkopf Gallery) [[/4-column table]] [[underline]]PAINTINGS - TRANSFERS[[/underline]] [[4-column table]] KELLY FITZPATRICK | (Untitled landscape) 1934 30 x 35 7/8" | oil on fiberboard | Transfer from the White House through GSA VICTOR PERELLI | [[underline]]Fishing Station Long Island Sound [[/underline]] 1930's 20 1/8 x 24 3/4" | oil on canvas | Transfer from the White House through GSA [[/4-column table]]

-65- COMMISSION MEETING Winter, 1976 [[underline]]SCULPTURE - GIFTS[[/underline]] [[4-column table]] EMILY CLAYTON BISHOP | 16 sculptures, plaster, bronze and 1 terra cotta early 1900's | Gift (Marjorie D. Martinet and Beatrice Fenton) LEE BONTECOU | [[underline]]Cocoon I[[/underline]] (table size) | mixed media | Gift (Woodward Foundation) LEE BONTECOU | [[underline]]Cocoon II[[/underline]] (table size) | mixed media | Gift (Woodward Foundation) JOSÉ DE CREEFT | [[underline]]Nude in Wood[[/underline]] 16" H. | wood | Gift (Dr. James Rudel) CLAIR FALKENSTEIN | [[underline]]Floating Structure[[/underline]] 30 1/4 x 50 3/4 x 17 1/2" | brazed iron | Gift for Spring 1977 (Mrs. Susan Morse Hille HERBERT FERBER | [[underline]]Gray Sculpture[[/underline]] 1955 20 x 12 x 16" | copper and lead | Gift for Spring 1977 (Mrs. Susan Morse Hille CHAIM GROSS | [[underline]]Reflection[[/underline]] 1954 | polished bronze | Gift of Mr. and Mrs. Red Grooms DAVID HARE | [[underline]]Cloud and Rain[[/underline]], cloud: 10 1/4 x 20 1/2 x 19 5/8", rain: 49 3/4 x 11 3/4 x 3 1/2" | bronze and steel, welded and painted | Gift for Spring 1977 (Mrs. Susan Morse Hille DONALD JUDD | [[underline]]Table Object[[/underline]] (multiple) 2 3/4 x 24 x 20" | stainless steel | Gift (Woodward Foundation) GASTON LACHAISE | [[underline]]Belle Lachaise[[/underline]] 7 3/4 x 3 1/8 x 2 7/8" | plaster with paint | Gift (Tessim Zorach SEYMOUR LIPTON | [[underline]]Jungle Bloom II[[/underline]], 1953, 31 3/8 x 28 x 13 1/2" | bronze | Gift for Spring 1977 (Mrs. Susan Morse Hilles) [[/4-column table]]

-66- COMMISSION MEETING Winter, 1976 [[underline]]SCULPTURE - GIFTS, continued[[/underline]] [[4-column table]] REUBEN NAKIAN | (Dahlov Sitting with Crossed Legs), 10 5/8 x 7 7/8 x 7 7/8" | plaster | Gift (Tessim Zorach) REUBEN NAKIAN | (Dahlov Zorach), 8 x 16 3/4 x 7 7/8" | stone | Gift (Tessim Zorach) LOUISE NEVELSON | [[underline]]Night Leaves[[/underline]] (multiple), 1969, 12 3/4 x 12 3/4 x 2 1/4" | black plexiglass | Gift (Woodward Foundation) WILLIAM HENRY RHINEHART | [[underline]]Charles Oliver O'Donnell[[/underline]] | marble | Gift (Robert O'D. Werlich in memory of Gladys Hinckley Werlich SAM RICHARDSON | [[underline]]It's Darker in the Valley[[/underline]], 1969, 9 x 12 x 12" | plastic and wood | Gift (Wende andGeoffrey Gates) JOHN ROGERS | 20 sculptures | | Gift (Robert O'D. Werlich in memory of Gladys Hinckley Werlich BERNARD ROSENTHAL [[underline]]Rondo [[/underline]], 1965, 8 7/8 x 7 3/4 x 6 5/8" | bronze on marble base | Gift (Mrs. Susan Morse Hilles) VARIOUS NEW DEAL ARTISTS | Group of 1930's sculptures - a perliminary selection of 25 sculptures presented by photo) | Gift (Louise Cheskin) ANITA WECHSLER | (head of William Zorach), 21 1/8 x 9 x 11" | bronze | Gift (Tessim Zorach) MAHONRI YOUNG | [[underline]]The Knock-Down[[/underline]], 1928, 22 3/4 x 28 3/8" | bronze | Gift (Mahonri Sharp Young) MAHONRI YOUNG | [[underline]]Right to the Jaw[[/underline]], 14 x 20" | bronze | Gift (Mahonri Sharp Young) WILLIAM ZORACH | 41 sculptures | | Gift (Tessim Zorach) [[/4-column table]] [[underline]]SCULPTURE - PURCHASES[[/underline]] [[4-column table]] SAUL BAIZERMAN | [[underline]]Primavera[[/underline]], 1954 - 1955, 100 x 23 1/2 x 17" | hammered copper and steel | Museum Purchase (Zabriskie Gallery)

-67- 7. COMMISSION MEETING Winter, 1976 [[underline]]DECORATIVE ARTS - GIFTS[[/underline]] [[4-column table]] UNIDENTIFIED ARTIST | Persian Vase | | Gift of William E. Huntingto for the Barney Collection UNIDENTIFIED ARTIST | Chinese Vase | | Gift of William E. Huntingto for the Barney Collection UNIDENTIFIED ARTIST | Ceramic Tile | | Gift of William E. Huntingto for the Barney Collection UNIDENTIFIED ARTIST | Ceramic Tile | | Gift of William E. Huntingto for the Barney Collection UNIDENTIFIED ARTIST | French Bowl | | Gift of William E. Huntingto for the Barney Collection UNIDENTIFIED ARTIST | Reclining Buddah | | Gift of William E. Huntingto for the Barney Collection UNIDENTIFIED ARTIST | French Ceramic Bottle | | Gift of William E. Huntingto for the Barney Collection UNIDENTIFIED ARTIST | Glass Vase | | Gift of William E. Huntingto for the Barney Collection [[/4-column table]]

-76- COMMISSION MEETING Winter, 1976 [[underlined]]PRINTS AND DRAWINGS - GIFTS, continued [[/underlined]] [[4-column table]] CADY WELLS | [[underlined]] Interlunar Sea [[/underlined]] 1946 20 x 28" | watercolor | Gift of Mason B. Wells CADY WELLS | [[underlined]] The Defenses [[/underlined]] 1947 19 1/4 x 21 1/2" | watercolor | Gift of Mason B. Wells WILLIAM ZORACH | Group of drawings and sketches relating to sculptures | | Gift (Tessim Zorach) [[/4-column table]]

-78- COMMISSION MEETING Winter, 1976 [[underline]]PRINTS AND DRAWINGS, PURCHASE continued[[/underline]] [[4-column table]] MICHAEL KIRK | [[underline]]Doorway [[/underline]](from Suite)[[underline]]Doorways)[[/underline]] | etching and aquatint | Museum Purchase (The Meyers Gallery ) ALEXANDER ZERDIN KRUSE | Untitled | lithograph | Museum Purchase (Geo. C. Miller & Son, Inc.) ELLA FILLMORE LILLIE | [[underline]]Lupita, La Laravdera[[/underline]] | lithograph | Museum Purchase (Geo. C. Miller & Son, Inc.) JEROME MYERS | [[underline]]Old House on 29th St. East of 3rd Ave. N. Y.[[/underline]] | etching | Museum Purchase (June 1 Gallery) THOMAS NASON | [[underline]](Country Hill)[[/underline]] | wood engraving | Museum Purchase (Bethesda Art Gallery) THOMAS NASON | [[underline]]Haystacks [[/underline]] | wood engraving | Museum Purchase (Bethesda Art Gallery) MAN RAY | the portfolio [[underline]]Electricite[[/underline]] pub. 1931 | 10 photogravures after rayogrammes | Museum Purchase (Graphics International, Ltd.) RUDOLPH RUZICKA | [[underline]]The High Level Bridge, Cleveland[[/underline]] 1926 | color woodcut | Museum Purchase (June 1 Gallery) ELIZABETH SALTONSTALL | [[underline]]From the Sea[[/underline]] | lithograph | Museum Purchase (Geo. C. Miller & Son, Inc.) KATHERINE SCHMIDT | [[underline]]Man Reading Newspaper[[/underline]], 1935, 8 x 6" | ink drawing | Museum Purchase (Zabriskie Gallery) JOHN STORRS | [[underline]]Joan of Arc[[/underline]] | woodcut | Museum Purchase (Robert Schoelkopf Gallery) [[/4-column table]]

-79- COMMISSION MEETING Winter, 1976 [[underline]]PRINTS AND DRAWINGS - PURCHASES, continued [[/underline]] [[4-column table]] UNIDENTIFIED ARTIST | [[underline]]The Smithsonian Institution[[/underline]] pub. 1878 | wood engraving and typography | Museum Purchase (Schindler's Antique Shop) IDELLE WEBER | [[underline]]Vampirella -- E. 2nd St.[[/underline]] | watercolor | Museum Purchase (Hundred Acres) WILLIAM WOLFSON | Untitled | lithograph | Museum Purchase (Geo. C. Miller & Son, Inc.) [[/4-column table]] [[underline]]PRINTS AND DRAWINGS - PARTIAL GIFT, PARTIAL PURCHASE [[/underline]] [[4-column table]] JOSEPH JEFFERSON | Untitled | color monotype | Partial Gift, Partial Purchase (Reverend DeWolf Perry) [[/4-column table]]

-80- [[underline]] Hirshhorn Museum and Sculpture Garden [[/underline]] There follows a summary of the annual report of the Board of Trustees of the Hirshhorn Museum and Sculpture Garden to the Board of Regents of the Smithsonian Institution. The membership of the Board was changed by the following appointments and resignations: [[underline]]Dorothy Miller[[/underline]] was appointed to serve the remaining term of Taft B. Schreiber, who resigned. (Expiring June 30, 1978) [[underline]]Sidney Lewis [[/underline]]was appointed to serve the remaining term of George Hamilton, who resigned. (Expiring June 30, 1979) [[underline]]Theodore Cummings[[/underline]] resigned from the Board effective November 1976. A replacement is now under consideration. Approximately 1,350,000 people visited the Hirshhorn Museum between January and December of 1976. The three millionth visitor arrived on August 13, 1976. A total of 80 works of art was received by the Museum during 1976, of which 30 were gifts and 50 were purchases. A list of these works is attached. The following motion was approved: VOTED that the Board of Regents accepts the report of the Hirshhorn Museum and Sculpture Garden Board of Trustees.

-81- Dorothy Canning Miller -- Who's Who in American Art, 1973 -- Museum Curator; b. Hopedale, Mass.; Study and Training: Smith Col, BA, LHD, '59. Collections Arranged: Many exhibs, Mus Mod Art, 36-69. Positions: Asst to dir, Mus Mod Art, 34, assoc cur painting & sculpture, 35-43, cur painting & sculpture, 43-47, cur mus collections, 47-67, sr cur painting & sculpture, 67-69; art adv, var collectors, cols & corp, 69- . Publications: Ed, 12 Americans, 56, The new American painting, 58, 16 Americans, 59, Americans 1963 & 20th century art from the Nelson Aldrich Rockefeller Collection, 69; plus many others. Mailing Address: Museum of Modern Art, 11 W. 53rd St., New York, N.Y. 10019.

-82- Sydney Lewis -- Who's Who in America - 38th Edition, 1974-75. Retail co. exec.; b. Richmond, Va., Oct. 24, 1919; s. Julius Beryl and Dora (Lewis) L.; B.A., Washington and Lee U., 1940, postgrad. in law, 1940-42; postgrad. bus. adminstrn., Harvard, 1942-43, in law, George Washington U., 1946; m. Frances Aaronson, Sept. 3, 1942; children--Sydney, Jr., Andrew Marc, Susan (Mrs. Dixon Butler). Admitted to Va. bar, 1942, 1947; v.p. New Standard Pub. Co. Inc., Richmond, 1947-58, pres., 1958-, also dir.; founding pres. Best Products Co., Inc., Richmond, 1951-, also dir., Pres. Richmond Jewish Community Council, 1953-. Trustee Washington and Lee U., Lexington, Va., Va. Union Univ., Richmond; mem. bd. assos. U. Richmond, Club: Lakeside Country. Home: 2601 Monument Ave., Richmond, Va. 23220; Office: P.O. Box 26303, Richmond, Va. 23260.

-87- [[underline]]Policy on Public Disclosure of Internal Audits[[/underline]] Since 1970, the Smithsonian's Office of Audits has been performing internal audits of virtually all Institution programs. Each audit consists of an independent investigation; a draft report of facts, criticisms, and recommendations; written responses and, often, a lively debate between auditors and auditees; and a revised final report, advisory in nature, to management. The process is intentionally adversary in nature, but it consistently succeeds in improving operations because of a willingness to admit error on both sides and, more importantly, because it is an entirely internal procedure whose confidentiality is respected by all parties. Recently, and for the first time, there has been a request from a member of the public for copies of fifteen Smithsonian internal audit reports, citing the Freedom of Information laws. The initial response to this request stated: "A substantial number of those concerned with the integrity and independence of internal audits believe that the public interest in the effectiveness of internal self-criticism outweighs the interest in public disclosure, and that the fifth exemption to the Freedom of Information Act, relating to inter-agency memoranda, should apply since the purpose of this exemption is to encourage candid communications in order to arrive at better decision-making than would occur if personnel were inhibited in expressing their honest opinions and recommendations for fear of outside criticism or pressures. A recent court decision supports this view, but further study and consultation is necessary, not only with regard to this primary and comprehensive question but also to consider the application of the other FOIA exemptions in detail to the numerous documents requested."

-88- Although not required by law, it has been the consistent policy of the Institution to use the principles of the Freedom of Information Act as a guide in responding to public requests for documents, and there has been no occasion in the past nine years to depart from this practice. Various authorities of the Government, including the Department of Justice, are agreed that the fifth exemption in the Act applies to internal audit reports, but some have attempted to separate "factual" as distinguished from "decisional" material in such reports in order to release the former. After studying the specific Smithsonian reports requested, the Director of the Smithsonian's Office of Audits and the General Counsel have concluded that they cannot undertake to determine releasable portions of reports, or indeed of any part of the internal audit process, with any assurance that such action will not be as damaging to internal audit procedures as the release of the reports in their entirety. The Board of Regents approved the following resolution to preserve the integrity and independence of the Smithsonian's internal audits: VOTED that the policy of assuring and maintaining the confidentiality of the Institution's internal audit procedures and reports is essential to the effectiveness of the audit process for the improvements of operations and is approved.

-89- [[underlined]] Museum of African Art [[/underlined]] Dr. Haskins reviewed the background of the Museum of African Art and recalled that at the May 10, 1976 meeting of the Board the Chancellor brought to their attention a letter with attachments from Warren Robbins, Director of the Museum of African Art, in which he proposed acquisition of the Museum by the Smithsonian. That proposal has received endorsement by a large number of Senators and Representatives. In our ensuing discussions, it was concluded that further study of the proposal was needed, and the Chancellor appointed a committee consisting of Senator Moss, Congressman Yates, Judge Higginbotham and Dr. Haskins to study the matter. During the summer, Mr. Blitzer and Mr. Powers accumulated additional data, and the committee has kept in touch. The committee held its first meeting in December, attended by Messrs. Yates, Haskins, Blitzer and Powers. Two interim conclusions were reached: (1) That in view of the new Administration and the loss of Senator Moss from the committee we should not make any definitive recommendations at the meeting. But they did discuss general guidelines for any negotiation of this kind that: (a) Appropriate congressional approvals, whether in the form of authorizing legislation or otherwise be secured; (b) assumption of responsibility by the Smithsonian be made contingent upon receipt of adequate appropriations;

-90- (c) the policies and administration of the Museum be under the Regents and the Secretary directly, with an advisory board representing the present trustees of the African Museum; and (d) that the Regents and the Secretary be free in the future to make whatever use they deem appropriate of the collections, real estate and other assets of the Museum. (2) The committee plans to make a detailed report and recommendations to the Board at the spring meeting. Senator Pell mentioned that as chairman of the Subcommittee on the Smithsonian Institution, he had spoken at great length with Warren Robbins on this, and the Senator's own view is that the buildings should not be taken over by the Smithsonian because they are not suitable for a museum, but on the other hand, we should have the collections and perhaps place them in some other Smithsonian building. Judge Higginbotham stressed the significance of the Frederick Douglass House as a part of the Museum and the historical aspects of the property. It was concluded that this matter will continue to be explored.

-91- [[underlined]] National Armed Forces Museum Advisory Board [[/underlined]] Mr. Brown reported the following new appointments to the National Armed Forces Museum Advisory Board announced by President Ford on January 11, 1977: -- Mr. William Isaac Greener, Jr., of Springfield, Virginia Occupation: Consultant to President Ford -- Mr. James Madison Stone, Sr., of Brigham City, Utah Occupation: Group Vice President for Government Systems, Thiokol Corporation, Brigham City, Utah A reappointment announced by President Ford on January 11, 1977 was: -- Mr. William H. Perkins, Jr., of Chicago, Illinois Occupation: Legislative Representative for Continental American Insurance Group Mr. Brown said that the National Armed Forces Museum Advisory Board continues to take special interest in the development of the Dwight D. Eisenhower Institute for Historical Research, authorized in the same legislation that brought the Board into being. Established in the National Museum of History and Technology in 1975, the Eisenhower Institute has made excellent progress under its distinguished Director, Dr. Forrest C. Pogue.

-92- [[underlined]] Mall Parking Facilities [[/underlined]] The shortage of convenient parking spaces is a serious restriction on visitor access to our buildings. A recent study conducted in August-September 1976 shows --The majority of visitors come by car (57%). --One-third of the visitors felt that the elimination of parking on the Mall was a definite inconvenience to them personally. --About half of the suburbanites (52%) and 30% of the out-of-town visitors worried about coming to the city because they had heard that parking near the Mall was impossible to find. --About a third of the visitors had to park more than six blocks away from the museum they wanted to visit. While this study gives some insight into visitor concern for parking, it could not include those potential visitors who simply stayed away rather than try to cope with the parking problem. Visitor attendance continues to climb while at the same time a number of reductions in available parking spaces have occurred. The planned parking (900 spaces) at the National Visitor Center (Union Station) has been deferred, parking has been eliminated on Adams and Washington Drives (a reduction of 700 spaces) and parking was banned on Independence and Constitution Avenues during the 1976 peak season for a further loss of 350 spaces. A fringe parking lot shuttle bus system operating from RFK Stadium and the Pentagon North Lot was intended to serve the Bicentennial crowds. This system, costing some $7-1/2 million in Federal funds, failed to live up to the expectations of the planners

-93- and was terminated prematurely due to the lack of riders and the high cost of operation. A study completed in 1971 by consultants Wilbur Smith and Associates recommended the construction of underground parking garages beneath the Mall. The Board of Regents, at the meeting on January 22, 1976, voted to have this 1971 study reviewed and updated. At its May 10, 1976 meeting, the Board of Regents directed the Secretary to continue planning for such parking garages and to advise the Regents on the necessary actions to be taken. The matter was discussed briefly at the October 1, 1976 meeting of the Board of Regents where it was reported that copies of the Wilbur Smith and Associates feasibility analysis study had been received and sent to the Department of the Interior, National Capital Planning Commission, Office of Management and Budget, and the National Gallery of Art in order to inform those agencies of the Institution's interests. Based on information provided by the Smithsonian, the National Capital Planning Commission staff has included the project in its FY 1978-1983 Federal Capital Improvements Program for the National Capital Region, and stated "planning, design, and construction funds should be programmed in the next six years." This project concept will be reviewed at the Commission's meeting on February 3, 1977, and it is expected to receive approval, subject to subsequent Commission review of specific details. Responses from other agencies have been less conclusive.

-94- The Wilbur Smith and Associates report presented a parking development program designed to provide staged construction of 3,200 parking spaces beneath the center treeless panels of the Mall. The first stage of development proposed a 1,400 space facility between 12th and 14th Streets estimated to cost $10,870,000 in Federal funds, or $12,940,000 if privately financed, the difference in cost of $2,070,000 representing capitalized interest at 8% for the two-year construction period. The analysis of the anticipated revenue and expenses indicated that a private development would generate an annual deficit of $506,500 for the 25-year period. This forecast of a large annual deficit appeared to preclude further consideration of private financing at that time. However, downward trends in interest rates, coupled with a decline in construction activities, presented an opportunity to reconsider private financing of the project. Recent discussions with Wilbur Smith and Associates affirmed their continued interest in the parking project and generated an informal proposal to perform the design work, acquire private financing of the project, and arrange for and supervise the construction on a "turn-key" basis. It is the company's opinion, in the light of current financial and construction trends, that the anticipated revenue from parking fees could pay the operating costs and amortize the loan in an approximate 35-year period. Their very preliminary discussions with potential lenders and construction contractors generated expressions of interest in participating in this project.

-95- Experience and past studies clearly establish the need for convenient visitor parking and the two feasibility studies recommend the early development of underground facilities. The "turn-key" concept of private development offers an opportunity to shorten the design and construction time and to make the facility operational in 18 to 24 months with potential savings in cost by close supervision of the Architect/Engineer Developer. A project prospectus is being developed which will be useful in informing and attempting to gain the support of Federal and District of Columbia agencies for this project. Ideally, the Department of the Interior would adopt a leadership role in this project. The Regents will be kept informed on the progress in this matter.

-96- [[underlined]]Cooper-Hewitt Museum [[/underlined]] During its first three months over 83,000 visitors have viewed the inaugural exhibition, "Man Transforms", at the Cooper-Hewitt Museum. Press reaction to the innovative show, which was designed by Hans Hollein of Austria, has been largely favorable and is no doubt one of the factors behind the very encouraging attendance figures. The opening exhibition will be followed by a showing of objects from The Royal Pavilion at Brighton, some of which are from the Museum's own collection and others to be borrowed from Buckingham Palace and the Royal Pavilion. The opening of this exhibition during Queen Elizabeth's Silver Jubilee year will be an important event for the Museum, and fund raising efforts in support of the exhibition are actively under way. Subsequent exhibit plans include "Selections from the Permanent Collection" and "200 Years of American Architecture." Classes, lectures, tours, craft workshops and other membership activities are also proceeding apace. Over 2,350 residents of the New York City area have enrolled as Cooper-Hewitt members, in membership categories ranging from student ($15) to corporate ($1000). Some $84,000 in income which will help support the Museum's programs has already been derived from this source.

-97- [[underlined]] Museum of the American Indian, New York City [[/underlined]] An interim report on the Museum of the American Indian (Heye Foundation) in New York City was sent to the Regents on October 28, 1976. As of January 17, 1977, the Smithsonian has not been apprised of any further action in this matter. For your information, a copy of the interim report is attached.

-98- [[underlined]]Museum of the American Indian New York City[[/underlined]] At the January 22, 1976 meeting of the Board of Regents the Vice President raised the matter of the very large and valuable collection of American Indian art at the Museum of The American Indian (Heye Foundation) in New York City, and the possibility that the collection could be acquired by the Smithsonian Institution and housed in a new building on the last site on the Mall. As this possibility would be dependent upon many factors, it was VOTED that the Secretary is authorized to explore the status of the New York collection, evaluate it and advise the Regents of any viable options; and insure that the Regents and the Institution are sensitive to including in our diverse spectrum the role of the American Indian. The Museum of The American Indian collection is the largest and most important collection of New World archeological and ethnological material in the world. It is well-balanced, with a representative sampling of all areas of North America forming the bulk of its material, and includes a large quantity of Mexican, Central and South American specimens. It is probably surpassed in strength only by the National Museum in Ottawa, which in the last ten years has actively acquired extensive additions to its collections through considerable expense. From 1910 to 1930 its specimens were collected by Heye-supported field work done by professionals who met the standards of the time and were augmented by early ethnological material purchased by Heye in Great Britain until the 1930's. This latter material, often documented only by the notation "Purchased in Great

-99- Britain," would require in-depth research for complete documentation. Following 1930, due to financial considerations, the collection was expanded largely through gifts rather than Heye-supported field work. Following the Regents' meeting the Smithsonian staff began explorations of the New York situation and has continued to keep in close touch with various officials during the ensuing months. It should be noted that two of the Smithsonian staff, Dr. John Ewers and Dr. William Sturtevant, serve on the Museum's Board and have continuously been in touch with developments there. In February of this year Mr. Yates, accompanied by Mr. Blitzer, visited the Museum and the surrounding Audubon Terrace area and met at length with Alexander Draper, the Administrator of the Museum. In addition, Messrs. Yates and Blitzer visited the Museum's study and storage facility located in the Bronx. Among the things the staff has learned over this period are the following: (1) The Attorney General of New York, who has been supervising the actions of the Heye Foundation Board since its Chairman and several other members were removed following allegations of mismanagement, has set a deadline of September 1977 for completion of a comprehensive inventory of the collection. This will be the first such review since the Museum's establishment in the 1930's.

-100- (2) Although many of the Museum's staff and some of the remaining Board members are in favor of some sort of relationship with the Smithsonian Institution, all are opposed to moving the collection from New York City if it can be avoided. (3) Without significant supplementary income, however, it is unlikely that the collection in its current home can be appropriately utilized for public display and study. (4) Mr. William Dietel of the Rockefeller Brothers Fund has been discussing at our request with the Attorney General the question of whether the collection, under the terms of the Heye Trust, could legally be moved from New York City. (5) The New York Community Trust and the Rockefeller Foundation have offered to support the Museum in setting up a task force to develop a long-term plan for the future of the collection. Mr. Sidney Whelan of the Community Trust asked our advice on the selection of an Executive Director of the Task Force and on ways the eventual report might be organized. That advice was provided and gratefully received. To summarize, then, the current situation finds the Museum collection undergoing detailed and exhaustive examination with any

-101- action by the Attorney General of New York regarding determinations as to the possibility of moving the collection from New York awaiting completion of that inventory. Simultaneously, a professional task force is being formed at the Museum to study and recommend future courses of action. We will continue to follow the progress of these parallel efforts with great interest and will take every appropriate opportunity to reiterate our willingness to be of assistance and to explore the chances for eventual acquisition of the collection. As to our concern for proper attention to the history and culture of North American Indians in other programs, the following comments regarding current activities in the National Museum of Natural History's Anthropology Department and in the Center for the Study of Man may be of interest. The major program of the Center for the Study of Man (CSM) since 1971 has been a twenty-volume encyclopedia, [[underlined]] Handbook of North American Indians [[/underlined]]. This work will summarize what is known of all Indian groups north of Mexico and will replace the previous two-volume encyclopedia which was issued by the Smithsonian in 1907-1910. Several volumes are expected to be out by the end of this year. When completed, the [[underlined]] Handbook [[/underlined]] will become the standard reference work on all aspects of North American Indian history and anthropology. Another program in the CSM provides small grants to North American Indian communities. Many of the requests for these grants

-102- come from scholars who have been asked by Indian groups to help them salvage the language and history of their people before the last speakers of the language die and the traditional culture of their people is lost. The National Anthropological Archives under the Department of Anthropology developed in 1973 an American Indian Cultural Resources Training Program, supported also by external grants. The Program is designed to interest Indian Americans in becoming archivists and historians and to instill in them a desire to learn more about their heritage and to share this knowledge with all Americans by publishing and preserving the surviving records of their past. In addition to the above specific programs, the Smithsonian encourages the use of its collections, facilities and other resources by all qualified Indian researchers and scholars. Advisory services and counseling are available in all areas of Smithsonian expertise, and upon request selected information in the form of books, bibliographies and articles is distributed to individuals, schools, and Indian communities.

-103- [[underline]]Smithsonian Popular Book Publishing Task Force[[/underline]] Since its inception last September, the Institution's Popular Book Publishing Task Force (with a staff of three and consultants) has explored various avenues to popular book publishing for the Smithsonian. The task Force has mailed questionnaires to sample the reading habits and preferences of the National Associates, the prime market for Smithsonian books. Results should be tabulated by mid-February. The Task Force has envisioned three different publishing projects which would require distinctly tailored marketing techniques. A series of low-priced paperback children's books, based on Smithsonian subjects, has been planned editorially and designed. The Task Force is also preparing materials for a test mailing on a large format, highly illustrated volume tentatively titled [[underline]]Here at the Smithsonian.[[/underline]] In addition the Task Force has initiated editorial planning and design of the first of six large volumes which could come out serially, comprising [[underline]]The Smithsonian Library of America Design.[[/underline]] For each publication the main market would be through mail order, though the book store market, especially in the Smithsonian Museum shops, would enhance sales significantly. Financial projections, outlines, sample chapters, dummies and

-104- marketing plans will be incorporated in a report to the Secretary by March 1. It should be emphasized that the Institution is by no means committed to a program of popular book publishing; rather , this study aims primarily to determine whether the Smithsonian should engage in such publishing and with what techniques.

-105- [[underlined]] STATUS REPORT ON MAJOR CONSTRUCTION [[/underlined]] [[underlined]] South Garden [[/underlined]] The Victorian Garden was completed and opened to the public for the Bicentennial as the initial phase of the Smithsonian's South Yard development program. Preliminary studies are underway for developing this site between the original Smithsonian Building and Independence Avenue for additional productive uses. [[underlined]] Cooper-Hewitt Museum - New York City [[/underlined]] Major restoration of the 74-year old Carnegie mansion was completed in time for the public opening of the Cooper-Hewitt Museum on October 7, 1976. Most of the exhibit space has now been finished, with certain exterior repairs to the mansion remaining. [[underlined]] West Court Facility - Natural History Building [[/underlined]] The construction improvement project in the West Court of the Natural History Building was successfully completed as a public service activity during 1976. Associates and staff dining facilities opened in June 1976, and a new Museum Shop opened shortly thereafter. [[underlined]] Arts and Industries Building Restoration [[/underlined]] Interior restoration that included a new central heating and air conditioning system, major exhibit hall restoration, and new entrances and exits, was completed in time for the public opening of a major Bicentennial exhibition, "1876: A Centennial Exhibition", on May 10, 1976. Work to be completed in the next several years includes roof replacement, exterior repairs to windows and sashes, masonry repairs and waterproofing.

-106- [[underlined]] National Zoological Park [[/underlined]] The award winning William Mann lion and tiger exhibit was completed and opened to the public in April 1976. At the same time the newly renovated elephant house yards and bird house plaza were finished and opened for public use. Currently under construction is the new education and administration building located near the Connecticut Avenue entrance to the Zoo. This building will be completed by the first of March (although occupancy will occur earlier). It will contain a 300-seat auditorium for the public and three classrooms for school and public uses. Also under construction are the new bear exhibits consisting of one new facility for grizzly bears, the second new facility for polar bears and renovations of existing bear exhibits. These will be completed in the spring of this year. The necropsy facility to accommodate pathological and autopsy work on large mammals is under construction, to be finished in April of this year. The third major project is the general services and parking facility which will provide new housing for the commissary, maintenance shops and other Zoo service activities, and parking for 200 cars on its roof. This structure is scheduled to be completed in the fall of 1977. A construction contract has been awarded this month for Beaver Valley to accommodate beavers, otters, seals, sea lions and timber wolves. This project is being done on the fast-track method with construction started while design is continuing. Beaver Valley is estimated to be completed in early 1978. Currently in design are new facilities for the central area to provide for the great apes, monkey island, and renovation of the existing small mammal and reptile houses.

-107- [[underlined]] Study Center and Library Addition to the National Museum of History and Technology [[/underlined]] Planning is nearing completion for the construction of a sixth floor addition to the National Museum of History and Technology Building. This is required to provide necessary additional space for the museum's library and for the collections of archival material and graphic Americana. The new facility will accommodate the museum's present library, now widely scattered within the museum and inaccessible storage space. It will provide special study and conference facilities for visiting scholars, students, staff, and the public. It is required to permit this museum to fulfill its most fundamental mission--making its collections accessible for use in the service of history. A construction appropriation request in the amount of $7,100,000 is in the FY 1978 budget to Congress.

-108- [[underlined]] EQUAL EMPLOYMENT OPPORTUNITY PROGRESS REPORT [[/underlined]] The following information is provided as an update to the report on equal employment opportunity presented to the Regents at the January 1976 meeting. Overall permanent employment at the Institution increased from 3584 employees at the time of the August 1975 report to the Regents to 3855 employees as of October 1976. Although minority employment increased from 1252 to 1282 during this period, the ratio of minorities to non-minorities decreased. The most significant increase in minority employment occurred at grade levels 5 through 8, in part a result of upward mobility emphasis at these levels. Present incumbents at these grades will be a potential source of candidates for higher grades. Minority employment in grade levels 13 through 15 increased from 25 to 27; this increase, which occurred despite a decrease in overall employment at these levels, may be attributed to increased affirmative recruitment efforts. A decrease in minority employment from the 1975 figure occurred at grade levels 9 through 12, where minority employment fell from 150 to 140, even though overall employment increased at these levels. Judge Higginbotham found this record to be unexplainable and urged that the Institution take affirmative action to increase opportunities for minorities. The following chart compares April 1975 with October 1976 employment statistics.

-109- [[9-column table]] [[headers]] | [[underline]]Total[[/underline]] | [[underline]]Minority[[/underline]] | [[underline]]Negro[[/underline]] | [[underline]]Spanish[[/underline]] | [[underline]]Indian[[/underline]] | [[underline]]Oriental[[/underline]] | [[underline]]Other[[/underline]] | [[underline]]Women[[/underline]] [[/headers]] | | | | | | | | [[underline]]April 1975[[/underline]] | *3584 | 1252 | 1143 | 62 | 6 | 41 | 2332 | 1258 Grades 5-8 | 951 | 323 | 291 | 17 | 4 | 11 | 628 | 557 Grades 9-12 | 852 | 150 | 120 | 11 | 2 | 17 | 702 | 298 Grades 13-15 | 491 | 25 | 15 | 5 | | 5 | 466 | 66 | | | | | | | | [[underline]]October 1976[[/underline]] | *3855 | 1382 | 1273 | 61 | 7 | 41 | 2473 | 1328 Grades 5-8 | 973 | 363 | 341 | 8 | 3 | 11 | 610 | 568 Grades 9-12 | 891 | 140 | 118 | 6 | 3 | 13 | 751 | 321 Grades 13-15 | 479 | 27 | 16 | 3 | 1 | 7 | 452 | 65 [[/9-column table]] *Totals on this line include white and blue collar, all grades; other totals are white collar only. Although the total number of women in the workforce increased, as a percentage of the total, women suffered a decrease from 35.1% in 1975 to 34.5% in 1976. As pointed out in the January 1976 report to the Regents, all positions are being advertised, except those for which regulations do not require advertising, such as attorneys. Where advertising would be unreasonable for a contract or grant position, the Personnel Office will accept a statement from the principal investigator certifying public recruitment in lieu of published advertisement. The Smithsonian's Upward Mobility Program has been expanded since our 1975 report to the Regents. Eighteen employees initially entered into formal training, four of whom graduated as journeymen technicians. Eight new positions

-110- were added, bringing the total upward mobility positions to 22 in eight different organizations. Five of the new positions were established in the Office of Plant Services, where three craftsmen graduated this past year. Other positions established were three gardener trainees in horticultural services and a public information specialist trainee at the Smithsonian Astrophysical Observatory. Additionally, a female janitor has been enrolled in the National Zoo's upward mobility program for training as a journeyman painter. The Smithsonian's past upward mobility efforts have been impeded by the lack of a comprehensive Institution-wide program and a uniform policy. In November 1975, an Upward Mobility Coordinator was employed to develop and implement such a program. As a result, a comprehensive guide has been developed and now awaits Civil Service Commission approval. This comprehensive approach provides central coordination for the Upward Mobility Program, will allow for better utilization of the Institution's resources, and will have its most effective impact in the areas of planning and program development at the bureau and major office levels. Previously, upward mobility programs had been designed to maintain bureau autonomy and to meet the special needs of the organization, under a decentralized system.

-111- Continuing efforts are being made through our budget process to acquire positions and funds for the Upward Mobility Program. EEO discrimination complaints increased during 1976 in comparison with past years. The number of inquiries made of EEO counselors increased to over 350 compared with approximately 225 in past years. The number of employees filing formal complaints increased from an average of 8 in past years to 13. Although the number of formal complaints increased, the resulting 1 complaint per 287 employees represents a small ratio. Employees have become increasingly aware of the program as a vehicle by which grievances can be resolved. It is well publicized and, as evidenced by the number of inquiries made and employees counseled, the EEO counselor system is effective in resolving these matters before they become costly. During 1976, a system was established for appointing EEO representatives to assist EEO complainants in filing and processing complaints. A representative assists and/or represents the complainant throughout the complaint process. These representatives, although Smithsonian employees, are trained by the Institution and maintain a client/attorney relationship with the complainant.

-112- During the current year, the EEO program will concentrate on affirmative recruitment efforts to employ additional Spanish-speaking persons and all minorities at the upper grade levels, and on the continued expansion of our Upward Mobility Program. The 1977 Affirmative Plan of Action, outlining the objectives for the year, has been approved and is now being published for implementation by Smithsonian supervisors. It was observed that statistics do not reflect the expected progress in the mid-level category of employment but the Secretary stated that every effort will be made to improve minority employment, especially in this group. A further report will be made at the next meeting.

-113- [[underlined]]Telecommunications Status Report[[/underlined]] The Office of Telecommunications (OTC) develops ideas toward the production of programs and series for public and commercial television and radio, films, and related visual and audio material. We currently have minimum staff and minor investment in the program but are proceeding to develop capabilities in this area. The following types of activities have been pursued over the past twelve months: --Bicentennial projects were a major concern. In addition to working with outside producers, the Office created and supervised the production and distribution of television and radio public service announcements highlighting the Smithsonian Bicentennial activities. More than 900 of the spots were distributed to commercial and public television and radio stations. (Incidentally, one of the TV spots has been awarded a Silver Medal by the Virgin Islands International Film Festival.) In addition, archival filming was done of the many Bicentennial exhibits and the visits of the numerous distinguished visitors. --The proposed television weekly panel program, tentatively entitled "Would You Believe," for the Public Broadcasting Service is ready to go into a pilot stage. The series, to be produced in cooperation with Station WETA-TV in Washington, is designed to stir the curiosity and intellect of the American public and is based upon objects drawn from the Institution's collections. Dr. Froelich Rainey, former Director of the University of Pennsylvania Museum in Philadelphia,

-114- is serving as our advisor and will take an on-the-air role in the pilot programs. --Work continues on another PBS project, the television magazine concept, "Smithsonian World." This one-hour weekly series is being prepared in conjunction with the Dallas public television station and with the cooperation of Mr. Ralph Rogers, Chairman of the Board of PBS. --Principal photography on the half-hour film about the Smithsonian has been completed. The film focuses on the continuity and individuality brought to the Smithsonian by each of its Secretaries through Secretary Ripley as the on-camera narrator. --The studio production facility idea is also progressing. Interest has been shown by Robert Sarnoff, former Chairman of the Board of RCA and Chairman of the Business Committee for the Arts. Also, other possible funding sources are being sought. --Radio Smithsonian, the weekly half-hour series, remains a steady commitment broadcast across the nation. Also, during the year a number of short radio feature spots were produced and aired in the Washington area. A weekly radio series, "Atlantic Dateline" with Edward P. Morgan as the host-editor, is now being broadcast around the country. OTC assisted in the initial preparations for this series and several Smithsonian curators have been featured thus far. --Although no longer committed to a formal contract, assistance has been provided to the Wolper Organization for a new prime-time

-115- television special on the "Great Pyramids" which is scheduled for telecast in April 1977. Also, one of the original specials. "Monsters: Mysteries or Myths?" was rebroadcast Thursday, January 20th at 8:00 p.m. The Smithsonian will receive royalties for the broadcast of both programs. --Two other projects remain active: The Encyclopedia Britannica Educational Corporation reports continuing sales in its Smithsonian filmstrip series and is developing additional series. American Image Films, Ltd., is preparing its sales campaign to schools of the film on the National Museum of Natural History, which was narrated by Orson Welles. The Smithsonian shares royalties from both ventures.

-116- [[underlined]]Panama Agreement[[/underlined]] For many years the Smithsonian Tropical Research Institute (STRI), in addition to its operations in the Canal Zone, has carried out research activities in the Republic of Panama. On June 6, 1974, after two years of negotiation between Smithsonian and Panamanian representatives and consultation with the Department of State, the Government of Panama approved a proposed contract between its Ministry of Health and STRI, which would give STRI official recognition and a number of specific benefits such as tax and customs exemptions in the Republic of Panama. In 1975, a proposal by the Department of State for an exchange of notes between the U. S. Ambassador and the Foreign Minister of Panama on behalf of STRI (in lieu of the unexecuted contract) was rejected by the Government of Panama. Extended discussions with the Department recently led to an understanding that the contract would be signed, and that prior thereto, in December, Embassy officials would advise the Government of Panama that the agreement between STRI and the Ministry of Health would not affect the legal prerogatives of the State Department under international law. As required by the contract, STRI registered in Panama as a nonprofit educational organization, and on December 2, 1976, this registration was accepted by the Government of Panama. On January 5, 1977, the Minister of Health called Dr. Rubinoff, Director of STRI, to

-117- his office to sign the agreement. Although Dr. Rubinoff was uncertain whether the Embassy officials had advised the Government of Panama as agreed, it was his judgment that any further delay in this matter would be prejudicial to STRI's relations with that Ministry and to STRI's educational and scientific mission. On January 6, 1977, the cognizant State Department official in Washington was notified that the agreement had been signed and was asked whether any further action on the part of the Smithsonian or STRI would be necessary or helpful. No response has as yet been received. The agreement is now in effect and should be of material benefit to STRI's research activities in Panama.

-118- [[underlined]] Litigation Report [[/underlined]] The following report describes various suits pending which the Department of Justice has been handling for us. [[underlined]] New Cases [[/underlined]] 1. [[underlined]] Scott [[/underlined]] v. [[underlined]] Ripley [[/underlined]] A full administrative hearing on this discrimination complaint brought by an applicant for a federal position resulted in a finding of no discrimination, which was appealed to the Civil Service Commission. On September 28, 1976, complainant brought suit in the U. S. District Court for the District of Columbia. The Department of Justice is handling the defense of this suit; trial has been set for April 6, 1977. 2. [[underlined]] Williams [[/underlined]] vs. [[underlined]] Ripley [[/underlined]] Plaintiff, a former Smithsonian building manager, filed this complaint in the U. S. District Court for the District of Columbia on October 21, 1976, alleging that his termination was a result of racial discrimination. The United States Attorney has filed an answer on behalf of the Institution, and is preparing other appropriate pleadings. Settlement possibilities are also being explored. 3. [[underlined]] Watt [[/underlined]] v. [[underlined]] United States [[/underlined]] This suit, filed in the U. S. District Court for the District of Columbia on September 24, 1976, arises out of a tort claim for injuries suffered in a fall on the esplanade in front of the National Museum of History and Technology. Damages in the amount of $75,000 are sought. On the facts as known, it does not appear that the mishap was caused by the negligence of the Smithsonian. The Justice Department is handling the case. [[underlined]] Cases Previously Reported [[/underlined]] 1. [[underlined]] Expeditions Unlimited Aquatic Enterprises, Inc. [[/underlined]] v. [[underlined]] Smithsonian Institution [[/underlined]] In this libel action against the Institution and a federal roll employee, summary judgment was granted in favor of the defendants. On appeal, the United States Court of Appeals for the District of Columbia held (June 28, 1796) that the Smithsonian Institution is immune

-119- from libel action under the Federal Tort Claims Act, but it remanded the claim against the federal employee to the district court for further consideration of the scope of his official immunity. On petition of the Department of Justice, the case was re-argued before all nine Appellate Court judges on December 16, 1976. No further opinion has as yet been handed down. 2. There have been no changes in the status of the following cases since the last litigation report to the Regents on October 1, 1976: Claims arising out of construction of the Hirshhorn Museum [[underlined]] Benima [[/underlined]] v. [[underlined]] Smithsonian Institution [[/underlined]] [[underlined]] Chedister [[/underlined]] v. [[underlined]] United States [[/underlined]] [[underlined]] Foster [[/underlined]] v. [[underlined]] Ripley et al. [[/underlined]] [[underlined]] Living Window ICC, Inc., and Joseph Etelman [[/underlined]] v. [[underlined]] James S. Ward, Inc., James S. Ward and the Smithsonian Institution [[/underlined]] [[underlined]] Mason [[/underlined]] v. [[underlined]] United States [[/underlined]] [[underlined]] Precure [[/underlined]] v. [[underlined]] United States and John Naveau [[/underlined]] [[underlined]] Winston [[/underlined]] v. [[underlined]] Smithsonian Science Information Exchange [[/underlined]]

-120- [[underlined]] Hydrogen Fuel [[/underlined]] In order to manifest our interest in the environment and our concern over energy conservation, we have been seeking for about two years an innovative vehicle to incorporate into our transportation system within the Smithsonian Institution. We have considered gas turbine, electrical, and others. A few months ago, there came to our attention a truly revolutionary concept which is under study in a small research agency in Provo, Utah, the Billings Energy Corporation. They are conducting research into the use of hydrogen as a source of energy, and have been using this system successfully in a number of test vehicles including several buses and passenger cars. With the cooperation of the Energy Research and Development Administration (ERDA), we arranged for one of these vehicles to be included in the Inaugural Parade. Of longer term interest, however, is our intent to convert one or more vehicles for use in the Washington area, and at least to monitor and perhaps provide assistance to the research efforts of the Billings Energy Corporation in exploring the possible uses of hydrogen as a fuel. One other interesting possibility they are considering, as recently described by Roger Billings, President of this small corporation, is the use of hydrogen as the total source of power for a small village in conjunction with their laboratories in Provo, Utah. Hydrogen is not a primary fuel; it must

-121- be manufactured from water and either fossil or non-fossil energy sources. The water can be split by electrolysis, using electricity produced by a variety of means, including conventional fossil, hydroelectric, nuclear fission, geothermal, tidal, wind, solar, ocean thermal, and nuclear fusion. Hydrogen can also be produced by a process called reforming, by the reaction of natural and other gases with steam at high temperature. Using such processes, Billings proposes to operate this small village within the confines of his corporation's area in Utah.

-122- [[underlined]] The Silver Jubilee of Her Majesty Elizabeth II [[/underlined]] Queen Elizabeth II will be celebrating her Silver Jubilee coinciding with her birthday on June 15, 1977. It has been suggested that the Smithsonian Institution take part in developing an appropriate recognition in the United States in cooperation with the English Speaking Union and the Pilgrims. In this connection the Cooper-Hewitt Museum plans to open a special exhibition including their own original drawings and plans for the Pavilion at Brighton as well as objects being loaned by Buckingham Palace and the trustees of the Pavilion. In connection with this exhibition, the Museum is planning a benefit Silver Jubilee ball. Over the last century, a number of members of the British Royal family have visited the United States. Their coming has led to the acquisition by Smithsonian museums of a small but representative group of objects which, in one way or the other, celebrated these visits. It is planned that a small exhibition will be organized in a gallery of the Museum of History and Technology to open sometime prior to the official start of the Jubilee Celebrations in England.

-123- A fitting way to celebrate such a historic occasion and one which would further underline the special bonds that exist between the Institution and Great Britain would be the striking of a commemorative medal bearing the portrait of the Queen, with an appropriate inscription on the reverse, and which might be sold as a benefit for a fellowship fund that might bring promising young Britishers to the United States for study or provide a similar opportunity for Americans to go to England. Inquiries are being made concerning a suitable design and the manner in which such a medal might be promoted. It is expected, at the moment, that this medal be designed and struck in silver in England and that it may bear the silver hallmark of London. To help coordinate these activities, the Secretary has suggested the creation of an ad hoc committee which would consist of the Chairman of the English Speaking Union in the United States, the President of the Pilgrims, as well as the previous ambassadors of the United States to the Court of St. James.

-124- [[underlined]] Trip to Panama by Regents [[/underlined]] Mr. Watson has suggested that he would like to help organize another visit of the Regents to the Smithsonian Tropical Research Institute in Panama. His hope was to produce private transportation via two Gulfstream planes holding a dozen or more persons. The trip could be made over a weekend, with minimal time change and physical effort. Appropriate times for such a visit might be in the autumn, when the weather is good -- September, October, November or December. The Secretary will be asking the Regents about their interest in going to Panama and will keep interested Regents advised of future plans. The Secretary will inform Mr. Bunker and Mr. Linowitz of the idea, as well as of the previous successful trip in 1972, so as to make sure there are no political overtones to such a trip by the Regents.

-125- [[underlined]] Lady Regent [[/underlined]] As has been mentioned previously, considerable thought has been given to the selection of a lady regent of the Smithsonian. It should be noted that there are no present vacancies on the Board, nor are any contemplated in the near future. However, a number of names have been suggested as possible candidates for the future and we have biographies of the following ladies in hand: Fawn McKay Brodie, biographer and historian Hanna Holborn Gray, educational administrator, Provost, Yale Dixy Lee Ray, Governor, Washington Nancy Hanks, National Endowment for the Arts Margaret Mead, anthropologist, professor, adviser, lecturer Corinne C. (Lindy) Boggs, Member of Congress, Louisiana Jeanne Marjorie Holm, General, Air Force Carla Anderson Hills, former Secretary of HUD, lawyer Shirley Chisholm, Member of Congress, New York Millicent Fenwick, Member of Congress, New Jersey Elizabeth Holtzman, Member of Congress, New York Barbara Jordan, Member of Congress, Texas Margaret Heckler, Member of Congress, Mass. We would welcome any additional names for consideration at the appropriate time.

-126- [[underlined]] GAO Review [[/underlined]] Mr. Ripley advised that the GAO team has completed about 75 percent of its draft report and expects to have the remainder completed within a few days. The draft is beginning to be reviewed within GAO and we might expect to see the document around the end of January. It is uncertain how much time we will be allowed to review the draft and comment upon it. Two weeks were mentioned, but we agreed that the time allowance hinges in part on what the report says. It is likely that Mr. Cookfair, the GAO audit team supervisor, will deliver the draft report to Mr. Ripley, outline its conclusions, and provide an opportunity for some discussion. [[underlined]] Adjournment [[/underlined]] The meeting adjourned at 12:45 p.m. [[underlined]] Next Meeting [[/underlined]] The Regents will be polled concerning a date for the next meeting. Tentative dates mentioned were: -- Dinner: Thursday evening, May 12, 1977 -- Regents Meeting: Friday morning, May 13, 1977 -- Dinner: Sunday evening, May 15, 1977 -- Regents Meeting: Monday morning, May 16, 1977 * * * *

-127- The traditional dinner of the Board of Regents took place in the Museum of History and Technology on Monday evening, January 24, 1977. On this occasion the recently completed bust of former Secretary Leonard Carmichael was unveiled. In addition to the Regents and their wives, attending were Mrs. Leonard Carmichael, the sculptor of the bust, Mrs. Una Hanbury and her family, and a number of other guests. Respectfully submitted: [[signed]] S Dillon Ripley [[/signed]] S. Dillon Ripley, Secretary Smithsonian Institution

[[underlined]]ADMINISTRATIVELY CONFIDENTIAL[[/underlined]] [No part of these minutes is to be divulged unless specifically authorized by the Secretary.] SMITHSONIAN INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS May 13, 1977 INDEX [[2 column table]] | Page Attendance | 1 Welcome to New Regent | 2 Appointment of New Regent | 2 Minutes of Meeting of January 25,1977 | 3 Annual Report of the Secretary for the Fiscal Year 1976 | 3 Report of the Executive Committee | 5 Regents' Audit and Review Committee Report and Discussion | 6 Media Coverage of Regents Meeting | 24 Financial Report | 25 Policy Relating to Use of Trust and Federal Funds | 48 Museum of African Arts | 57 Archaeometry-Conservation -- Dr.Gell-Mann | 82 Legislative Report | 84 Equal Employment Opportunity Progress Report | 86 Status Report on Major Construction | 112 Smithsonian Book Publishing Task Force | 114 Mall Underground Parking | 116 1977 Festival Activities | 118 Litigation Report | 120 Report on the National Associates Board Meeting | 122 [[/2 column table]]

SMITHSONIAN INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS May 13,1977 [[Underlined]]Attendance[[Underlined]] The meeting of the Board of Regents was called to order by the Chancellor on May 13,1977, at 9:30 a.m., in the Regents Room of the Smithsonian Institution Building. Present were: Chief Justice Warren E. Burger, Chancellor J. Paul Austin Robert F. Goheen Murray Gell-Man Caryl P. Haskins Judge A. Leon Higginbotham Thomas J. Watson, Jr. James E. Webb, Chairman, Executive Committee Senator Henry M. Jackson Representative Lindy Boggs Representative George H. Mahon The Vice President, Walter F. Mondale, was unable to be present because of his pending travel out of the country. He sent his regrets and asked that he have an opportunity to meet with a number of Regents upon his return to the United States for a briefing of this past meeting. Senators Goldwater and Pell, Congressman Cederberg, and Messrs. Burden and Brown were unable to attend because of conflicting commitments. Proxies were received from Messrs. Goldwater, Pell and Cederberg. Also present were Assistant Secretaries Blitzer, Challinor, Euell, Jameson, Treasurer T. Ames Wheeler; General Counsel Peter G. Powers; Director of Support Activities Richard L. Ault; Director of Membership and Development James McK. Symington;

-2- Executive Assistant to the Secretary Dorothy Rosenberg; Special Assistant to the Secretary James M. Hobbins; and Director of Public Affairs Carl W. Larsen. In addition were a representative from the Vice President's Office, Ms. Lynn Schenk; Administrative Assistant to the Chief Justice Mark Cannon; Legislative Counsel to Senator Jackson Owen Malone; and Management Consultant Phillip S. Hughes. [[underlined]] Welcome to New Regent [[/underlined]] On behalf of the Board, the Chancellor welcomed the newly appointed Regent, Congresswoman Corinne C. Boggs, who replaced Congressman Sidney R. Yates, who had chosen not to be reappointed. [[underlined]] Appointment of New Regent [[/underlined]] The Secretary had been advised by Dr. Goheen of his appointment as Ambassador to India and his regretful resignation as a Regent of the Institution, to become effective after this meeting. The Board of Regents authorized the Chancellor to designate a search committee of Regents who will be responsible for presenting potential candidates to the Board of Regents. After selection of a candidate appropriate legislation will be submitted to the Congress for the candidate's appointment for the statutory term of six years.

-3- Although a number of worthy candidates could be named for consideration, it was pointed out that the legislation limits the number of Regents who reside in the District of Columbia. Therefore, this vacancy occurs in the category of citizen Regents who, by statute, "shall be inhabitants of some State, but no two of them of the same State." [[underline]] Minutes of Meeting of January 25, 1977 [[/underline]] It was noted that the Minutes of the Regents' meeting of January 25, 1977, had been circulated to the members of the Board. The Board having no changes to suggest recommended approval of the Minutes. It was VOTED that the Minutes of the meeting of January 25, 1977, as circulated on February 23, 1977, are approved. [[underline]] Annual Report of the Secretary for Fiscal Year 1976 [[/underline]] Mr. Ripley reported that the Annual Report for Fiscal Year 1976 includes the transition quarter, a 15-month period, which delayed publication of the report. It is hoped that future reports can be reduced in size without impairing their comprehensiveness. Mr. Ripley called attention to the full disclosure of financial statements, including Federal and trust funds, a practice which has been followed since Fiscal Year 1972 and which he urged everyone to read. As is

-4- customary, the Annual Report will be transmitted to the Speaker of the House and the President of the Senate, in accordance with the statute. The following motion was approved: VOTED that the Board of Regents accepts the Annual Report of the Secretary for the Fiscal Year 1976.

-5- [[underline]] Report of the Executive Committee [[/underline]] Mr. Webb reported that the meeting of the Executive Committee of the Board of Regents took place on May 2, 1977, in the Chambers of the Chief Justice. Attending were: Chief Justice Warren E. Burger, Chancellor James E. Webb, Chairman Caryl P. Haskins William A. M. Burden S. Dillon Ripley, Secretary Charles Blitzer, Assistant Secretary for History and Art T. Ames Wheeler, Treasurer John F. Jameson, Assistant Secretary for Administration Dorothy Rosenberg, Executive Assistant to the Secretary. Mr. Webb stated that the Executive Committee considered the items on the Agenda, and their recommendations, together with any revisions resulting from their discussions, are contained in the following papers. He reported that a great deal of time was spent on how to handle the report of the General Accounting Office on the Smithsonian and the various possibilities considered by the Audit and Review Committee. The Audit and Review Committee, appointed by the Chancellor, is composed of the following members: Senator Henry M. Jackson, Chairman Congressman Elford A. Cederberg J. Paul Austin Murray Gell-Mann J. William Fulbright James E. Webb, as Chairman of the Executive Committee, also participated.

-6- [[underline]] Regents' Audit and Review Committee Report and Discussion [[/underline]] Senator Jackson reported that the Audit and Review Committee met on April 20 and 21, 1977 to review the issues raised by the GAO Report on the Smithsonian of March 31, 1977, and the concerns expressed over that report and the Institution during Appropriations Subcommittee hearings in the Congress. At its initial meeting the Committee considered the desirability of engaging an independent management consultant to perform an impartial review of the questions raised and of the Smithsonian's management and unique place and role in the Federal Establishment. As a result of that first meeting, Senator Jackson received a letter from Secretary Ripley expressing his personal commitment and that of his entire staff to cooperate in any study to be undertaken (copy attached). Senator Jackson then wrote to the Chairmen and ranking minority members of the House and Senate Appropriations Subcommittees apprising them of the proposed independent study. Senator Jackson also requested the Subcommittees to maintain the status quo [[superscript]] [[underline]] 1 [[/underline]] / [[/superscript]] with regard to the passage of the FY 1978 appropriation and reported that he had talked with the four members personally to acquaint them with the proposed study and to solicit their cooperation respecting continuing appropriations. Subsequently, the House Subcommittee on Appropriations indicated they will ask the full Appropriations Committee for a separate investigation. [[short line]] [[underline]] 1 [[/underline]] / See letter of Sen. Jackson to Sen. Byrd, Chairman, dated April 26, 1977 (attached)

-7- Senator Jackson reported that while Mr. Austin had been requested by the Committee to attempt to identify outside firms qualified to undertake a study of the Smithsonian's organization and management, this approach had been reconsidered. In the Senator's view, the questions posed by the GAO Report and, more importantly, the questions raised during the Appropriations hearing evidence concerns broader than the day-to-day management of the Institution. Senator Jackson explained that, in his judgment, the questions being raised in the Congress reflect a growing concern over more fundamental matters, such as: the relationship of the Smithsonian to the Federal Government; its relationship to the Congress in particular; the place of the Institution in the Federal Establishment; the statutory authorities under which it operates; the ownership of its properties; and how all of this bears on the Smithsonian's financial and management accountability to the Congress. In Senator Jackson's view, a lack of clarity and a misunderstanding of such matters has contributed to the present problems, and the Regents' first task should be to address these matters directly -- to obtain an impartial review and reassessment of the place of the Institution within the Federal framework. Senator Jackson emphasized the fact that there is nothing in the GAO Report that suggests any wrongdoing or misapplication of Federal funds by anyone. He recommended that the Regents should address themselves to more fundamental

-8- questions first. In this connection, the Senator stated that, in his view, the Regents would be best served by engaging the services of an independent consultant to study these basic questions -- one who is an acknowledged expert on Federal Government organization and Executive-Congressional relationships, and one respected for his experience, scholarship, and impartiality. The Senator stated that the basic task is to re-examine the Smithsonian's charter in the light of present criticisms; to produce an impartial, scholarly report from a political science and government organization point of view; and as necessary to develop recommendations for changes in the law to better define the Institution's relationships and role, facilitate its accountability to the Congress, and overcome present misunderstanding. The Senator stated that consideration might also be given to the selection of a "blue ribbon" group of qualified citizens to advise such a consultant during the course of the study, but that it is important to center the responsibility in the consultant who would be charged with moving the project ahead. Senator Jackson reported that a number of knowledgeable people have proposed Mr. Phillip S. Hughes as an excellent choice to perform such a study. The Senator expressed his own confidence in Mr. Hughes and reviewed his background and qualifications, which includes service as an Assistant Director of the Bureau of the Budget and Assistant Comptroller General

-9- of the U. S. He described Mr. Hughes as a recently retired outstanding Federal Government careerist, thoroughly versed in organization and operations, including Executive Branch-Congressional relations, and a man widely known and highly respected for his experience, objectivity and nonpartisanship. Senator Jackson reported that in his consideration of persons who might perform the study, he found that Mr. Hughes is well known to Senator Stevens and Congressman Yates, both of whom have a very high regard for Hughes' judgment and expertise. According to Senator Jackson, Senator Robert Byrd knows Mr. Hughes casually and Congressman McDade also knows him by reputation. Mr. Webb said that he had worked with Mr. Hughes both in the Executive Branch and the GAO, as well as in other assignments over a long number of years on some very complex problems, and thinks he is the best person we could get to work on these problems. Mr. Webb feels it is extremely important that the members of Congress and their staff members have confidence in whomever the Regents select. It was concluded that Mr. Hughes does enjoy that confidence. The Chancellor agreed with Senator Jackson and Mr. Webb that, if available, Mr. Hughes should be asked to head up the study outlined by Senator Jackson. It was agreed that the Regents should have a person of Mr. Hughes' experience and stature as the principal consultant on the project.

-10- Senator Jackson added that since the Appropriations Committees are involved, it would be desirable for Mr. Hughes to meet with the principal members of the two Subcommittees on Appropriations in the House and Senate and the House Appropriations Committee to obtain their view of the Smithsonian's problems, and acquaint them with the scope of the study. It was noted that while the House Committee normally gets into matters such as how funds are handled, expenditures, etc. and that while such information would have to be available to Mr. Hughes, it is not intended that he concentrate on such details. Rather, Mr. Hughes' study would focus on more fundamental questions having to do with the history and unique nature of the Smithsonian, its statutory authorities, its relationship to the Federal Government and whatever restructuring or new legislation might be desirable. It is anticipated that Mr. Hughes would reach his own conclusions and develop legislative, reorganizational, and other recommendations for consideration by the Regents. It is not anticipated that Hughes' work would include a financial or management audit. His task would be to do a thoughtful, scholarly review of the Smithsonian and its present Government and private relationships with a view to defining solutions to the kinds of problems raised by the GAO and the Appropriations Committees. Senator Jackson said that

-11- the objective should be to preserve the Smithsonian as a unique and creative organization, attractive to scholars, to provide it independence, and yet make it workable in its relationships with Government and fully accountable to the Congress. The various questions which became evident during the discussion concerning the nature of the Smithsonian included: How can the Smithsonian's unusual conglomerate work with the Committees of Congress and keep them informed? How can it obtain some continuity of understanding with the changing committees of Congress? Where does the Smithsonian fit into the Federal structure? What restructuring, if any, is needed? How can the Smithsonian preserve, maintain, and extend its creativity and remain attractive to scholars in the various disciplines while, at the same time, insure its integrity and independence, as a responsible and fully accountable trust establishment of the United States? How can the Institution preserve its present freedom of movement to achieve these goals and objectives in a way that will be acceptable to the Congress? Senator Jackson made it clear that he does not view the proposed study as an investigation but rather as a review of the Smithsonian to ascertain its proper operating relationship within the Federal system.

-12- Mr. Webb suggested that the first job for Mr. Hughes would be to define the problem and pursue the assignments of the Audit Committee under Senator Jackson's direction. It was pointed out that there might be no need for a large advisory committee, and that given a better understanding of the major concerns besetting Congressional members and their staffs, a panel of advisors might not be necessary. Senator Jackson said the key requirement at this point is to have it clearly understood that assuming he accepts the assignment, Mr. Hughes would have full authority to carry out the study under the guidance of the Audit and Review Committee. The Chancellor stated that a general resolution should be approved to authorize the Executive Committee to take whatever steps are necessary to engage Mr. Hughes' services and to make whatever commitments are needed to implement the study. The Chancellor commented on the differing relationships of the Smithsonian to its satellite institutions, a subject he planned to bring up later at this meeting under new business. Mr. Mahon stated that during his recent absence from Washington, the House Subcommittee voted on a motion made by Congressman Jamie Whitten that the House Appropriations Committee conduct an investigation of the Smithsonian. He pointed out that there is no criticism of wrongdoing and that the investigation

-13- is probably sparked by recent publicity in the newspapers. Mr. Mahon explained that the procedure for such a request is done by a letter in which a request is made pointing out each issue to be looked at. This letter is signed by the subcommittee chairman and ranking minority member, as well as Chairman Mahon and Mr. Cederberg. The Appropriations Committee maintains an investigative staff of 30 to 50 investigators, who are highly professional and conduct an absolutely objective operation. Mr. Mahon will want to discuss the particular issues with the subcommittee members in an effort to make the best resolution of the problem, and he will be glad to cooperate and avoid any duplication of reviews as well as not take too much time of the Smithsonian staff members. Senator Jackson offered to be available to the Appropriations Committee staff as well as to the chairman and ranking members so that there can be a free flow of comments and suggestions. Senator Jackson again stressed his expectation that the study to be undertaken is to be a thoroughly objective, scholarly review of the foundations of the Smithsonian and of its present place in the Federal Establishment. He expects the study to produce a first-rate analysis of the Institution's authorities, organization, and public and private relationships, and well-considered recommendations that will be helpful to both the Congress and the Smithsonian itself in defining ways to clarify the Institution's charter, and strengthen its accountability to the Congress.

-14- Mr. Webb questioned whether we were clear with the Appropriations Subcommittee that they will move forward with the present budget that is before them and give us time to do this investigation. Mr. Ripley stated that the House mark-up had proceeded normally except for the categorical deletion of the Research Awards Program, a vital research category which permitted Smithsonian staff to pursue on-going research funded for many years by the NSF. Congress had been approving this item regularly since 1966, and the Smithsonian had been treating the funds in the same manner as those previously received from NSF. The GAO Report covered this subject in great detail, and it is evident that the Subcommittee deleted the Research Awards Program pending some resolution of this matter. Mr. Webb wondered if the Appropriations Committee would restore this item in the budget until the Audit and Review committee had completed its work. Mr. Ripley stated that the Smithsonian is heartily in accord with the foregoing discussion and stands ready to provide information and aid to the review committees as needed. He said that the staff has been working with the GAO for six months, providing whatever materials have been requested. Mr. Ripley also referred to the work of his staff in preparing a list of possible topics which might be addressed in these studies based on the work which has been going on for the last

-15- six months. He does not wish to preempt any of the considerations of the committees, but had prepared a suggested agenda in the form of a memorandum which he then handed out to the Regents (copy attached) and which could be considered by Mr. Hughes. Mr. Hughes, who was present at the meeting in order to gain insights into the thinking of the Regents, was invited to comment and stated that he would be very much interested in assuming an assignment which would cover essentially the question of the relationship between the Smithsonian Institution and the Federal Government, and most notably the Congress. He said that he was not sure that other questions of a more narrow management nature needed to be addressed, but if the did he would prefer that they be addressed by other consultants or the GAO. The question of political science is the vital and central question that Mr. Hughes would like to focus on. Based on the discussion, Senator Jackson suggested that Mr. Hughes' study should focus principally on the concerns being expressed in the Congress, the Smithsonian's history, the philosophy or rationale involved in incorporating a trust entity as part of the Federal structure and insuring its accountability to the public; organizational problems; the Smithsonian's present statutory authorities; and its overall relationship to the Federal Government. The Senator stated

-16- that he will write a letter to Mr. Hughes outlining the general scope and objective of the study and suggested that such a letter could form the basis of a public announcement of Mr. Hughes' engagement and the scope of the study at an appropriate time. To recapitulate, the Audit and Review Committee, through Senator Jackson and with the assistance of Mr. Hughes, will: -- Define the scope of the study to be undertaken by Mr. Hughes; -- Acquaint the Appropriations Subcommittees with the scope of the study in an effort to obviate unnecessary duplication and to provide for full cooperation in relation to other studies and inquiries; -- Engage such staff to assist Mr. Hughes as he deems necessary, and provide for space and other necessities; and -- Make recommendations to the Executive Committee. The following motion was considered and approved: VOTED that the Board of Regents authorizes the Executive Committee to engage Mr. Phillip S. Hughes as management consultant to develop a study plan for the review of the Smithsonian Institution structure, with full responsibility and authority to act on behalf of the Audit and Review Committee in pursuing this study. Authority is also vested in the Executive Committee to do all things necessary to implement the functions of the Audit and Review Committee under the chairmanship of Senator Jackson. The Chancellor and Mr. Webb agreed that Senator Jackson and the other members of the Committee were handling the matter very efficiently and were pleased with the help received from their assistants.

IDENTICAL LETTER TO: Senator Ted Stevens Congressman Sidney R. Yates Congressman Joseph M. McDade -17- [[preprinted]] United States Senate WASHINGTON, D.C. HENRY M. JACKSON WASHINGTON ROOM 137 SENATE OFFICE BUILDING WASHINGTON, D.C. [[/preprinted]] April 26, 1977 Honorable Robert C. Byrd, Chairman Subcommittee on the Department of the Interior and Related Agencies Committee on Appropriations United States Senate Washington, D. C. 20510 Dear Mr. Chairman: I am writing this letter as Chairman of the Audit Review Committee of the Board of Regents of the Smithsonian Institution. Our committee was recently established by Chief Justice Burger, the Chancellor of the Smithsonian, and has been asked to review the Report of the Comptroller General on the Smithsonian Institution released March 31, 1977. The committee will also explore the concerns that were expressed during the Smithsonian's budget hearing in the Senate on April 18. The Audit Review Committee met last Thursday, April 21, and is committed to undertaking a thorough review of the entire situation. The GAO Report and the concerns expressed during the Senate hearing have been discussed with Secretary Ripley and his staff, all of whom are committed to working with your Subcommittee, the Audit Review Committee, and the Board of Regents to resolve these matters. In this connection, I enclose a copy of a letter I have received from the Secretary of the Smithsonian Institution pledging his cooperation in this effort and suggesting that the Board of Regents authorize an independent study of the Smithsonian's organization, management and procedures to assess the Institution's present accountability to the Congress and the effectiveness of its operations and management. Such a study would also re-examine the Smithsonian's present statutory authorities and recommend whatever changes may be needed to bring them up to date and strengthen them. [[preprinted]] (NOT PRINTED AT GOVERNMENT EXPENSE) [[image: oval with unreadable text]] 24 [[/preprinted]]

-18- Honorable Robert C. Byrd April 26, 1977 Page 2 I think Secretary Ripley's suggestion is well taken. Such an independent study will be recommended to the Board of Regents. The Audit Review Committee feels as I do, that an independent study by a qualified consultant would be very helpful to the Congress, the Smithsonian itself, and the public generally. In view of the heavy Federal investment in its facilities and the Institution's increasingly heavy reliance on appropriated funds for its operations, the Smithsonian has taken on a predominantly Federal character. Its full accountability and responsiveness to the Congress must be assured. The proposed study should clearly define the Smithsonian's charter and determine whatever new legislation may be desirable to assure its responsiveness as a Federal instrumentality. As Secretary Ripley points out, the objective should be to identify opportunities for improvement while, at the same time, preserving the unique qualities that have made the Smithsonian such a source of national pride and achievement. The study to be undertaken by the Board of Regents will require time. In the meantime, the Smithsonian's programs--including the special activities administered by the Smithsonian Research Foundation and the Smithsonian Science Information Exchange--must go forward. We are well along in the appropriations process. In view of the proposed study and the determination of the Smithsonian to work with your Subcommittee to resolve the present problems, it is my hope that your Subcommittee will be able to maintain the status quo and provide appropriations for these important programs from Fiscal Year 1978. It is important that as we work to respond to the questions that have been raised, the very valuable programs of this great institutions should not be impaired. Sincerely, [[signed]]Henry M. Jackson[[/signed]] Henry M. Jackson Enclosure

-19- [[preprinted]] [[image - line drawing of the Smithsonian Institute Building ("the Castle")]] SMITHSONIAN INSTITUTION Washington, D.C. 20560 U.S.A. [[/preprinted]] April 25, 1977 Honorable Henry M. Jackson United States Senate Washington, D.C. 20510 Dear Senator Jackson: I am addressing this letter to you in your capacity as Chairman of the Audit Review Committee of the Board of Regents. At its meeting last Thursday, your committee commenced its consideration of the comments and recommendations contained in the Report of the Comptroller General of the United States on the Smithsonian Institution released March 31, 1977. As you know, the Report was also the subject of questioning during the Smithsonian's budget hearing in the Senate on April 18. Following up on our presentation at Thursday's meeting, I am writing to assure you, as Secretary, that I and the Smithsonian staff will cooperate in every way with your committee, the Board of Regents, and the Congress. We are most desirous of resolving the questions raised by the Comptroller General and of responding to the concerns evidenced by the Appropriations Subcommittee. Indeed, we are eager to do so. There can be no question concerning the need to insure the Smithsonian Institution's full financial accountability to the Congress respecting both its Federal and private funds. No uncertainty should attend the policies and procedures governing the use of either appropriated funds or trust funds, or the internal management and operations of the Institution. And, of course, there should be a clear understanding by all of the statutory authority underpinning our activities.

-20- It is our desire and intention to work with your committee, the Board of Regents, and the staffs of the appropriate committees of the Congress respecting the Comptroller General's recommendations. The Appropriations Committees have been provided annually with detailed information covering past expenditures of private funds. We are now preparing estimates of future private spending for review and approval by the Board of Regents. Trust fund expenditures which might entail the need for future significant commitments of public funds will be highlighted for the Appropriations Subcommittees. We are undertaking to make all desired information available to the relevant committees of the House and Senate, and have been in touch with the Appropriations Committees concerning the preparation of approved guidelines for the reprogramming of funds. We will cooperate with the committees in every way. In view of the concerns expressed during our budget hearing, I think a broader review of the Smithsonian and its operations might well be helpful to the Congress, the Institution itself, and to the public understanding of the Smithsonian. I suggest that the Audit Review Committee may want to seek approval of the Board of Regents for an independent study and evaluation of the Institution's organization, management and procedures, including an assessment of its accountability to the Congress and the effectiveness of its operations and management. The goal should be to identify opportunities for improvement while, at the same time, preserving the qualities that have made the Smithsonian a source of national pride and an effective instrument of public service. At the same time we might also review the statutory authorities under which we operate and recommend changes to update and strengthen the Smithsonian's present charter. We are now compiling these authorities for the Audit Review Committee and the interested Committees of the Congress. Any meaningful exploration of the questions raised will require considerable time. In the meantime, of course, the important work of the Institution must go forward. We are at a critical juncture in the appropriations process. The subcommittees will soon complete their work on the Institution's pending budget requests. It is our hope that arrangements can be made for the continued funding of our programs without interruption in the period ahead while we work together to resolve present concerns. Please be assured of my personal commitment and that of my entire staff to work closely with your committee and the Board of Regents on these matters. With appreciation, I am, Faithfully yours, [[signed]]S. Dillon Ripley[[/signed]] S. Dillon Ripley Secretary

-21- May 12, 1977 Management Review of the Smithsonian Institution Outline of Study Topics "...I enclose a copy of a letter I have received from the Secretary of the Smithsonian Institution pledging his cooperation in this effort and suggesting that the Board of Regents authorize an independent study of the Smithsonian's organization, management and procedures to assess the Institution's present accountability to the Congress and the effectiveness of its operations and management. Such a study would also re-examine the Smithsonian's present statutory authorities and recommend whatever changes may be needed to bring them up to date and strengthen them....The proposed study should clearly define the Smithsonian's charter and determine whatever new legislation may be desirable to assure its responsiveness as a Federal instrumentality. As Secretary Ripley points out, the objective should be to identify opportunities for improvement while, at the same time, preserving the unique qualities that have made the Smithsonian such a source of natural pride and achievement." - extract from Senator Henry M. Jackson's letter of April 26, 1977 to the Chairmen and Ranking Minority Members of the House and Senate Subcommittees on Interior and Related Agencies, Committees on Appropriations. From this statement of intentions, it may be determined that the proposed study should be relatively broad rather than narrow in scope. Furthermore, it should concentrate on questions and issues at the Institutional level rather than policies or procedures internal to the operations of individual bureaus or offices. An exception to this understanding is the requirement to review the adequacy of legislative authorities as they pertain to separate organization units or programs. On this basis, the following study outline is suggested. Organization of the Smithsonian Institution - Review of its origin and development (Mr. Powers' essay with study group comment as necessary) - Present organization of the Institution (scope and diversity of activity) - Effectiveness of oversight and direction of Smithsonian activities and policies by the Board of Regents; legal liabilities as trustees; relationship of the Congressional Regents to the Congress - Role of the Smithsonian Secretary and the traditional nature of his responsibilities

-22- - Management responsibilities of top staff; adequacy of administration of the Institution - Assessment of Smithsonian effectiveness in fulfilling its mission (emphasis on the period 1964 to present) - Plans for future development (discussion of program and facility needs) Statutory Authorities Pertaining to Smithsonian Activity - Coverage of current legislation, an assessment of its adequacy, and requirements for new legislation - Special requirements for the effective management of research and education programs - Necessary measures to conserve the nature of the Institution Financial Management - Policy governing financial decisions on the uses of federal and trust funds (separately and in conjunction with federal funds) - Establishment of guidelines for reprogramming federal appropriations - Procedures for advising the OMB and the Congress of trust fund activity requiring significant future federal expenditures - Presentation of trust fund budget forecasts - Description and uses of restricted and special purpose trust funds - Regents review of federal appropriation requests - Desirability of annual audit of the Institution's federally appropriated funds by an independent public accounting firm Other Matters - The legal, fiscal, and practical nature of the Smithsonian's various property holdings in land, building, and collections (especially with reference to sources of acquisition funds versus disposition of proceeds from sales of property)

-23- - Policies and procedures with regard to collections policy and management (review of current study effort for OMB and the Congress) - Effectiveness of communications with and accountability to Congress (adequacy of the [[underline]] Smithsonian Year [[/underline]] and suggestions for other means)

-24- [[underline]] Media Coverage of Regents Meetings [[/underline]] Mr. Ripley reported that a representative of the United Press International had renewed his request to attend the May meeting of the Board of Regents. Other media representatives (Betty James, The Washington [[underline]] Star [[/underline]] ) have also made similar requests. This matter was also raised by Congressman Regula at the hearings on April 29, 1977, before the House Subcommittee on Appropriations and mentioned in press coverage on April 30. At the January 1977 meeting the Regents approved the procedure of the Secretary having an interview with the press after the meeting. This was done on the basis of an outline of the proceedings prepared immediately after the meeting. Inasmuch as this matter is under consideration, the Secretary was requested to brief the press at the end of the meeting.

-25- [[underline]] FINANCIAL REPORT [[/underline]] [[underline]]Status of Federal Appropriations [[/underline]] Mr. Wheeler reported that since the last Regents Meeting in January, the Institution has been informed that 94% or $3.2 million of the supplemental appropriation requested from Congress to cover costs of the October 1976 pay raise will be approved by Congress; the Office of Management and Budget, however, rejected our seeking a supplemental to meet the costs of the February Executive Level Pay Raise. It is not anticipated that these actions will seriously affect current year operations. The FY 1977 operating fund level is now $90,689,000, including the Smithsonian Science Information Exchange and Foreign Currency Program but excluding Construction and Restoration and Renovation funds. (Exhibit A). The results just received of the House Subcommittee on Appropriations mark-up indicates that the Institution did quite well overall. In Salaries and Expenses we received about 80% of the $3.6 million increase requested; SSIE was approved despite the controversy raised in the GAO Report. Special Foreign Currency was approved at $4 million; Zoo construction was increased to $2.5, although our budget request was for $1 million; planning funds were approved for the Museum Support Center, and all Renovation and Restoration funds were approved except for the MHT Library addition. However, as previously mentioned the Research Awards Program was not funded.

-26- Final action on our appropriation bill may be expected in mid-June. Preparation of the FY 1979 Budget has been initiated in line with the new Zero-Base Budgeting format, and it will be presented to the Board at their September meeting. [[underline]] Trust Funds [[/underline]] Attached Exhibits B and C show projections for unrestricted, special purpose, and restricted trust funds for the current year FY 1977, as well as a tentative budget for 1978. The latter stems from the request of the Senate Appropriations Subcommittee and the GAO Report recommendation that trust fund budgets be made available to Congress at the same time they consider federal appropriation requests for that year. This FY 1978 budget will be discussed separately later. [[underline]] Unrestricted Funds - FY 1977 [[/underline]] -- For the first six months ending March 31, 1977, results ("Gain before Transfers to Plant and Endowment Funds") are more than $1,100,000 above the original budget approved in October 1976. A major share of this improvement occurred in the Magazine. Membership subscriptions have reached the 1,500,000 level and advertising revenues are currently above previous estimates. The other Associate programs are doing well, as are restaurant and parking concessions. Income from the Shops has recovered due to tight control of expenditures; the latest physical inventory was favorable, indicating that most of the large deficit

-27- reported last year may have been the result of inventory assessment rather than actual loss. The current projection for the full FY 1977, however, for "Net Gain Before Transfer" ($5,265,000) has been raised only moderately from the original budget, reflecting a conservative approach to results for the next six months, together with the possibility of some needed expansion of expense allotments for Institutional purposes. Also, the projection now reflects provision for unexpected additional plant expenditures for renovation of the Cooper-Hewitt Museum ($177,000) plus $459,000 of expenditures on the NMNH West Court construction. At the time of the preparation of the original budget it was thought the latter would fall into the recent Transition Quarter rather than FY 1977; the total of such expenditures is still within West Court construction budget estimates, but may reduce the amount available for transfers to Endowment Funds in the current year. Thus we are now estimating these will be $4,500,000. Of this amount $2,000,000 has already been transferred. [[underline]] Special Purpose Funds [[/underline]] -- At the top of Exhibit C, these funds, formerly treated in these reports as a part of restricted funds, are set out separately for the first time. Such special purpose funds include (1) monies given to particular bureaus by outside donors for their discretionary use; (2) revenues received by the bureaus for activities -- principally the NASM film theatre

-28- and Zoo parking fees (reserved for future parking facilities); and (3)the bureaus' share of gains from auxiliary activities and concessions. Such funds must be used to cover expenses of the bureaus' related activities but also to allow substantial amounts to be spent at bureau discretion -- in accordance with Institutional guidelines principally for acquisition of additional collection items and assistance with exhibits. In this category the fund balance includes reserves currently being set aside for possible payment of taxes on Magazine advertising revenues. The reserve at March 31, 1977 totaled $1,300,000. [[underline]] Restricted Funds [[/underline]] -- Income from such funds in FY 1977 is expected to drop below that of FY 1976, a year in which major gifts were received for the Bicentennial Folklife Festival. [[underline]] Balance Sheet [[/underline]] -- The overall trust funds balance sheet is shown in Exhibit D. Current high-grade, short-term investments stand at $10,622,000 as of March 31, 1977. These investments currently yield 6.4% and have an average maturity of about ten months.

-29- Exhibit A [[underline]]SMITHSONIAN INSTITUTION FINANCIAL REPORT[[/underline]] The Smithsonian Institution derives its financial support as follows: ($1,000's) [[6-column table]] [[note: text running vertically between third and fourth columns as follows: [[underline]]TRANSITION QUARTER OMITTED[[/underline]] ]] [[headers]] | [[underline]]FY 1978[[/underline]] | [[underline]]FY 1977[[/underline]] | [[underline]]FY 1976[[/underline]] | [[underline]]FY 1975[[/underline]] | [[underline]]FY 1974[[/underline]] | Congr. Req. | (Budget) | (Actual) | (Actual) | (Actual) [[/headers]] [[underline]]FOR OPERATING PURPOSES:[[/underline]] | | | | | [[underline]]FEDERAL APPROPRIATIONS[[/underline]] | | | | | Salaries and Expenses | $89,033 | $85,236* | $81,564 | $70,706 | $58,868 Smithsonian Sci. Info. Exh. | 1,977 | 1,972 | 1,940 | 1,805 | 1,695 Spec. Foreign Curr. Pgm. | [[underline]] 4,500[[/underline]] | [[underline]] 3,481[[/underline]] | [[underline]] 500[[/underline]] | [[underline]] 2,000[[/underline]] | [[underline]] 4,500[[/underline]] [[blank]] | $95,510 | $90,689 | $84,004 | $74,511 | $65,063 Research grants and contracts | 12,400 | 11,200 | 11,525 | 12,292 | 9,996 Nonfederal Funds: | | | | | Gifts (excl. gifts to endow.) | | | | | Restricted and sp. purpose | 3,200 | 3,200 | 4,595 | 4,384 | 2,093 Unrestricted purpose** | 50 | 50 | 66 | 46 | 151 Income from endow. and current funds invested | | | | | Restricted purpose | 1,800 | 1,800 | 1,634 | 1,724 | 1,751 Unrestricted purpose | 1,350 | 1,100 | 1,107 | 950 | 744 Auxiliary Activities | 5,200 | 5,735 | 3,390 | 2,308 | 1,770 Miscellaneous | [[underline]] 3,380[[/underline]] | [[underline]] 3,530[[/underline]] | [[underline]] 2,302[[/underline]] | [[underline]] 1,408[[/underline]] | [[underline]] 1,113[[/underline]] Total Operating Support | [[double underline]] 122,890[[/double underline]] | [[double underline]] 117,304[[/double underline]] | [[double underline]]$108,623[[/double underline]] | [[double underline]]$97,623[[/double underline]] | [[double underline]]$82,681[[/double underline]] | | | | | [[underline]]CONSTRUCTION FUNDS[[/underline]] | | | | | [[underline]]Federal Construction Funds: [[/underline]] | | | | | National Zoological Park | $ 1,000 | $ 6,580 | $ 8,390 | $ 9,420 | $ 3,790 Nat'l Air and Space Museum | - | - | 2,500 | 7,000 | 17,000 Other Construction | 325 | - | - | - | - Restor. and Renov. of Bldgs. | [[underline]] 9,700[[/underline]] | [[underline]] 2,950[[/underline]] | [[underline]] 1,192[[/underline]] | [[underline]] 1,490[[/underline]] | [[underline]] 1,070[[/underline]] Total Fed. Constr. Funds | [[double underline]]$11,025[[/double underline]] | [[double underline]]$ 9,530[[/double underline]] | [[double underline]]$12,082[[/double underline]] | [[double underline]]$17,910[[/double underline]] | [[double underline]]$21,860[[/double underline]] | | | | | [[underline]]Non-Fed. Plant & Land Acq. Funds:[[/underline]] | | | | | Cooper-Hewitt | $ - | $ - | $ 425 | $ 162 | $ 262 Hirshhorn Museum | - | - | - | - | 1,000 Chesapeake Bay Center | - | - | 5 | 15 | 70 Other | [[underline]] - [[/underline]] | [[underline]] - [[/underline]] | [[underline]] 100[[/underline]] | [[underline]] 10[[/underline]] | [[underline]] - [[/underline]] Total Private | [[double underline]] - [[/double underline]] | [[double underline]] - [[/double underline]] | [[double underline]] 530[[/double underline]] | [[double underline]] 187[[/double underline]] | [[double underline]] 1,352[[/double underline]] | | | | | [[underline]]ENDOWMENT FUND GIFTS AND BEQUESTS[[/underline]] | [[double underline]] $ - [[/double underline]] | [[double underline]] $ - [[/double underline]] | [[double underline]] $ 45 [[/double underline]] | [[double underline]] $ - [[/double underline]] | [[double underline]] $ 105 [[/double underline]] [[/6-column table]] [[5-column table]] [[headers]] [[underline]]NUMBER OF PERSONNEL [[/underline]] | [[underline]]3/31/77[[/underline]] | [[underline]]12/31/76[[/underline]] | [[underline]]6/30/75[[/underline]] | [[underline]]6/30/74[[/underline]] [[/headers]] Federal | 3,450 | 3,327 | 3,257 | 2,994 Trust Fund | [[underline]]1,222[[/underline]] | [[underline]]1,234[[/underline]] | [[underline]]1,182[[/underline]] | [[underline]]1,104[[/underline]] Total | 4,672 | 4,561 | 4,439 | 4,098 [[/5-column table]] [[short line]] * Includes pay supplemental approved by Congress. ** Excluding gifts to Associates (included under Revenue-producing Activities.

-30- Exhibit B [[underline]]UNRESTRICTED TRUST FUNDS - OPERATING STATEMENT[[/underline]] ($1,000's) [[line across page]] [[6-column table]] [[note: text running vertically between third and fourth columns as follows: Transition Quarter omitted ]] [[blank]] | [[underline]] Tent. Budget [[/underline]] | [[underline]] Projection [[/underline]] | [[span 3 columns]] [[underline]] ACTUAL [[/underline]] [[/span 3 columns]] [[blank]] | FY 1978 | FY 1977 | FY 1976 | FY 1975 | FY 1974 [[line across page]] Income - Investment | $ 1,350 | $ 1,100 | $ 1,107 | $ 950 | $ 744 - Gifts | 50 | 50 | 66 | 46 | 151 - Concessions & Misc. | [[underline]] 1,650[[/underline]] | [[underline]] 1,650[[/underline]] | [[underline]] 711[[/underline]] | [[underline]] 228[[/underline]] | [[underline]] 284[[/underline]] Total Income | 3,050 | 2,800 | 1,884 | 1,224 | 1,179 [[underline]]Auxiliary Activities [[/underline]] | | | | | Gross Revenue | 40,235 | 37,840 | 26,282 | 18,802 | 12,735 Less Costs and Expenses | [[underline]] 35,035[[/underline]] | [[underline]] 32,105[[/underline]] | [[underline]] 22,892[[/underline]] | [[underline]] 16,494[[/underline]] | [[underline]] 10,965[[/underline]] Total Act. Gain (Loss) | 5,200 | 5,735 | 3,390 | 2,308 | 1,770 [[underline]]Expenditures[[/underline]] | | | | | Admin. Exp/Allotments | 7,240 | 6,531 | 5,259 | 4,951 | 4,187 Less Adm. O/H Recovery | [[underline]] 5,200[[/underline]] | [[underline]] 4,881[[/underline]] | [[underline]] 4,558[[/underline]] | [[underline]] 3,644[[/underline]] | [[underline]] 3,345[[/underline]] Net Adm. Expense | 2,040 | 1,650 | 701 | 1,307 | 842 Reserve - Magazine | 1,500 | 1,000 | 480 | - | - Revenue Sharing-Int. & Act. | [[underline]] 650[[/underline]] | [[underline]] 620[[/underline]] | [[underline]] 436[[/underline]] | [[underline]] 416[[/underline]] | [[underline]] 98[[/underline]] [[underline]]Net Gain (Loss) before Trans.[[/underline]] | [[double underline]] 4,060[[/double underline]] | [[double underline]] 5,265[[/double underline]] | [[double underline]] 3,657[[/double underline]] | [[double underline]] 1,809[[/double underline]] | [[double underline]] 2,009[[/double underline]] [[underline]]Transfers[[/underline]] - To Plant Funds | 150 | 765 | 2,495 | 97 | 1,134 - To Endow. Funds | [[underline]] 3,900[[/underline]] | [[underline]] 4,500[[/underline]] | [[underline]] 1,021[[/underline]] | [[underline]] 1,422[[/underline]] | [[underline]] 100[[/underline]] [[underline]]Net Gain (Loss) after Trans.[[/underline]] | [[double underline]] 10[[/double underline]] | [[double underline]] - [[/double underline]] | [[double underline]] 141[[/double underline]] | [[double underline]] 290[[/double underline]] | [[double underline]] 775[[/double underline]] [[double underline]]Ending Fund Balance[[/double underline]] | [[double underline]]$ 4,084[[/double underline]] | [[double underline]]$ 4,074[[/double underline]] | [[double underline]]$ 3,908[[/double underline]] | [[double underline]]$ 3,767[[/double underline]] | [[double underline]]$ 3,477[[/double underline]] | | | | | [[underline]]DETAIL OF AUXILIARY ACTIVITIES[[/underline]] | | | | | [[underline]]Associates Program[[/underline]] | | | | | Magazine Income | $25,500 | $24,000 | $16,042 | $10,816 | $7,127 Gifts | 225 | 235 | 177 | 145 | 260 Other Income | [[underline]] 5,350[[/underline]] | [[underline]] 5,470[[/underline]] | [[underline]] 4,506[[/underline]] | [[underline]] 2,749[[/underline]] | [[underline]] 1,778[[/underline]] Total Income | 31,075 | 29,705 | 20,725 | 13,710 | 9,165 Expenses | [[underline]] 25,575[[/underline]] | [[underline]] 23,765[[/underline]] | [[underline]] 17,469[[/underline]] | [[underline]] 11,742[[/underline]] | [[underline]] 7,575[[/underline]] Net Gain (Loss) | 5,500 | 5,940 | 3,256 | 1,968 | 1,590 | | | | | [[underline]]Shops[[/underline]] - Income | 7,000 | 6,550 | 3,619 | 3,221 | 2,141 Expenses | [[underline]] 6,500[[/underline]] | [[underline]] 6,050[[/underline]] | [[underline]] 3,556[[/underline]] | [[underline]] 2,804[[/underline]] | [[underline]] 1,915[[/underline]] Net Gain (Loss) | 500 | 500 | 63 | 417 | 226 | | | | | | [[underline]]Press[[/underline]] - Income | 275 | 250 | 173 | 265 | 111 Expenses | [[underline]] 375[[/underline]] | [[underline]] 360[[/underline]] | [[underline]] 319[[/underline]] | [[underline]] 361[[/underline]] | [[underline]] 200[[/underline]] Net Gain (Loss) | (100) | (110) | (146) | (96) | (89) | | | | | [[underline]]Performing Arts[[/underline]] - Income | 400 | 400 | 527 | 479 | 597 Expenses | [[underline]] 600[[/underline]] | [[underline]] 625[[/underline]] | [[underline]] 637[[/underline]] | [[underline]] 558[[/underline]] | [[underline]] 493[[/underline]] Net Gain (Loss) | (200) | (225) | (110) | (79) | 104 | | | | | [[underline]]Product Devel.[[/underline]] - Income | 100 | 160 | 585 | 302 | 107 Expenses | [[underline]] 150[[/underline]] | [[underline]] 125[[/underline]] | [[underline]] 127[[/underline]] | [[underline]] 84[[/underline]] | [[underline]] 70[[/underline]] Net Gain (Loss) | (50) | 35 | 458 | 218 | 37 | | | | | [[underline]]Other[[/underline]]* - Income | 1,385 | 775 | 653 | 825 | 614 Expenses | [[underline]] 1,835[[/underline]] | [[underline]] 1,180[[/underline]] | [[underline]] 784[[/underline]] | [[underline]] 945[[/underline]] | [[underline]] 712[[/underline]] Net Gain (Loss) | (450) | (405) | (131) | (120) | (98) | | | | | [[underline]]Total Activities[[/underline]] - Income | 40,235 | 37,840 | 26,282 | 18,802 | 12,735 Expenses | [[underline]] 35,035[[/underline]] | [[underline]] 32,105[[/underline]] | [[underline]] 22,892[[/underline]] | [[underline]] 16,494[[/underline]] | [[underline]] 10,965 [[/underline]] Net Gain (Loss) | [[double underline]]$ 5,200[[/double underline]] | [[double underline]]$ 5,735[[/double underline]] | [[double underline]]$ 3,390[[/double underline]] | [[double underline]]$ 2,308[[/double underline]] | [[double underline]]$ 1,770[[/double underline]] [[/6-column table]] [[short line]] * This includes SITES, Belmont, Photo Services, Commons, Television Programs and Popular Book Publishing program.

-31- Exhibit C [[underline]]SPECIAL PURPOSE & RESTRICTED TRUST FUNDS[[/underline]] ($1,000's) [[line across page]] [[6-column table]] [[note: text running vertically between third and fourth columns as follows: Transition Quarter omitted ]] [[blank]] | [[underline]]Tent. Budget[[/underline]] | [[underline]]Proj. Actual[[/underline]] | [[span 3 columns]] [[underline]] Actual [[/underline]][[/span 3 columns]] [[blank]] | FY 1978 | FY 1977 | FY 1976 | FY 1975 | FY 1974 | [[line across page]] [[underline]]SPECIAL PURPOSE FUNDS[[/underline]] | | | | | [[underline]]INCOME[[/underline]]: | | | | | Gifts | $ 200 | $ 200 | $ 288 | $ 207 | $ 124 Sales & Other Revenue | 1,230 | 1,380 | 642 | 544 | 283 Revenue Sharing Trans. | [[underline]] 400[[/underline]] | [[underline]] 380[[/underline]] | [[underline]] 219[[/underline]] | [[underline]] 222[[/underline]] | [[underline]] 33[[/underline]] Total Income | 1,830 | 1,960 | $1,149 | $ 973 | $ 440 | | | | | [[underline]]FUNDS APPLIED[[/underline]]: | | | | | NASM - Theatres | 250 | $ 270 | $ - | $ - | $ - All Other Revolving | 300 | 250 | 225 | 164 | 120 Fluid Research | 100 | 100 | 78 | 76 | 44 Bureau Discretionary Funds | [[underline]] 600[[/underline]] | [[underline]] 586[[/underline]] | [[underline]] 640[[/underline]] | [[underline]] 265[[/underline]] | [[underline]] 88[[/underline]] Total Funds Applied | $1,250 | [[underline]]$1,206[[/underline]] | [[underline]]$ 943[[/underline]] | [[underline]]$ 505[[/underline]] | [[underline]]$ 252[[/underline]] Transfers (In) Out | | | | | - Magazine Reserve | ($1,500) | $(1,000) | $ (480) | $ - | $ - - All Other | (150) | (150) | (546) | (143) | (104) Ending Balance | [[double underline]]$6,625[[/double underline]] | [[double underline]]$4,395[[/double underline]] | [[double underline]]$2,303[[/double underline]] | [[double underline]]$1,071[[/double underline]] | [[double underline]]$ 460[[/double underline]] | | | | | [[underline]]RESTRICTED FUNDS[[/underline]] | | | | | [[underline]]INCOME[[/underline]]: | | | | | Investments | $1,800 | $1,800 | $1,634 | $1,724 | $1,751 Gifts & Grants | 3,000 | 3,000 | 4,307 | 4,177 | 1,969 Miscellaneous | 500 | 500 | 949 | 636 | 546 Interest - Transfers | [[underline]] 250[[/underline]] | [[underline]] 240[[/underline]] | [[underline]] 217[[/underline]] | [[underline]] 194[[/underline]] | [[underline]] 65[[/underline]] Total Income | $5,550 | $5,540 | $7,107 | $6,731 | $4,331 [[underline]]EXPENSES AND OTHER TRANS.[[/underline]] | $4,821 | $5,160 | $7,217 | $5,160 | 4,074 [[underline]]ENDING BALANCES[[/underline]] | [[double underline]]$5,093[[/double underline]] | [[double underline]]$4,364[[/double underline]] | [[double underline]]$4,264[[/double underline]] | [[double underline]]$4,374[[/double underline]] | [[double underline]]$2,803[[/double underline]] | | | | | [[underline]]DETAIL:[[/underline]] | | | | | | | | | | Freer Operating - Income | $1,000 | $ 970 | $1,295 | $1,022 | $1,176 -Expenses | [[underline]] 1,015[[/underline]] | [[underline]] 999[[/underline]] | [[underline]] 1,126[[/underline]] | [[underline]] 1,088[[/underline]] | [[underline]] 1,135[[/underline]] -Ending Balance | $ 150 | $ 165 | $ 294 | $ 125 | $ 191 | | | | | Cooper-Hewitt Oper.-Income | $ 800 | $ 709 | $ 217 | $ 210 | $ 134 -Expenses | 950 | 1,000 | 281 | 244 | 190 -Net Transfers(in) out | [[underline]] (150[[/underline]]) | [[underline]] (291[[/underline]]) | [[underline]] (64[[/underline]]) | [[underline]] (34[[/underline]]) | [[underline]] (170[[/underline]]) -Ending Balance | $ -0- | $ -0- | $ -0- | $ -0- | $ -0- | | | | | Arch. Am. Art Oper.-Inc. | $ 275 | $ 250 | $ 184 | $ 329| $ 199 -Expenses | [[underline]] 275[[/underline]] | [[underline]] 250[[/underline]] | [[underline]] 252[[/underline]] | [[underline]] 201[[/underline]] | [[underline]] 200[[/underline]] -Ending Balance | $ 209 | $ 209 | $ 253 | $ 321 | $ 193 | | | | | Ft. Pierce Oper.-Inc. | $ 550 | $ 550 | $ 538 | $ 526 | $ 953 -Expenses | 550 | 550 | 501 | 645 | 1,007 -Net Transfers(in) out | [[underline]] - [[/underline]] | [[underline]] 42[[/underline]] | [[underline]] - [[/underline]] | [[underline]] 26[[/underline]] | [[underline]] (300[[/underline]]) -Ending Balance | $ -0- | $ -0- | $ 42 | $ 5 | $ 150 | | | | | Hillwood Oper.-Income | $ - | $ - | $ 389 | $ 532 | $ 287 -Expenses | [[underline]] - [[/underline]] | [[underline]] 2[[/underline]] | [[underline]] 476[[/underline]] | [[underline]] 511[[/underline]] | [[underline]] 210[[/underline]] -Ending Balance | $ -0- | $ -0- | $ 11 | $ 98 | $ 77 | | | | | All Other Funds - Income | $2,675 | $2,821 | $4,267 | $3,918 | $1,517 -Expenses | 1,881 | 2,219 | 4,822 | 2,704 | 1,802 -Net Transfers(in) out | [[underline]] 50[[/underline]] | [[underline]] 149[[/underline]] | [[underline]] (394[[/underline]]) | [[underline]] (419[[/underline]]) | [[underline]] (65 [[/underline]]) -Ending Bal. | $4,734 | $3,990 | $3,664 | $3,825 | $2,192 [[/6-column table]]

-33- [[underline]] ESTIMATED TRUST FUNDS BUDGET Fiscal Year 1978 [[/underline]] In response to the request from the Senate Appropriations Subcommittee for the FY 1977 and FY 1978 Trust Fund Budgets, the following table has been prepared which, on approval of the Board of Regents, will be submitted to the Subcommittee. Since this information will be used in conjunction with the appropriation request, projected expenditures are given by bureau as well as by category of fund. This format is similar to the Source and Application table in the annual financial report which has been made available in our budget submission since 1972. Mr. Ripley emphasized that since these figures represent best estimates rather than firm allocations, the Subcommittee will be cautioned that these are projections based on past experience, which may shift significantly depending on factors outside our control. The tentative budget shown for FY 1978 is based primarily on the present level of activity. While a more precise estimate of resources will be made in the ensuing months, the tentative projections for next year show a small increase in research grants and contracts (from Federal agencies) and little change in restricted gifts and miscellaneous income. Details of the tentative FY 1978 budgets for unrestricted purpose, special purpose and restricted purpose trust funds are those shown in Exhibits A, B and C.

-34- Unrestricted endowment income may rise due to planned transfers to endowment this year. Mr. Wheeler stated that the private funds budget was included in the second section of the annual report and has included a detailed account of our finances for a number of years. The Executive Committee had reviewed this budget and recommended approval of the following motion. It was VOTED that the Board of Regents approves submission of the Estimated Trust Funds Budget for Fiscal Year 1978, as requested by the Senate and House Appropriations Subcommittees, to be used in conjunction with the pending appropriation request.

-35- SMITHSONIAN INSTITUTION FUNDS COMPARISON OF PROPOSED FY 1978 BUDGET VS. FY 1977 ESTIMATED & FY 1976 & T.Q. ACTUAL ($1,000s) 5/10/77 [[4-column table]] [[headers]] | [[blank]] | ACTUAL [[underline]]FY 1976 & T.Q.[[/underline]] | ESTIMATED [[underline]] FY 1977 [[/underline]] | PROPOSED [[underline]] FY 1978 [[/underline]] [[headers]] [[underline]]FUNDS PROVIDED[[/underline]] | | | [[underline]]Federal Appropriation[[/underline]] | | | Salaries and Expenses | 104,195 | 85,236 | 89,033 Science Information Exchange S&E | [[underline]] 2,461 | 1,972 | 1,977 [[/underline]] [[underline]]Total Federal Salaries and Expenses | 106,654 | 87,208 | 91,010 [[/underline]] [[underline]]Federal Agency Grants & Contracts[[/underline]] | 15,508 | 11,200 | 12,400 [[underline]]Trust Funds [[/underline]] | | | [[underline]]Restricted Purpose[[/underline]] | | | Gifts | 4,965 | 3,000 | 3,000 Investments | 2,137 | 1,800 | 1,800 Other | [[underline]] 686 | 500 | 500 [[/underline]] [[underline]]Total Restricted | 7,788 | 5,300 | 5,300 [[/underline]] [[underline]]Special Purpose | 1,420 | 1,580 | 1,430 [[/underline]] [[underline]]Unrestricted General Purpose[[/underline]] | | | Investment Income | 1,370 | 1,100 | 1,350 Gifts | 81 | 50 | 50 Concessions & Misc. | 1,241 | 1,650 | 1,650 Auxiliary Activities | [[underline]] 4,537 | 5,735 | 5,200 [[/underline]] [[underline]]Total Unrestricted General | 7,229 | 8,535 | 8,250 [[/underline]] TOTAL FUNDS PROVIDED | 138,599 | 113,823 | 118,390 [[line across page]] [[underline]]FUNDS APPLIED[[/underline]] | | | [[underline]]Funds Applied[[/underline]] | | | Federal Appropriation | 105,383 | 87,208 | 91,010 Federal Grants & Contracts | 15,559 | 11,200 | 12,400 Restricted Trust Funds | 8,357 | 5,020 | 4,671 Special Purpose Trust Funds | 1,248 | 1,073 | 1,200 Unrestricted Trust Funds | [[underline]] 795 | 1,140 | 1,204 [[/underline]] [[underline]]Total Funds Applied | 131,342 | 105,641 | 110,485 [[/underline]] [[underline]]TRANSFERS (In)/Out[[/underline]] | | | Federal Appropriation | 1,271 | - | - Federal Grants & Contracts | (47) | - | - Restricted Trust Funds | (179) | (100) | (100) Special Purpose Trust Funds | (1,245) | (1,400) | (2,000) Unrestricted Trust Funds--To Plant | 2,702 | 765 | 150 --To Endowment | 1,776 | 4,500 | 3,900 | --To Other | [[underline]] 1,649 | 2,130 | 2,986 [[/underline]] [[underline]]Total Transfers | 5,927 | 5,895 | 4,936 [[/underline]] [[underline]]ENDING FUND BALANCES[[/underline]] | | | Federal Appropriation | - | - | - Federal Grants & Contracts | 101 | 101 | 101 Restricted Trust Funds | 3,984 | 4,364 | 5,093 Special Purpose Trust Funds | 2,488 | 4,395 | 6,625 Unrestricted Trust Funds | 4,074 | 4,074 | 4,084 | [[line across page]] [[/4-column table]] NOTE: Excludes Special Foreign Currency Program and Construction Appropriations.

-36- SMITHSONIAN INSTITUTION FUNDS DETAIL OF FUNDS APPLIED ($1,000) p.1 [[line across page]] [[5 column table]] | | ACTUAL FY 1976 & T.Q. | ESTIMATED FY 1977 | PROPOSED FY 1978 [[underline]] SCIENCE [[/underline]] | | | | Assistant Secretary | Federal S&E | 413 | 292 | 297 | Fed Grant & Contract | 540 | 404 | 495 | Restricted | 64 | 88 | 96 | Special Purpose | 20 | - | - | Unrestricted | 7 | 1 | 2 Natl Museum of Natural History | Federal S&E | 13,277 | 11,345 | 11,652 | Fed Grant & Contract | 1,189 | 1,027 | 1,255 | Restricted | 472 | 120 | 131 | Special Purpose | 145 | 81 | 87 | Unrestricted | 46 | 56 | 60 Astrophysical Observatory | Federal S&E | 4,942 | 3,954 | 4,487 | Fed Grant & Contract | 8,517 | 7,220 | 7,942 | Restricted | 274 | - | - | Special Purpose | 37 | 2 | 2 | Unrestricted | 36 | 31 | 32 Tropical Research Institute | Federal S&E | 1,785 | 1,462 | 1,563 | Fed Grant & Contract | 1 | 9 | 12 | Restricted | 38 | 3 | 3 | Special Purpose | 37 | 26 | 32 | Unrestricted | 5 | 24 | 24 Radiation Biology Laboratory | Federal S&E | 2,057 | 1,892 | 1,926 | Fed Grant & Contract | 116 | 108 | 131 | Restricted | 11 | 12 | 14 | Special Purpose | 3 | 1 | 1 | Unrestricted | - | 2 | 2 International Programs | Federal S&E | 344 | 251 | 254 | Fed Grant & Contract | 31 | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | 6 | 1 | 1 Chesapeake Bay Center | Federal S&E | 653 | 596 | 607 | Fed Grant & Contract | 211 | 589 | 720 | Restricted | 27 | 14 | 15 | Special Purpose | 12 | - | - | Unrestricted | 45 | 45 | 45 Natl Air & Space Museum | Federal S&E | 6,933 | 6,095 | 5,786 | Fed Grant & Contract | 176 | 353 | 432 | Restricted | 265 | 5 | 6 | Special Purpose * | 252 | 435 | 437 | Unrestricted | 52 | 13 | 13 [[short horizontal line]] * Primarily for attendants at film theatre and spacearium.

-37- SMITHSONIAN INSTITUTION FUNDS DETAIL OF FUNDS APPLIED ($1,000) p.2 [[line across page]] [[5-column table]] | | ACTUAL [[underline]] FY 1976 & T.Q. [[/underline]] | ESTIMATED [[underline]] FY 1977 [[/underline]] | PROPOSED [[underline]] FY 1978 [[/underline]] [[underline]] SCIENCE [[/underline]] (Cont'd) | | | | Natl Zoological Park | Federal S&E | 7,802 | 6,958 | 7,780 | Fed Grant & Contract | 22 | 77 | 94 | Restricted | 44 | 29 | 32 | Special Purpose | 96 | 25 | 40 | Unrestricted | 40 | 45 | 48 | | | | Center for Study of Man | Federal S&E | 500 | 377 | 567 | Fed Grant & Contract | 301 | 173 | 212 | Restricted | 48 | 38 | 41 | Special Purpose | - | - | - | Unrestricted | 14 | 70 | 75 | | | | Fort Pierce | Federal S&E | - | - | - | Fed Grant & Contract | - | - | - | Restricted ** | 601 | 550 | 550 | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Internatl Environmental Science Program | Federal S&E | 383 | 373 | 375 | Fed Grant & Contract | 2 | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Science Information Exchange***] | Federal S&E | 2,461 | 1,972 | 1,977 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Other Science | Federal S&E | 154 | 390 | 450 | Fed Grant & Contract | 2,044 | 495 | 245 | Restricted | 124 | 21 | 15 | Special Purpose | 16 | - | - | Unrestricted | 71 | 79 | 60 | | | | [[single line across page]] Total Science | Federal S&E | 41,704 | 35,957 | 37,721 | Fed Grant & Contract | 13,150 | 10,455 | 11,538 | Restricted | 1,968 | 880 | 903 | Special Purpose | 618 | 570 | 599 | Unrestricted | 322 | 367 | 362 [[double line across page]] | | | | [[underline]] HISTORY & ART [[/underline]] | | | | Assistant Secretary | Federal S&E | 299 | 233 | 234 | Fed Grant & Contract | 65 | 45 | 55 | Restricted | (3) | - | - | Special Purpose | - | - | - | Unrestricted | 64 | - | - [[/5-column table]] [[short line]] ** Resources provided form endowment fund. *** Does not include expenditure of funds received by SSIE of $1,500 in FY 1976 & T.Q., $1,325 estimated in FY 1977, and $1,500 estimated in FY 1978.

-38- SMITHSONIAN INSTITUTION FUNDS DETAIL OF FUNDS APPLIED ($1,000) p.3 [[line across page]] [[5-column table]] | | ACTUAL [[underline]]FY 1976 & T.Q.[[/underline]] | ESTIMATED [[underline]] FY 1977 [[/underline]] | PROPOSED [[underline]] FY 1978 [[/underline]] [[underline]]HISTORY & ART[[/underline]] | | | | Museum of History & Technology | Federal S&E | 6,939 | 5,901 | 6,126 | Fed Grant & Contract | 59 | 5 | 7 | Restricted | 643 | 410 | 451 | Special Purpose | 135 | 125 | 150 | Unrestricted | 72 | 13 | 14 | | | | Natl Collection of Fine Arts | Federal S&E | 2,902 | 2,544 | 2,693 | Fed Grant & Contract | 19 | 55 | 67 | Restricted | 44 | 29 | 32 | Special Purpose | 164 | 175 | 100 | Unrestricted | 17 | 20 | 20 | | | | Natl Portrait Gallery | Federal S&E | 2,190 | 1,913 | 2,015 | Fed Grant & Contract | 101 | 77 | 94 | Restricted | 32 | 10 | 10 | Special Purpose | 32 | 40 | 50 | Unrestricted | 23 | 11 | 13 | | | | Hirschhorn Museum | Federal S&E | 1,999 | 1,880 | 1,958 | Fed Grant & Contract | - | - | - | Restricted | 5 | - | - | Special Purpose | 32 | 40 | 50 | Unrestricted | 16 | 18 | 17 | | | | Freer Gallery of Art | Federal S&E | 573 | 523 | 549 | Fed Grant & Contract | 47 | 20 | 24 | Restricted **** | 1,464 | 1,057 | 1,107 | Special Purpose | - | - | - | Unrestricted | - | 2 | 3 | | | | Archives of American Art | Federal S&E | 411 | 353 | 419 | Fed Grant & Contract | - | - | - | Restricted | 316 | 264 | 291 | Special Purpose | 1 | - | - | Unrestricted | - | - | - | | | | Cooper-Hewitt | Federal S&E | 342 | 366 | 377 | Fed Grant & Contract | 80 | - | - | Restricted | 685 | 1,299 | 1,017 | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | American & Folklife Studies | Federal S&E | 68 | 133 | 233 | Fed Grant & Contract | 20 | - | - | Restricted | 14 | - | - | Special Purpose | - | - | - | Unrestricted | - | 67 | 50 [[/5-column table]] [[short line]] **** Resources provided primarily from Freer endowment fund.

-39- SMITHSONIAN INSTITUTION FUNDS DETAIL OF FUNDS APPLIED ($1,000) p.4 [[line across page]] [[5-column table]] | | ACTUAL [[underline]]FY 1976 & T.Q.[[/underline]] | ESTIMATED [[underline]] FY 1977 [[/underline]] | PROPOSED [[underline]] FY 1978 [[/underline]] [[underline]]HISTORY & ART[[/underline]] (Cont'd) | | | Academic Studies | Federal S&E | 605 | 475 | 527 | Fed Grant & Contract | - | - | - | Restricted | 13 | - | - | Special Purpose | 1 | - | - | Unrestricted | - | - | - | | | | American Revolution Bicentennial Program | Federal S&E | 5,800 | 412 | - | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | 26 | - | - | | | | Woodrow Wilson Center | Federal S&E ***** | - | - | - | Fed Grant & Contract | 44 | 94 | 114 | Restricted | 655 | 432 | 476 | Special Purpose | 77 | 32 | 67 | Unrestricted | 4 | - | - | | | | Other History & Art | Federal S&E | - | - | - | Fed Grant & Contract | 1 | - | - | Restricted | 522 | - | - | Special Purpose | - | 2 | 2 | Unrestricted | 4 | - | - | | | | [[line across page]] Total History & Art | Federal S&E | 22,128 | 14,733 | 15,131 | Fed Grant & Contract | 436 | 296 | 361 | Restricted | 4,390 | 3,501 | 3,384 | Special Purpose | 442 | 414 | 419 | Unrestricted | 226 | 131 | 117 [[double line across page]] | | | | [[underline]]PUBLIC SERVICE[[/underline]] | | | | Assistant Secretary | Federal S&E | 175 | 195 | 197 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Anacostia Neighborhood Museum | Federal S&E | 667 | 542 | 608 | Fed Grant & Contract | - | - | - | Restricted | 68 | 154 | 87 | Special Purpose | 10 | 1 | 1 | Unrestricted | 24 | 19 | 20 | | | | International Exchange Service | Federal S&E | 216 | 222 | 224 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - [[/5-column table]] [[short line]] ***** Does not include separate federal appropriation to Woodrow Wilson Center.

-40- SMITHSONIAN INSTITUTION FUNDS DETAIL OF FUNDS APPLIED ($1,000) p.5 [[line across page]] [[5-column table]] | | ACTUAL [[underline]]FY 1976 & T.Q.[[/underline]] | ESTIMATED [[underline]] FY 1977 [[/underline]] | PROPOSED [[underline]] FY 1978 [[/underline]] [[underline]]PUBLIC SERVICE[[/underline]] (Cont'd) | | | | Division of Performing Arts | Federal S&E | 1,143 | 347 | 350 | Fed Grant & Contract | 1,776 | 174 | 165 | Restricted | 1,783 | 262 | 52 | Special Purpose | 22 | - | - | Unrestricted | 34 | - | - | | 1,141* | 625* | 600* | | | | Office of Public Affairs | Federal S&E | 485 | 394 | 450 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | 1 | - | - | Unrestricted | 40 | 35 | 6 | | | | SI Press | Federal S&E | 812 | 680 | 689 | Fed Grant & Contract | - | - | - | Restricted | 9 | - | - | Special Purpose | - | - | - | Unrestricted | 2 | - | - | | 501* | 360* | 375* | | | | Symposia & Seminars | Federal S&E | 67 | 44 | 45 | Fed Grant & Contract | 1 | 17 | 21 | Restricted | 43 | 113 | 126 | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Elementary & Secondary Education | Federal S&E | 133 | 133 | 135 | Fed Grant & Contract | - | - | - | Restricted | 20 | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Other Public Service | Federal S&E | - | - | - | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | 68 | - | - | Unrestricted | 1 | - | - | | | | [[line across page]] Total Public Service | Federal S&E | 3,698 | 2,557 | 2,698 | Fed Grant & Contract | 1,777 | 191 | 186 | Restricted | 1,923 | 529 | 265 | Special Purpose | 101 | 1 | 1 | Unrestricted | 101 | 54 | 26 [[double line across page]] [[/5-column table]] * Funded from auxiliary activities revenue.

-41- SMITHSONIAN INSTITUTION FUNDS DETAIL OF FUNDS APPLIED ($1,000) p.6 [[line across page]] [[5-column table]] | | ACTUAL [[underline]]FY 1976 & T.Q.[[/underline]] | ESTIMATED [[underline]] FY 1977 [[/underline]] | PROPOSED [[underline]] FY 1978 [[/underline]] [[underline]]MUSEUM PROGRAMS[[/underline]] | | | | Assistant Secretary | Federal S&E | 1,789 | 1,799 | 1,843 | Fed Grant & Contract | 24 | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | 43 | 18 | | | | Registar | Federal S&E | 220 | 96 | 97 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Conservation-Analytical Laboratory | Federal S&E | 696 | 620 | 629 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | SI Libraries | Federal S&E | 2,344 | 2,052 | 2,190 | Fed Grant & Contract | - | - | - | Restricted | 5 | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | Ofc of Exhibits Central | Federal S&E | 1,235 | 1,058 | 1,072 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | 10 | 10 | Unrestricted | - | - | - | | | | Traveling Exhibition Service | Federal S&E | 155 | 104 | 206 | Fed Grant & Contract | 170 | 243 | 298 | Restricted | 38 | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | 500* | 425* | 400* | | | | Smithsonian Archives | Federal S&E | 309 | 248 | 272 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - | | | | National Museum Act | Federal S&E | 976 | 792 | 792 | Fed Grant & Contract | - | - | - | Restricted | - | - | - | Special Purpose | - | - | - | Unrestricted | - | - | - [[5-column table]] [[short line]] * Funded from auxiliary activities revenue.

-42- SMITHSONIAN INSTITUTION FUNDS DETAIL OF FUNDS APPLIED ($1,000) p.7 [[line across page]] [[5-column table]] | | ACTUAL [[underline]]FY 1976 & T.Q.[[/underline]] | ESTIMATED [[underline]] FY 1977 [[/underline]] | PROPOSED [[underline]] FY 1978 [[/underline]] [[underline]]MUSEUM PROGRAMS[[/underline]] (Cont'd) | | | | Other Museum Programs | Federal S&E | - | - | - | Fed Grant & Contract | 2 | 15 | 17 | Restricted | 20 | 2 | - | Special Purpose | 2 | - | - | Unrestricted | 10 | - | - | | | | [[line across page]] Total Museum Programs | Federal S&E | 7,724 | 6,769 | 7,101 | Fed Grant & Contract | 196 | 258 | 315 | Restricted | 63 | 2 | - | Special Purpose | 2 | 10 | 10 | Unrestricted | 10 | 43 | 18 | | | | [[double line across page]] Buildings Management & Protection Services | Federal S&E | 23,526 | 21,921 | 22,722 | Fed Grant & Contract | - | - | - | Restricted | 2 | - | - | Special Purpose | 45 | 60 | 75 | Unrestricted | 7 | - | - | | | | Administration | Federal S&E | 6,603 | 5,271 | 5,637 | Fed Grant & Contract | - | - | - | Restricted | 11 | 108 | 119 | Special Purpose | 40 | 18 | 96 | Unrestricted | 5,899 | 5,426 | 5,881 | Less Overhead Recovery | (5,770) | (4,881) | (5,200) | | | | Transfers (In)/Out | Federal S&E | 1,271 | - | - | Fed Grant & Contract | (47) | - | - | Restricted | (179) | (100) | (100) | Special Purpose | (1,245) | (1,400) | (2,000) | Unrestricted | 6,127 | 7,395 | 7,036 [[line across page]] | | | | Grand Total Applied | Federal S&E | 106,654 | 87,208 | 91,010 | Fed Grant & Contract | 15,512 | 11,200 | 12,400 | Restricted | 8,178 | 4,920 | 4,571 | Special Purpose | 3 | (327) | (800) | Unrestricted | 6,922 | 8,535 | 8,240 | | | | [[double line across page]] ENDING FUND BALANCES | Federal S&E | -0- | -0- | -0- | Fed Grant & Contract | 101 | 101 | 101 | Restricted | 3,984 | 4,364 | 5,093 | Special Purpose | 2,488 | 4,395 | 6,625 | Unrestricted | 4,074 | 4,074 | 4,084 [[/5-column table]]

[[page number]] -43- [[/page number]] Report of the Investment [[underline]] Policy Committee [[/underline]] The Investment Policy Committee held its regular semi-annual review meeting with our three investment managers on May 6, 1977, which was attended by William A.M. Burden, Chairman, S. Dillon Ripley, Harold F. Linder, James E. Webb, William Salomon, Donald Moriarty, Charles H. Mott, T. Ames Wheeler, and Christian C. Hohenlohe. Mr. Wheeler read Mr. Burden's report and referred to the attached table and chart providing information on performance, holdings, and income of the Endowment funds. On March 31, 1977, the total market value of the Smithsonian Endowment Funds was $41,501,000, compared to $44,502,000 on December 31, 1976, and $43,897,000 on June 30, 1971, when the present managers assumed responsibility for investing these funds. Including interest and dividend income (i.e. total return), and adjusted for additions and withdrawals of capital, the percentage changes of each fund, as well as the major market indexes, are shown below: [[5-column table]] | [[underline]] Last Quarter 12/31/76-3/31/77 | Last 15 Mos. 12/31/75-3/31/77 | Last 27 Mos. 12/31/74-3/31/77 | Since Inception 6/30/71-3/31/77 [[/underline]] T. Rowe Price | -8.0% | + 5.6% | +34.6% | + 0.7% Davis, Palmer & Biggs | -3.8% | +17.4% | +40.6% | +33.4% Thorndike, Doran, P&L | [[underline]] -6.1% | +11.0% | +37.3% | + 9.6% [[/underline]] Total Smithsonian Consolidated Endowment | -5.7% | +11.8% | +38.1% | +15.3% | | | | [[underline]]Market Averages [[/underline]] | | | | DJIA | -7.7% | +12.5% | +54.6% | +27.4% S&P's 500 | -7.7% | +12.9% | +48.9% | +18.8% Value Line | -1.7% | +28.3% | +75.8% | - 2.6% [[/5-column table]]

-44- Since inception with these managers, Davis, Palmer & Biggs' performance has been superior to the market averages, while Thorndike, Doran, Paine & Lewis and T. Rowe Price have lagged behind. As a whole the Consolidated Endowment has performed only slightly less well than the Standard & Poor's 500. For the last quarter, as well as the last 15 months, Davis, Palmer did better, T. Rowe Price worse, and Thorndike, Doran about the same as the averages. The economic views of the managers are currently quite similar: namely, (1) inflation in the area of 6% in 1977 and 1978, (2) minor increases in short-term (1%-2%) and long-term (0% to 1/2%) interest rates by year-end, (3) real GNP growth of 4.5% to 5.0% this year, (4) increased capital spending, (5) corporate profits up 10-15% in 1977, and (6) some improvement, albeit not dramatic, in the stock market by the end of the year. Concern focused on the international economy rather than the domestic. The relatively poor record of T. Rowe Price has resulted from the drastic decline in price-earnings multiples for growth stocks and the substantial liquidation of these previous "core holdings" by major investment institutions. T. Rowe Price remains firmly committed to growth stocks, however, particularly small companies which are able to finance growth internally. While they do not characterize growth stocks as currently undervalued, they feel growth stock multiples, now only about 20% above those of s&P average stocks, to be well justified by anticipated higher earnings and dividends.

-45- Davis, Palmer & Biggs, currently less fully invested in equities than the other managers, is emphasizing domestic, rather than multi-national investment. They intend to build up their equity exposure in the months ahead, and are searching for low multiple stocks with low labor costs and good earnings growth which sell at a discount to book value. They currently lean toward stocks of financial and transportation companies. Thorndike, Doran, Paine & Lewis is more heavily committed to equities with individual stock objectives rather similar to those of Davis, Palmer. The Committee feels that despite the disappointing performance of T. Rowe Price, and to a lesser extent of Thorndike, Doran, no change in managers should be made at this time. It was generally felt that the liquidation by institutional holders of the growth stocks favored by T. Rowe Price is probably nearing an end and that there may well be a significant test of the value of these stocks over the next few months. It was agreed that in the months ahead, planned further additions to endowment of some $2.5 million by September would be directed to the funds managed by Davis, Palmer & Biggs, as has been done with the money transferred so far this year. The Chancellor commented that the Investment Policy Committee, chaired by William A. M. Burden, keeps in close touch with these funds and their managers. Mr. Burden feels that our results are comparable to the majority.

-46- SMITHSONIAN INSTITUTION [[underline]]INVESTMENT FUNDS SUMMARY[[/underline]] ($1,000) Market Value [[6-column table]] | Jun 30, 1971 | Dec 31, 1974 | Dec 31, 1975 | Dec 31, 1976 | Mar 31, 1977 [[underline]]T. ROWE PRICE & ASSOCIATES[[/underline]] | | | | | Cash | 14 -% | 1,395 13% | 6 -% | (5) -% | 27 -% Bonds | 4,124 29 | 1,436 13 | 1,807 15 | 545 4 | 537 4 Cv Bds & Pfd | 634 5 | 1,719 17 | 1,782 14 | 1,686 12 | 1,558 13 Common Stock | [[underline]] 9,333 66 | 5,752 56 | 8,801 71 | 11,283 84 | 10,126 83[[/underline]] Total | [[double underline]]14,105 100% | 10,302 100% | 12,396 100% | 13,509 100% | 12,248 100%[[/double underline]] Value Index | 100.0 | 62.9 | 79.6 | 89.9 | 80.4 Total Accomp. | 100.0 | 74.8 | 95.4 | 109.5 | 100.7 Div + Int/Yr | 532 - 3.8% Mkt. | 575 - 5.6% Mkt. | 481 - 3.9% Mkt. | 415 - 3.1% Mkt. | 431 - 3.5% Mkt. Tot Ret Inc/Yr | - | 741 - 7.2% Mkt. | 692 - 5.6% Mkt. | 685 - 5.1% Mkt. | 685 - 5.6% Mkt. | | | | | [[underline]] DAVIS, PALMER & BIGGS[[/underline]] | | | | | Cash | 31 -% | 1,062 9% | 347 2% | 687 4% | 997 6% Bonds | 1,018 14 | 3,524 30 | 3,331 25 | 3,114 17 | 3,059 18 Cv Bds & Pfd | 309 5 | 440 4 | 702 5 | 1,234 7 | 1,292 7 Common Stock | [[underline]]5,809 81 | 6,626 57 | 9,165 68 | 13,062 72 | 12,007 69[[/underline]] Total | [[double underline]]7,167 100% | 11,652 100% | 13,545 100% | 18,097 100% | 17,355 100%[[/double underline]] Value Index | 100.0 | 84.3 | 97.0 | 116.4 | 109.5 Total Accomp. | 100.0 | 94.9 | 113.6 | 138.6 | 133.4 Div + Int/Yr | 276 - 3.9% Mkt. | 736 - 6.3% Mkt. | 693 - 5.1% Mkt. | 802 - 4.4% Mkt. | 836 - 4.8% Mkt. Tot Ret Inc/Yr | - | 696 - 6.0% Mkt. | 743 - 5.5% Mkt. | 786 - 4.3% Mkt. | 786 - 4.5% Mkt. | | | | | [[underline]]THORNDIKE, DORAN, PAINE & LEWIS[[/underline]] | | | | | Cash | 4 -% | 852 9% | 244 2% | 193 2% | 91 1% Bonds | 5,262 47 | 2,109 21 | 2,158 19 | 1,873 14 | 1,842 15 Cv Bds & Pfd | 529 5 | - - | - - | 217 2 | 467 4 Common Stock | [[underline]] 5,300 48 | 6,842 70 | 9,107 79 | 10,513 82 | 9,498 80[[/underline]] Total | [[double underline]]11,095 100% | 9,803 100% | 11,509 100% | 12,796 100% | 11,898 100%[[/double underline]] Value Index | 100.0 | 66.0 | 80.9 | 94.5 | 86.1 Total Accomp. | 100.0 | 79.8 | 98.7 | 116.7 | 109.6 Div + Int/Yr | 526 - 4.7% Mkt. | 538 - 5.5% Mkt. | 490 - 4.3% Mkt. | 511 - 4.0% Mkt. | 530 - 4.5% Mkt. Tot Ret Inc/Yr | - | 664 - 6.8% Mkt. | 656 - 5.7% Mkt. | 629 - 4.9% Mkt. | 629 - 5.3% Mkt. | | | | | [[underline]]TOTAL SMITHSONIAN CONSOLIDATED ENDOWMENT[[/underline]] | | | | | Cash | 49 0% | 3,309 10% | 597 2% | 875 2% | 1,115 3% Bonds | 10,404 24 | 7,069 22 | 7,296 19 | 5,532 12 | 5,438 13 Cv Bds & Pfd | 1,472 3 | 2,159 7 | 2,484 7 | 3,137 7 | 3,317 8 Common Stock | [[underline]]31,972 73 | 19,220 61 | 27,073 72 | 34,858 79 | 31,631 76[[/underline]] Total* | [[double underline]] 43,897*** 100% | 31,757 100% | 37,450 100% | 44,402 100% | 41,501 100%[[/double underline]] Value Index | 100.0 | 71.2 | 86.1 | 100.7 | 92.4 Total Accomp. | 100.0 | 83.5 | 103.1 | 122.3 | 115.3 Div + Int/Yr | 1,741 - 4.0% Mkt. | 1,849 - 5.8% Mkt. | 1,664 - 4.4% Mkt. | 1,728 - 3.9% Mkt. | 1,797 - 4.3% Mkt. Tot Ret Inc/Yr | - | 2,101 - 6.6% Mkt. | 2,091 - 5.6% Mkt. | 2,100 - 4.7% Mkt. | 2,100 - 5.1% Mkt. | | | | | *Includes Freer Fd | 18,805 | 12,259 | 14,420 | 16,318 | 15,098 Consolidated Fd** | 12,765 | 9,997 | 11,682 | 15,159 | 14,409 Endowment #3 | [[underline]]12,327*** | 9,501 | 11,348 | 12,925 | 11,994[[/underline]] Total | [[double underline]]43,897 | 31,757 | 37,450 | 44,402 | 41,501[[/double underline]] | | | | | [[underline]]STOCK MARKET AVERAGES - TOTAL ACCOMPLISHMENT INDEX 6/30/71 - 100[[/underline]] | | | | | D-J Industrials | 100.0 | 82.4 | 113.2 | 138.1 | 127.4 S&P's 500 Stocks | 100.0 | 79.8 | 105.2 | 128.7 | 118.8 Value Line Comp. | 100.0 | 55.4 | 75.9 | 99.1 | 97.4 [[underline]]STOCK MARKET AVERAGES - VALUE INDEX (Excluding Dividends & Interest Yield - 6/30/71 = 100)[[/underline]] | | | | | D-J Industrials | 100.0 (891.14) | 69.16 (616.24) | 95.6 (852.41) | 112.7 (1004.65) | 103.1 (919.13) S&P's 500 Stocks | 100.0 (99.70) | 68.78 (68.56) | 90.4 (90.19) | 107.8 (107.46) | 98.7 (98.42) Value Line Comp. | 100.0 (116.31) | 42.10 (48.97) | 60.7 (70.69) | 80.4 (93.47) | 77.7 (90.34) [[/6-column table]] ** Includes Special Endowment Fund. *** Includes portion of Johnson & Johnson stock held in Treasurer's Office.

[[image: line graph of investments over the years 1972-1977. Graph is labeled SMITHSONIAN INSTITUTION Consolidated Fund Total Accomplishment Index.]]

-48- [[underline]] Policy Relating to Use of Trust and Federal Funds [[/underline]] Mr. Ripley explained that at the meeting of the Executive Committee he had reported that the Senate Subcommittee on Appropriations had requested a statement concerning the Smithsonian Institution policies governing the use of Federally appropriated funds, federally and privately financed contracts and grants, and Trust funds. This subject was one of four major issues raised in the GAO Report, and the Executive Committee requested the Regents to consider this draft in advance for further discussion. Mr. Webb stated that the Executive Committee had considerable discussion at its meeting to see how this request could be met. He said we are aware that there are certain Congressional members and others who question many parts of the procedure we are following so that this first preliminary draft should be reviewed carefully so as to explain how we handle these funds. Judge Higginbotham cautioned that reference to the policy related to building up an endowment fund must carefully explain the need for such funds. Senator Jackson commented about the importance of this document being reviewed by Mr. Hughes and the Audit and Review Committee, with a further draft to be submitted to the Board of Regents. The Chancellor stated that this document would ultimately be the policy stipulated by the Board of Regents, to be submitted to the Senate Subcommittee on Appropriations. Mr. Ripley welcomed the efforts of the Regents in undertaking this policy review. The preliminary draft of the policy statement follows.

-49- [[underline]] PRELIMINARY DRAFT [[/underline]] SMITHSONIAN INSTITUTION POLICIES GOVERNING THE USE OF FEDERALLY APPROPRIATED FUNDS; FEDERALLY AND PRIVATELY FINANCED CONTRACTS AND GRANTS; AND TRUST FUNDS To appraise Smithsonian policies on the various categories of funds made available to us, it is first necessary to review briefly the history of the Institution's financial support. Since its establishment in 1846, the Board of Regents have exercises its statutory authority over the uses of the Institution's trust fund income. Beginning with the original Smithson bequest of $542,000, the trust fund endowment has been augmented by others gifts and bequests, principally for specified or restricted purposes. All funds of the Institution are administered, under the direction of the Board of Regents, subject to the terms and conditions required by their sources: Federal appropriations, Federally and privately financed contracts and grants, and trust funds. In 1857, Congress first appropriated funds to the Institution for receiving and installing and caring for the national collections of scientific, historical, and art objects. Based on the assurance of continuing Federal support, the Regents agreed that the Smithsonian would accept responsibility as curator of the national collections. The construction of the original Smithsonian Building in 1847-1855 was funded from the accrued interest on the Smithson bequest. Subsequently, the Congress appropriated funds for constructing and staffing the present Arts and Industries Building, and by 1883

-50- Smithsonian's Federal appropriations had increased to about 80 percent of the Institution's total operating support. It has remained around that proportion until the present time. Beginning in about 1950, a new source of support began to be received in the form of grants and contracts from government agencies to fund a great variety of special scientific projects. After reaching a peak in the late 1960's, these grant and contract funds have tended to remain relatively constant. The level of these grant funds, combined with a steady growth of Federal appropriations, has not been matched by a similar growth of trust funds. Gifts and grants from private sources for restricted purposes have increased steadily, but there has been no corresponding additions to unrestricted trust funds. As a result, a definite policy has been adopted by the Board of Regents to rebuild unrestricted trust fund support for the Institution to a proportion more closely approximating that which had existed in earlier years. The Institution has, therefore, three major groups of funds: -- Federal Appropriations -- Contracts and Grants -- Trust Funds. Concerning each of these groupings, it should be noted that employees are either on the Federal roll or on the trust rolls of the Institution, depending on the sources of funds of the activities in which they are engaged. The funding of employment for supporting services reflects this same principle. Employee salaries and benefits

-51- are kept at commensurate levels between the Federal and trust fund rolls. The use of funds for various purposes is discussed below. [[underline]] Federal Funds [[/underline]] It is Smithsonian policy to request Federal appropriations in support of basic research and the care, maintenance, exhibition and study of the national collections. The Institution may also request appropriated funds for construction, renovation, maintenance and protection of the buildings necessary for the collections, including those buildings originally built with trust funds. Federal appropriations support the core staff of scientists, historians, and curators of the collections, the maintenance and use of the collections, as well as their guarding and conservation. Administrative support staff on both Federal and trust rolls share the continuing responsibility for administering these activities. Institution staff paid from appropriated funds are subject to civil service regulations. Of the approximate 4,600 Smithsonian employees, about 73 percent or 3,372 are on the Federal roll as of April 1977. [[underline]] Grants and Contracts [[/underline]] It is the policy of the Institution to encourage its bureaus to seek grants or contracts from private foundations or from government agencies to assist in the financing of special scientific research and educational programs. At the same time, many government agencies request professional assistance on projects in which they have a particular interest. For example, the Smithsonian Astrophysical

-52- Observatory performs extensive scientific research work in support of NASA's mission. Smithsonian curators or scientists act as principal investigators under many of these grants and contracts, but, in cases of Federal employees, receive no additional compensation from the grants or contracts themselves. Where the grant or contract provides for additional assistance to carry out the project, such employees are hired on the trust fund roll to perform the services stipulated in the particular grant or contract. The contract or grant may also include funds for supplies, equipment, travel and other incidental expenses. Such grants and contracts include provision for paying the indirect costs of administering them. The employees, for the most part, are appointed for a limited term, usually limited to the period of the contract or grant. Some 7 percent of employees, or 303, are directly employed under grants and contracts. The grants and contract funds are administered by the Institution in its capacity as a trust organization and are accounted for separately within the trust fund accounts. [[underline]] Smithsonian Trust Funds [[/underline]] [[underline]] Restricted Purpose Funds [[/underline]] - These funds, derived from restricted gifts, bequests, grants, endowment funds, and miscellaneous fund raising activities for individual museum programs, must be and are used exclusively for the purposes specified. Trust fund income from the Freer endowment, for example, supports a substantial portion of the costs of the Freer Gallery of Art. Restricted purpose gifts and other income have been received for such projects as the recent banking

-53- exhibit and parts of a new Marine Hall in the Museum of History and Technology, special catalogues for exhibits, and have contributed to the support of last year's Folklife Festival, and the operations of Cooper-Hewitt Museum and the Archives of American Art. Such funds also made possible all of the purchases of land for the Chesapeake Bay Center, the construction of the new Insect Zoo in the Natural History Museum, and the renovation of the Carnegie Mansion for the Cooper-Hewitt in New York. About 2 percent, 72 employees, are paid from these funds. [[underline]] Special Purpose Funds [[/underline]] - Funds deriving from other sources, such as parking fees at the Zoo, and tickets for the film showings at the National Air and Space Museum,are dedicated for special future purposes. In the case of Zoo parking fees, they are being held for future parking improvements at the Zoo. Income from certain relatively minor revenue-producing activities of the various bureaus, including membership drives, auctions or other fund raising efforts, is reserved for the use of the individual bureau. In addition, it is the policy of the Institution to allocate to the individual museum a portion of the proceeds of concessions and shops in the museum with the understanding that these are to be used principally for purchases for its collections or for support of its exhibits. Any special allocation to a bureau from the Institution's unrestricted funds is also designated as special purpose funds. One percent, or 55 employees (primarily attendants at the NASM theatre), are paid from Special Purpose Funds.

-54- [[underline]] Unrestricted Purpose Funds [[/underline]] - Included within this category of the Institution's budget are the auxiliary activities such as the Associates Program (which includes the [[underline]] Smithsonian [[/underline]] Magazine), the Museum shops, restaurant and parking concessions, and a portion of the central administrative staff described below. About 17% (792 employees) are paid from these funds. The limited size of unrestricted income prior to fiscal year 1973 permitted little or no discretion to Smithsonian management or its Board of Regents in their use. Some growth of these funds in the last few years has enabled the Regents and the Institution to act on support of additional high-priority needs. For example, public service activities such as the recent construction in the West Court of the Natural History Building have been completed; and major improvements to the Museum Shops were made possible. Estimated budgets for the use of unrestricted funds are approved by the Board of Regents annually. Currently, the Regents have approved as their first priority a program of building up the Institution's small unrestricted endowment funds. Given a very long history of precarious trust fund support, the small size of the endowment funds requires that the Institution prudently should strengthen its resources as a hedge against continuing inflation and other unpredictable effects of economic uncertainty. Under this policy the unrestricted funds received in FY 1977 and future years will be dedicated largely to building the endowment funds. Special consideration will be given, however, to expanding

-55- the Institution's existing educational efforts through the Regional Associate Programs, planning valuable Public Broadcasting Service TV programs, a Smithsonian Science lecture-in-the-school series, or popular publication efforts. Other public service programs such as summer scholarships, additional support for the Folklife Festival, or further outreach activities may be possible. New areas for research such as solar conversion equipment testing or hydrogen energy studies may provide opportunities for Smithsonian development support. [[underline]] Administrative Support [[/underline]] Since the administration of all of the activities of the Institution covers both Federally funded and trust fund bureaus and offices, it is Institution policy that administrative work and costs are shared between Federal funds and trust funds. For these administrative services, including accounting, legal, personnel, procurement, and other activities, the allocation of costs corresponds closely to the proportion between the Institution's Federal and trust fund operating expenditures. Federal and trust fund employees working in administration are included in the totals for Federal and unrestricted trust funds shown above. This policy of carrying out administrative work with both Federal and trust fund employees roughly in proportion to the relative burden of the activities being administered has proven most efficient, and is reflected in the approved allocation of administrative expenses as audited annually for grants and contracts by the Defense Contract Audit Agency.

-56- [[underline]] Provision of Information [[/underline]] In addition to providing complete reports annually on all Institution activities and finances, it is the Institution's policy to advise the Office of Management and Budget and the Congress in advance of any significant new Institutional undertaking which may possibly lead to requests for future Federal appropriation support. Also, estimated projections of the Institution's trust fund activity for the fiscal year under review will be included with the annual request for Federal appropriations, after review by the Board of Regents.

-57- [[underline]] Museum of African Art [[/underline]] The Chancellor recalled that Dr. Haskins had agreed to chair a subcommittee of the Regents established to study the desirability of the Smithsonian acquiring the Museum of African Art. He also recalled that there was a general feeling among the Regents that we should be governed largely by what the Members of the House and Senate thought about this. Dr. Haskins, Chairman of the [[underline]] ad hoc [[/underline]] Committee of the Board of Regents, had sent out in advance of the Executive Committee meeting a report unanimously recommending acquisition of the Museum, with four stated conditions (attached). The report had been approved as written by Dr. Haskins, Senator Goldwater and Mrs. Boggs. Judge Higginbotham also expressed his agreement with the report, adding that he is sufficiently in favor of acquiring the Museum to recommend further that if the Smithsonian were not to receive an adequate appropriation for the Museum's operating costs, the Institution consider reprogramming Federal funds from lower priority Smithsonian activities rather than cancelling the acquisition outright. Consideration of the summary of the report revealed that the proposed resolution was intended to set up a mode of action without trying to put in any time factors at this time.

-58- The Chancellor asked if we are able to say now, assuming we went ahead today, what amount of funds we might be requesting from Congress five years from now. Mr. Blitzer said that annual operating costs were estimated at $800,000 for the first full year. It was pointed out that certain of the conditions to which any agreement might be subject point out the need to study the operations of the Museum. For example, there should be serious consideration of integrating parts of the Museum activities with other existing Smithsonian activities, such as conservation, the archives and the library. Furthermore, there might be some disposition of parts of the real estate. These factors contribute to the uncertainty of the budget five years hence. It seems to Mr. Blitzer very unlikely that apart from inflation, there would be major increases. Mr. Higginbotham called attention to the footnote appearing on the first page of Mr. Haskins' report and repeated it to the members as follows: "Committee member Mr. Higginbotham recommends that if adequate appropriations are not forthcoming, the Institution seek to reprogram necessary funds from lower priority activities rather than cancelling the acquisition of the Museum." Mr. Higginbotham continued that it seems to him the ideal resolution would be to authorize the Secretary to negotiate, subject

-59- to the approval of the Board. He said the Regents have had discussions for a substantial period of time, and it is his impression that we are at the point now with the Museum of African Art where further discussions of interest would not be helpful; we must get specific in terms of structure. He also pointed out that, if this Museum is as valuable as everyone seems to suggest, and if it is a bad time to seek Congressional approval, he is not convinced that we have no other alternative, although Congressional support is preferred. He said that our unrestricted trust funds have gone up in the past three years from $100,000 to $4,500,000, not an insignificant figure. It appears to Mr. Higginbotham that we should try to get Congressional appropriations but if we do not, we may want to see if there are any other options under which we can have a relationship. He said we are talking about a $500,000 to $800,000 annual cost of this operation in a $100 million budget. Mr. Ripley commented that one of the vital provisions necessary in further consideration of this project is the need for some kind of authorizing legislation. The present temper of Congress seems to be against our taking on an obligation irrespective of whether it is financed with trust funds or otherwise. The Congress would like to see us come before a committee and state our intentions, and we would like to do this.

-60- Senator Jackson suggested that the Regents might say that the resolution and report were received and discussed and deferred to the next meeting. He stated that the procedures which will develop from the Audit and Review Committee report and recommendations are relevant to this matter of starting a project with private funds and then requesting Federal funds to support it. Mr. Webb proposed a change in the resolution which could authorize the Secretary to enter into an agreement with the Museum of African Art for a joint presentation of a request for authorization so that the terms and conditions might be settled under which the Museum authorities will jointly present to the Congress a request that the Smithsonian be authorized to undertake this Museum. Mr. Higginbotham felt that a joint presentation could possibly cause us to have political problems. Mr. Haskins advised the Board that he had received a letter from Mr. Warren Robbins, dated May 11, 1977, stating that Mr. Robbins is reconsidering some of the arrangements the Committee had discussed as possibilities. Mrs. Boggs commented that in the letter received from Mr. Robbins are some of the objections that he still has to our conclusions. Mr. Robbins pointed out why the Museum, as is, should be kept intact geographically and also as an institution.

-61- He said it is an art museum, a humanistic museum, an interdisciplinary pedagogical institution, a prototype project, a resource center, a higher education facility, an adjunct to diplomacy, a center utilized frequently by Members of Congress and their staffs to inform their own constituencies, an historic house with a living museum, and an instrument for press and media education. He feels that breaking up this particular kind of complex at the moment would be very difficult. Mrs. Boggs continued by quoting the following from Mr. Robbins' letter: "The alternative I would suggest would be that the time and energy saved by the Smithsonian's assumption of the Museum's basic operating costs, be utilized by me and the members of our Board to raise funds and eventually an endowment for the maintenance of the properties in question. . . . A last point, concerning the long range: we certainly recognize the inevitability of having the entire Museum incorporated physically into any new Smithsonian Museum complex that might be created (i.e. Museum of Man)." Mrs. Boggs feels that the Smithsonian has some negotiating to do with Mr. Robbins and his Board of Trustees. The Chancellor suggested that the subject be remanded to the Committee to continue its discussions with the Museum of African Art, since the receipt of the letter of May 11 from Mr. Robbins introduced a new element to the Board which must be considered by the Committee.

-62- Mrs. Boggs stated that the Museum of African Art obviously needed to know the views of the Smithsonian and that we should proceed was expeditiously as possible. She would hope that this Board could save this remarkable Museum and incorporate it into the Smithsonian because we do lack this particular part of history, art and culture that is so essential not only to this generation but to continuing generations of Americans. Mr. Mahon said we would want to make sure that the right atmosphere exists in the House and Senate for the acceptance of this project and that we should be certain that the proposal would receive sympathetic consideration. He did not know what the response would be at this time. There was a general concurrence in this opinion. Mr. Higginbotham reiterated that he hoped a satisfactory conclusion could be reached with the Congress and the Museum of African Art but, should not be possible, he wanted to recommend the sense of his footnote (page 58) as a consideration for the future. The Board concluded the discussion with the following motion which was approved: VOTED that the Board of regents expresses its strong continuing interest in acquiring the Museum of African Art and remands to the [[underlined]]ad hoc[[/underlined]] Committee studying this matter under the Chairmanship of Dr. Haskins, authority to continue discussions with the officials of the Museum of African Art and interested Members of Congress which could lead to possible authorizing legislation for this purpose at an appropriate time.

-63- [[underline]]REPORT ON THE MUSEUM OF AFRICAN ART[[/underline]] [[underline]]Recommendation[[/underline]] The [[underline]]ad hoc[[/underline]] committee of the Board of Regents appointed to study the possible acquisition by the Smithsonian of the Museum of African Art unanimously recommends by this report that the Institution enter into negotiations to acquire the Museum. The following resolution is proposed for the Board's adoption: VOTED that the Board of Regents authorizes the Secretary to execute an Agreement with officials of the Museum of African Art to acquire that Museum as part of the Smithsonian Institution. The committee further recommends that such an agreement be subject to the following conditions agreed upon at the January 25, 1977 meeting of the Board of Regents: (1) That appropriate Congressional approval, either in the form of authorizing legislation or some other expression of concurrence, be secured; (2) That the assumption of responsibility by the Smithsonian be made contingent upon receipt of adequate appropriations;* *Committee member Mr. Higginbotham recommends that if adequate appropriations are not forthcoming, the Institution seek to reprogram necessary funds from lower priority activities rather than cancelling the acquisition of the Museum.

-64- (3) That the policies and administration of the Museum be under the Regents and Secretary with, at most, an advisory board representing the present trustees; and (4) That the Regents and Secretary be free in the future to make whatever use they deem appropriate of the collections, real estate and other assets of the Museum. Finally, the committee recommends that the Secretary make clear to the Congress and to the Museum of African Art the Smithsonian's intention to study the operation of the Museum with a view to possibly integrating certain of its functions elsewhere within the Smithsonian, and selling that portion of the Museum's current real estate which would then no longer be necessary to the effective operation of the Museum. [[underline]]General Conditions[[/underline]] At the outset we note that one of the few serious gaps in the coverage of art in the national museums of the Smithsonian is that of the Continent of Africa. Elsewhere within the Institution the visitor and scholar alike can find worthy presentations of the art of Europe, of the Americas, and of the Near and Far East -- but not of Africa. During the last few years it has been belatedly recognized that African art is indeed one of the major art traditions of the world, one whose rediscovery in the West

-65- can be traced in the work of some of this century's greatest artists. Consequently, other major museums around the country have moved decisively to fill similar gaps in their own collections. For its own part, unless the Smithsonian acts to seize the unique opportunity afforded by the interest of the Museum of African Art in joining the Institution, we will likely lose our one best chance to involve ourselves in any major way in this important area of art scholarship and education. This is not to suggest, however, that the simple acquisition of the Museum of African Art's collection is what we recommend. Independent of the consideration that these collections could not find an appropriate home within the Smithsonian's National Museum of Natural History, National Collection of Fine Arts, Hirshhorn Museum or any other existing bureau, is the fact that the Museum of African Art as an institution in its own right is highly regarded in the museum profession and recognized as one of the more significant and relevant cultural resources in the city of Washington. It is the Museum as a living and dynamic organization which we propose be acquired. In recommending the course of action detailed herein, the committee is of the belief that the success of the Museum of African Art and its promise for further important contributions to the understanding of the art of the African Continent has been based

-66- substantially upon the interplay between its excellent collection of objects, its dedicated staff, its corollary collections of photographic and reference materials, its ambitious education programs, and the ambience of its physical setting and exhibition space. We believe that our proposal, which might physically separate some of these elements, will nonetheless retain this interplay and in fact expand it through integration of certain parts of the Museum with other Smithsonian bureaus. This twin prospect of acquiring the Museum of African Art and providing for a close working relationship between it and various other units of the Institution is one which the committee welcomes and heartily endorses. [[underline]]Historical Background[[/underline]] The Frederick Douglass Museum of African Art was established in 1964 by Mr. Warren Robbins, who had built a small personal collection of African Art works during his service abroad. In the following twelve years the Museum's collection has grown to more than 7,000 objects, with several significant further donations possible if the Museum's future is assured. Nearly all countries of Black Africa are represented in the collection, with the cultures of Zaire, Ghana, Nigeria and Mali most strongly represented. The great majority of the African art objects are in three-dimensional media (wood, ivory, and stone carving, pottery, metal casting) and are valued at from four to six million dollars.

-67- Dr. Gordon Gibson of the Smithsonian's Museum of Natural History's Anthropology Department reviewed the collections of the Museum of African Art in some detail two years ago. According to his report, which compared the Museum of African Art's collection to the African holdings of the Museum of Natural History, "The types of materials represented in the two collections differ significantly: Those in the NMNH cover all aspects of traditional life, while those of the MAA are concentrated chiefly in art of styles first produced mainly for magical and religious purposes . . . the two collections together would form one of the best assemblages of African ethnographic material in the United States." Also of note is the world's largest collection of paintings by Black American artists of the 19th Century, particularly the works of Henry O. Tanner and Edward M. Bannister. Since its founding the Museum's physical plant, which originally consisted of the historic Frederick Douglass House at 316 A Street, N.E., on Capitol Hill, has grown to include eight of the nine row houses immediately adjacent. (The owner of the ninth, which abuts the Frederick Douglass House, has recently died and the Museum is keen to buy that additional property.) These buildings currently house the Museum's galleries, offices, laboratories and sales shop. In addition, the Museum owns 16 garages and one carriage house used

-68- for storage and exhibit assembly space immediately behind the Frederick Douglass House. The Museum has spent some $400,000 over the years on physical improvements to these various structures, including about $300,000 to modernize the Frederick Douglass House for museum use. The Museum's mortgage liability totals about $82,000 for six structures. The entire physical plant purchased originally for $457,000 is not estimated to be worth well over $1 million. Mr. Robbins is the Museum's director, relying on the policy guidance of a Board of Trustees. In addition, the Museum has a "National Council," chaired by Senator Hubert Humphrey, which offers advice and support. The Museum's library consists of some 5,000 items. Pictorial materials include the important Eliot Elisofon Collection, consisting of more than 100,000 color slides, black and white prints and negatives, motion picture films and the like primarily concerned with Africa, which were willed to the Museum. The staff of the Museum numbers about 33 full and part time members, against a projected ideal level of 40. The Museum of African Art has become noted for its highly professional programs of exhibition, education, and extended service to the public. Each year hundreds of school groups from the Washington metropolitan area are given conducted tours of the Museum; staff lectures

-69- and orientation sessions are given for varied adult organizations; art and dance classes, craft workshops and demonstration sessions are held as well. Supplementing its education program at the Museum, extension activities in school classrooms and auditoriums widen the Museum's audience considerably. In addition, the staff has created study guides, pamphlets, teacher's aids and catalogs to increase the educational opportunities afforded by the Museum. Museum staff teach several college level classes in area universities and provide consultative services to other museums interested in African art. During Fiscal Year 1976, approximately 100,000 persons visited the Museum. In the fall of 1974 Warren Robbins first approached the Smithsonian with a proposal that his museum become part of the Institution. At its May 14, 1975 meeting, the Board of Regents approved a resolution authorizing the Secretary to undertake exploratory discussions with the Museum of African Art, the Office of Management and Budget, and appropriate Members of Congress in order to prepare recommendations on the possible acquisition of this museum. Those discussions indicated that while the Museum of African Art was held in high esteem, the time was not auspicious for seeking the appropriate funds which would be necessary to support the Smithsonian's

-70- administration of the Museum. Accordingly, at its September 30, 1975 meeting, the Board of Regents voted to table its earlier resolution. At the May 10, 1976 meeting of the Board of Regents, the Chancellor introduced a letter he had received from Warren Robbins again proposing acquisition of the Museum of African Art by the Smithsonian. The letter was accompanied by the endorsements of approximately 120 members of the House of Representatives and 36 members of the Senate. The ensuing discussion recognized that while the Museum's various assets had substantial intrinsic and cultural value, further study of the proposed merger was required before a prudent decision could be made. Accordingly, the Chancellor appointed this [[underline]] ad hoc [[/underline]] committee to study the acquisition of the Museum of African Art and to report its findings to the full Board. Committee chairman Mr. Haskins reported at the Board's January 25, 1977 meeting that while the committee had not yet reached a decision as to its recommendation on the ultimate question, it had agreed upon four essential preconditions to any Agreement executed with the Museum of African Art. These conditions which were supported by the Board, are reiterated in theabove recommendation and provide the conceptual framework around which the remainder of this discussion is organized.

-71- [[underline]] Congressional Approvals [[/underline]] It is clear, given recent expressions of concern by various Members of Congress and certain of the conclusions of the GAO audit report of March 31, 1977, that new programs of appreciable size which are likely to require subsequent Federal appropriations should at the very least be brought to the attention of the appropriate Committees of the Congress before the Smithsonian undertakes them. The Museum of African Art certainly fits this category. It is equally clear that the Smithsonian would not want unilaterally to assume responsibility for the financial well-being of the Museum without assurance of the willingness of the Congress to provide adequate appropriations to support the Museum. The Committee discussed various ways by which to achieve this two-fold objective, that of informing the Congress of our intent and securing an indication of its support. It is the [[underline]] ad hoc [[/underline]] committee's opinion that a procedure more formal than simply seeking the signature of individual Members on a circulating letter, but less time consuming and potentially restrictive than an authorizing bill, should be sought. Thus the committee recommends that, upon approval by the Board of Regents of the above resolution and determination by the Secretary that an agreement in conformance with that resolution can be reached, Congressional Members of the Board of Regents together with Senator Humphrey and other willing sponsors be asked to introduce a

-72- Concurrent Resolution in the House and the Senate expressing the sense of the Congress that it would welcome the acquisition. [[underline]] Adequate Appropriations [[/underline]] Smithsonian staff currently estimate that were the Institution to assume responsibility for the Museum of African Art at the beginning of Fiscal Year 1979 (October 1, 1978), an amount of approximately, $800,000 and 30 federal positions, not including temporary and part-time personnel, should be included in the Institution's budget request to the Office of Management and Budget in September, 1977. This figure, with which Warren Robbins generally concurs, comprises some $700,000 for necessary "salaries and expenses," plus needed improvements to the Museum's physical plant to ensure its satisfactory condition. In Fiscal Year 1976, the last complete budget year, the Museum spent approximately $500,000. The difference between these figures represents some staff growth, the application of Federal pay scales, a modest increase for security, and an estimate for intervening inflation. With the expiration of a five year grant from the National Endowment for the Humanities at the beginning of Fiscal Year 1976, one of the major underpinnings of the Museum's operating budget was removed. During Fiscal Year 1976, (July 1, 1975 to June 30, 1976) a small deficit accrued,

-73- today totalling something under $100,000. The Museum has requested an emergency grant from the NEH to fund this shortfall and provide a stable funding supplement through FY 1978. It is the committee's belief that sale of a portion of the Museum's real estate which may be unnecessary to the effective conduct of its programs would generate funds sufficient to ensure that any outstanding liabilities of the Museum will be liquidated and to provide additional funds for Museum purposes such as, for example, conservation of the collection. This would also serve to reduce the Smithsonian's cost for building repair and upkeep, and raises the further possibility of joint staff appointments or transfer of staff to those other units of the Smithsonian into which the photographic archives, Black American art collection, library, and study collection might be integrated. This could serve not only to reduce the need for increased appropriations in future years but also to strengthen the cooperation between the Museum and the rest of the Smithsonian. The committee feels that, at least initially, most of the staff of the Museum of African Art should be retained by the Smithsonian. In so far as some of the activities for which staff were hired by the Museum of African Art might be transferred to other units of the Smithsonian,

-74- every attempt should be made to accommodate those staff within the normal hiring plans of the receiving units. This would depend in large part, of course, upon the rate of attrition in comparable jobs within those units and upon the qualifications of the respective Museum of African Art staff members. The committee believes that over the course of the first several years some portion of the staff could in fact be absorbed elsewhere within the Smithsonian, thus reducing the budget of the Museum of African Art. [[underline]] Authority of the Regents and Secretary for Policies and Administration [[/underline]] In his conversations with Smithsonian staff, Warren Robbins has made clear that his position is considerably flexible as to the specific arrangements that might be made for the Smithsonian's acquisition of the Museum, as well as the conditions that would prevail after the fact. A general outline of what he originally proposed is that legal ownership of all real property and other assets of the Museum of African Art (as well as its debts and liabilities) would vest in the Smithsonian; that as many of the Museum's staff as may be deemed desirable would be converted to Smithsonian employment; that the Museum would be maintained as an identifiable entity within the Smithsonian; that its Board of Trustees would be converted to an advisory (rather than

-75- executive) body; and that the Smithsonian would seek and secure appropriations from the Congress sufficient to finance the continued operation of the Museum -- in short a relationship between the Smithsonian and the Museum of African Art similar to that enjoyed by the Institution's current museum bureaus. In turn, Smithsonian staff have made clear to Mr. Robbins that such a relationship is a total one within which the Regents and Secretary must have final authority for all actions taken. In its meeting with Mr. Robbins of April 8, 1977, however, the committee found that Mr. Robbins, in an understandable desire to keep all the Museum's current physical plant available for its future use, was suggesting that Smithsonian assume responsibility for only that portion of the real estate it wished and that some other corporate entity, devolving from the Museum's current Board of Trustees, retain ownership of the remainder, making it available to the Smithsonian for the continued use of the Museum. The committee does not feel that this suggestion comports with the intent to retain full and complete authority and responsibility for the Museum in the Smithsonian as stated in the third precondition above, and accordingly recommends that this approach not be followed.

-76- [[underline]] Authority of the Regents and Secretary for the Future Disposition of the Museum [[/underline]] Again, it has been made clear to Mr. Robbins and he fully understands that any Agreement would have to protect the freedom of the Smithsonian and the Congress to make whatever future use they deem appropriate of the collections, real estate, and other assets of the Museum. Indeed, Mr. Robbins foresees and we believe would welcome the day when a Museum of Man or some other new organization unit may subsume the programs of the Museum of African Art and transport them to an entirely different setting. Such future possibilities aside, the committee feels a draft Agreement must be clear with regard to the Smithsonian's authority in such matters and recommends that this condition, together with the preceding three, be independently controlling and non-negotiable. [[underline]] Summary [[/underline]] The [[underline]] ad hoc [[/underline]] committee of the Board of Regents finds the Museum of African Art to be a cultural institution of signal importance to the Nation and its Capital in the study and explication of the art of Africa. Its collection is one of the best in the country; its staff is dedicated and enthusiastic; and we are generally convinced of the essential educational role the Museum can play in informing a public which is still largely ignorant of the traditional cultural expressions of the people of Africa.

-77- Particularly now that so many of our fellow citizens have been reminded in a very moving way of the heritage of Black Americans, the Museum will be filling a large need for well researched and mounted exhibitions, for publications and for educational outreach programs in African art. In short, we find the Museum of African Art to be exactly the kind of new enterprise to which the Smithsonian Institution should commit itself. Respectfully submitted, Congresswoman Boggs Senator Goldwater Mr. Haskins (Chairman) Mr. Higginbotham

-78- [[underline]] Illustrative Chronology of Actions Pertaining to the Acquisition of the Museum of African Art [[/underline]] May 1977 - Board of Regents considers acquisition under the stated conditions. If approved, the May - June 1977 - Smithsonian staff negotiates wording of draft Agreement with officials of Museum of African Art. If agreement is reached, then July 1977 - Congressional Regents introduce Concurrent Resolution in House and Senate. August 1977 - Agreement is signed, to go into effect only upon Congressional approval and receipt of adequate appropriation. September 1977 - Smithsonian submits its Fiscal Year 1979 budget request to the Office of Management and Budget, including approximately $800,000 for the Museum of African Art, alerting OMB to the pending Concurrent Resolution and our hopes for its passage within the year. 1977-1978 - Concurrent Resolution is considered by both Houses. If approved, and if Aug.-Sep., 1978 - Appropriations are enacted for Fiscal Year 1979, then October 1, 1978 - Smithsonian assumes responsibility for the Museum of African Art

-79- MUSEUM OF AFRICAN ART Illustrative Operating Budget, Fiscal Year 1979 (dollar in thousands) [[4-column table]] | [[underline]] Funds Provided | Federal Funds | Trust Funds | Total [[/underline]] | | Federal appropriation | $696 | $ - | $696 | | Membership & Contributions | - | 120 | 120 | | Grants | - | 75 | 75 | | Museum Shop Sales | - | 150 | 150 | | Admissions | - | 20 | 20 | | Miscellaneous | [[underline]] - | 25 | 25 [[/underline]] | | Total Provided | [[double underline]] $696 | $390 | $1,086 [[/double underline]] | | | | | | | [[underline]] Funds Applied [[/underline]] | | | | | Salaries and Benefits* | $472 | $146 | $618 | | Travel & Transportation | 10 | 10 | 20 | | Postage and Mailing | 4 | 10 | 14 | | Printing & Reproduction | 15 | 15 | 30 | | Supplies & Materials | 20 | 5 | 25 | | Equipment | 10 | 10 | 20 | | Consultants/Lecturers | 10 | 15 | 25 | | Maintenance/minor repairs/utilities | 35 | - | 35 | | Rent/Mortgage/Insurance | - | 20 | 20 | | Professional Fees and Dues | - | 10 | 10 | | Exhibit Installation | 40 | - | 40 | | Acquisitions for Library & Collection | 40 | - | 40 | | Conservation of Collection | 25 | - | 25 | | Cost of Sales, Shops | - | 75 | 75 | | Other Services | 15 | 5 | 20 | | SI Administrative Fee | [[underline]] - | 50 | 50 [[/underline]] | | Total Applied | [[double underline]] $696 | $371 | $1,067 [[/double underline]] | | | | | | | Balance | [[double underline]] $ - | $19 | $ 19 [[/double underline]] | [[/4-column table]] * See accompanying breakdown of proposed staffing level.

-80- MUSEUM OF AFRICAN ART Proposed Staffing, Fiscal Year 1979 (dollars in thousands) [[five columns]] | [[underline]] Position | Grade Level | Federal Expense [[/underline]] (less benefits) | [[underline]] Trust Expense [[/underline]] (less benefits) | [[underline]] Total [[/underline]] | | [[underline]]Position Administration[[/underline]] | | | | | | Director | 15 | $38.2 | | | | Deputy | 13 | 27.5 | | | | Secretary/Steno | 9 | 16.0 | | | | Admin. Asst. | 9 | 16.0 | | | | Receptionist/Switchboard | 4 | 9.4 | | | | Typist | 5 | 10.5 | | | | Admin. (Trainee) | 4 | 9.4 | | | | Development Ofcr. | 11 | | $19.3 | | | Public Info. Ofcr. | 9 | [[underline]] | 16.0 | [[/underline]] | | Subtotal | | $127.0 | $35.3 | $162.3 | | | | | | | | [[underline]]Maintenance/Security/Transportation[[/underline]] | | | | | | Operations Manager | 9 | $ 16.0 | | | | Property & Maint. Supr | 7 | 13.0 | | | | Custodians (2) | 3 | 16.8 | | | | Maintenance (2) | 4 | 18.8 | | | | Guards (4) | 4 | 37.6 | | | | Driver | 4 | [[underline]] | 9.4 | [[/underline]] | | Subtotal | | $111.6 | $ - | $111.6 | | | | | | | | [[underline]]Curatorial[[/underline]] | | | | | Curator | 11 | $ 19.3 | | | | Curatorial Asst. | 7 | 13.0 | | | | Registrar | 7 | 13.0 | | | | Exhibits Spec. | 7 | 13.0 | | | | Conservator | 9 | 16.0 | | | | Museum Aide | 5 | 10.5 | | | | Typist | 5 | [[underline]] | 10.5 | [[/underline]] | | Subtotal | | $ 95.3 | $ - | $ 95.3 | | | | | | | | [[underline]]Education[[/underline]] | | | | | | Archivist | 11 | $ 19.3 | | | | Asst. Archivst | 7 | 13.0 | | | | Trainee | 5 | 10.5 | | | | Librarian | 9 | 16.0 | | | | Asst. Librarian | 5 | 10.5 | | | | Typist | 5 | 10.5 | | | | Program Director | 7 | 13.0 | | | | Lecturer | 6 | | $ 11.7 | | | Curriculum Spec. | 6 | | 11.7 | | | Workshop Leader (1 1/2) | 5 | | 15.8 | | | Clerk Typist | 4 | [[underline]] | 9.4 | [[/underline]] | | Subtotal | | $ 92.8 | $ 48.6 | $141.4 | [[/five columns]]

-81- [[five columns]] | [[underline]] Position | Grade Level | Federal Expense | Trust Expense | Total [[/underline]] | | [[underline]]Auxiliary Activites[[/underline]] | | | | | | Front Desk Manager | AD | | $10.0 | | | Receptionist | AD | | 7.0 | | | Sales Manager | AD | | 12.0 | | | Salesperson | AD | | 9.0 | | | Weekend Staff (5 part-time) | AD | [[underline]] | 10.0 | [[/underline]] | | Subtotal | | $ -- | $48.0 | $48.0 | | Totals | | [[double underline]] $426.7 | $131.9 | $558.6 [[/double underline]] | [[/five columns]]

-82- [[underline]] Archaeometry-Conservation -- Dr. Gell-Mann [[/underline]] Dr. Murray Gell-Mann expressed concern relating to the development of archaeometry at the Institution. The following text was submitted to the Regents for their consideration. The conservation of collections is one of the most important functions of a museum. In the last decade, major advances have been made in developing new diagnostic tools and methods of treatment. These have assured the preservation of countless objects, either the product of nature or the testimony of man's accomplishments and aspirations. However, it has become increasingly clear that for preservation to be fully effective, much more needs to be known about the properties of materials, their origins, and the manner in which they were used, either singly or in combination with others, to create the artifacts now in our care. This analytical approach to conservation of artifacts is intimately associated with what we may call archaeometry: the study of such objects by the methods of the natural sciences. In the course of the last generation, great progress has been made in archaeometry, including the development of new methods for dating and authenticating museum objects as well as understanding the methods of their manufacture and the sources of the materials of which they are made. Modern archaeometric studies are obviously of great value to conservation and, conversely, it is true that conservation activity provides an excellent opportunity for the scientific study of artifacts.

-83- As more has become known about objects, their physical and chemical structure and their manufacture, there has been an attendant increase in the sophistication of forgers who either produce outright imitations or, what is more threatening, alter ancient objects or combine them to create those unique specimens attractive to eager collectors and, sometimes, to unsuspecting professionals. The research approaches that constitute archaeometry are major defenses against these hazards, as well as major tools for more precise dating and more profound understanding of the evolution of technology, trade routes, and civilization itself. Dr. Gell-Mann stated that although the Smithsonian does have conservation facilities that carry out excellent work (mostly in conservation itself and some in archaeometry) he feels that a good deal more could be accomplished at the Smithsonian that would be invaluable for its collections. Mr. Ripley greatly welcomed this initiative on the part of the Regents and expressed his appreciation for his staff as well as himself for this policy guidance. The Board of Regents approved the following motion: VOTED that in consideration of the unique opportunity that the collections of the Institution present, and of the excellence and variety of its scholarly staff, the Regents urge that the Institution, and especially its Conservation Analytical Laboratory, develop, as a matter of priority, the facilities, staff, and programs necessary to further archaeometric research within the Institution and in cooperation with other organizations as may be found desirable.

-84- LEGISLATIVE REPORT [[underline]]Museum Support Center[[/underline]] Mr. Ripley reported that measures authorizing construction of a museum support center have been introduced in both the Senate and the House but no action has been taken on them. S. 1029, introduced by Senator Jackson for himself, Senator Goldwater and Senator Pell on March 17 has been referred to the Senate Committee on Rules and Administration. H.R. 6086, introduced by Mr. Mahon for himself, Mr. Cederberg, and Mrs. Boggs on April fifth, has been referred to the House Committee on Public Works and Transportation and to its Subcommittee on Public Buildings and Grounds. [[underline]]Barro Colorado Island[[/underline]] Several actions have been taken on bills to increase the amount of appropriations authorized for the Barro Colorado Island facility of the Smithsonian Tropical Research Institute. In the Senate S. 1031, introduced on March 17 by Senator Jackson for himself, Senator Goldwater, and Senator Pell was reported by the Committee on Rules and Administration on April 27 with an amendment increasing the authorized level to $750,000. The draft approved by the Board of Regents at its meeting in January sought to raise the level to $600,000 from the currency authorized one of $350,000. The additional increase was sought by the Secretary in order to accommodate the allocation of indirect costs associated with the facility as suggested by the General Accounting Office. S. 1031 was approved by the Senate on May second.

-85- In the House Mr. Metcalfe, Chairman of the Subcommittee on the Panama Canal of the Committee on Merchant Marine and Fisheries, introduced H.R. 3348, a bill identical to that approved by the Regents in January, at the request of the Smithsonian on February ninth. On March 22 hearings were held before the Subcommittee and a request was made to increase the authorized level of appropriations from the $600,000 contained in the bill to $750,000. The subcommittee approved the measure at the $750,000 level on May second and the full Committee did the same on May fourth. [[underline]]Hirshhorn Museum Film[[/underline]] S. 1030, a bill to make the film about the Hirshhorn Museum and Sculpture Garden, produced by the United States Information Agency, available in the United States, was introduced on March 17 by Senator Jackson for himself, Senator Goldwater, and Senator Pell, and referred to the Committee on Foreign Relations which has taken no action on it. A companion measure, H.R. 6085, was introduced on April fifth by Mr. Mahon for himself, Mr. Cederberg, and Mrs. Boggs. It was referred to the Committee on International Relations which reported it favorably on April 27 as an amendment to the Foreign Relations Authorization Act, Fiscal Year 1978. The Act was approved by the House on May fourth.

-86- [[underline]]EQUAL EMPLOYMENT OPPORTUNITY PROGRESS REPORT[[/underline]] Mr. Ripley stated that the following information is provided as an update to the equal employment opportunity report which was presented to the Regents at their January 1977 meeting. Several major changes have occurred since our last report. The Director of our Office of Equal Opportunity has left the Institution to assume the post of Personnel Director at an Army installation in Detroit, Michigan, and we are presently recruiting for a replacement. Additionally, while in the process of reviewing the equal opportunity program in preparation for this report, we arrived at an interesting new perspective, particularly with regard to the data base previously developed. Our January report compared April 1975 statistics to October 1976; current employment data are now in hand, and the chart on the following page compares April 1977 data to April 1975.

-87- [[9-column table]] [[header]] | [[underline]]Total | Minority | Negro | Spanish | Indian | Oriental | Other | Women[[/underline]] [[/header]] [[underline]]April 1975[[/underline]] Grades 1-4 | 591 | 355 | 332 | 15 | 0 | 8 | 236 | 252 Grades 5-8 | 945 | 321 | 290 | 17 | 4 | 10 | 624 | 554 Grades 9-12 | 843 | 145 | 115 | 11 | 2 | 17 | 698 | 292 Grades 13-15 | 484 | 24 | 14 | 5 | 0 | 5 | 460 | 63 Grades 16-18 | 58 | 1 | 1 | 0 | 0 | 0 | 57 | 2 AD, EX, Misc. | 42 | 8 | 7 | 0 | 0 | 1 | 34 | 16 Wage Grade | [[underline]] 621 | 398 | 384 | 14 | 0 | 0 | 223 | 79[[/underline]] TOTAL | 3,584 | 1,252 | 1,143 | 62 | 6 | 41 | 2,332 | 1,258 [[underline]]April 1977[[/underline]] Grades 1-4 | 626 | 395 | 375 | 12 | 1 | 7 | 231 | 227 Grades 5-8 | 1,008 | 379 | 351 | 14 | 2 | 12 | 629 | 590 Grades 9-12 | 904 | 146 | 121 | 9 | 4 | 12 | 758 | 332 Grades 13-15 | 486 | 29 | 16 | 5 | 1 | 7 | 457 | 64 Grades 16-18 | 58 | 1 | 1 | 0 | 0 | 0 | 57 | 1 AD, EX, Misc. | 41 | 3 | 3 | 0 | 0 | 0 | 38 | 21 Wage Grade | [[underline]] 782 | 484 | 460 | 23 | 0 | 1 | 298 | 96[[/underline]] TOTAL | 3,905 | 1,437 | 1,327 | 63 | 8 | 39 | 2,468 | 1,331 [[/9-column table]]

-88- This chart reflects a 9% increase in overall permanent employment between April 1975 and April 1977, and reflects a 15% increase in minority employment. The most significant increases occurred in grades 5 through 8 (18%) and in grades 13 through 15 (20%). This may be attributed partly to upward mobility emphasis at lower grade levels and increased affirmative recruitment efforts at higher grade levels. Minority employment at grades 9 through 12, while not showing a decline, has not increased at the same pace, but we are optimistic that, with increased emphasis throughout the Institution in attracting minority candidates at these levels, we are approaching this problem in the proper direction. Continued success of our upward mobility efforts should also provide future potential candidates for these positions. The major area failing to improve during the past two years was in the employment of women. While the total number of women in the workforce increased, as a percentage of the total women employment decreased from 35.1% in 1975 to 34.1% in 1977. We are encouraged, however, with the expectation that jobs that were once male oriented will attract more women candidates. The Institution's 1977 Affirmative Plan of Action, outlining the objectives for the year, has been approved by the Civil Service Commission and distributed to Smithsonian supervisors for implementation. Our career development programs have broadened the opportunities for minority and female

-89- employees, and through our upward mobility programs, an appreciable number of minority and female employees are making the transition from sub-professional to professional positions. These accomplishments are organizationally healthy and positive, and we will continue vigorously our efforts to fulfill our commitment to equality of opportunity. We are very pleased to report that the Hirshhorn Museum and Sculpture Garden has joint appointed its first woman Administrator; more important, however, is the fact that she came to the Smithsonian Institution in 1958 as a clerk-typist in the budget office and worked her way up to the position of budget officer in 1973; she assumes her new role in May 1977. We are also pleased to announce a Smithsonian-sponsored ten-day management seminar to be held in June for 20 current or prospective managers at grades 11 and above, and we have recently asked for self-nominations from eligible staff. Previous management training seminars were geared to employees at grades 13 and above. Topics to be covered in this seminar have been tailored to meet the unique needs of the Smithsonian and will offer participants an intensive learning opportunity designed to improve their understanding of the role of the manager in an academic environment. Although the seminar is open to all eligible employees, women and minorities were particularly encouraged to nominate themselves for participation.

-90- [[preprinted]] [[image - drawing of Smithsonian buildings]] SMITHSONIAN INSTITUTION OFFICE MEMORANDUM [[/preprinted]] 763 (rev) Amendment 1 March 7, 1977 TO: Heads of organization units SUBJECT: Equal Employment Opportunity Plan of Action Enclosed is a revision of part II, EEO Plan of Action. It shows the plan's policy statements, overall goals and the responsibilities of Smithsonian offices. The Plan of Action's fiscal year report will not be issued in this OM series. It will be issued as a regular memorandum detailing objectives for the forthcoming year and describing the past year's accomplishments. [[signed]] S. Dillon Ripley [[/signed]] S. Dillon Ripley Secretary Enclosure Retention: Indefinite Cancellation: Part II--Plan of Action--dated May 26, 1976 Filing Instructions: File this with part I of OM 763 (dated 5/26/76).

-91- Part II OM 763 (rev.) Amendment 1 3/7/77 POLICY STATEMENT On March 6, 1975, the President issued a memorandum stating that, "Our Nation's strength is based upon the concept of equal opportunity for all our citizens. Decisions motivated by facts not related to the requirements of a job have no place in the employment system of any employer." As the Secretary of the Smithsonian Institution, I strongly endorse the President's statement, and fully support affirmative actions which will assure that all employees and potential employees have an opportunity to compete on a fair and equal basis for employment and advancement at the Smithsonian. Our career development programs have broadened the opportunities for minority and female employees, and through our upward mobility programs, an appreciable number of minority and female employees are making the transition from sub-professional to professional positions. I feel that these accomplishments are organizationally healthy and positive. We need to continue vigorously our efforts to fulfill our commitment to equal opportunity. [[underlined] General Responsibilities for Equal Employment Opportunity Plan of Action [[/underlined]] A. The Director of Equal Opportunity is responsible for maintaining a responsive and viable affirmative Plan of Action which reflects the Smithsonian Institution's commitment to equality of opportunity, and for informing the Secretary of the status of the EEO Program. The Director of Equal Opportunity is assisted by the EEO Chief Counselor who is responsible for the activities of all 18 EEO counselors; the Women's Program Coordinator, who is responsible for all matters pertaining to the equal employment status of women; the Equal Opportunity Specialist, who is responsible for assuring compliance with the Action Plan and with Title VI of the Civil Rights Act of 1964; the Upward Mobility Coordinator who is responsible for coordinating the Upward Mobility Program; and the Sixteen Point Program Coordinator who handles those Smithsonian Institution activities relating to recruitment and training of Spanish-surnamed Americans. In each area the individual involved assists in formulating and implementing EEO policy and programs and in developing procedures for the effective execution of an overall EEO operation. B. Members of the Executive Committee and heads of organization units are responsible for implementing the Plan of Action in their areas of delegated authority. C. The Office of Personnel Administration is responsible for providing staff assistance in developing individual plans and procedures to assure equal opportunity in every phase of personnel administration.

-2- OM 763 (rev.) Amendment 1 3/7/77 Part II D. All supervisory employees, managers and principal investigators are responsible for assuring compliance with the full spirit of the Institution's policy and for evaluating the effectiveness of the Plan in their organizations. E. Individual members of the Smithsonian staff at all levels must work to eradicate prejudice and discrimination and genuinely support our commitment to achieving equal opportunity. AFFIRMATIVE ACTION PLAN COVERAGE Each major office, organizational component or bureau is required to tailor an affirmative action plan to its particular needs. These plans are to be the "brain children" of the directors, employees, supervisors, labor representatives, and other staff members. Hopefully, the plans developed by this amalgamation will create the simple and practical kinds of affirmative actions which would help eliminate all vestiges of discrimination, past and present. These plans are to state the EEO problem, an action item that would eliminate the problem, and the responsible officials for completing the action item.

-92- MEMORANDUM TO: Heads of bureaus and major offices FROM: S. Dillon Ripley Secretary [[signed]] S. Dillon Ripley [[/signed]] DATE: March 2, 1977 SUBJECT: Equal Employment Opportunity Plan of Action This memorandum to you and other heads of bureaus/major offices transmits the Equal Employment Opportunity (EEO) Program Plan of Action for fiscal year 1977. Please review it and assure that officials in your organization who are responsible for attaining objectives in the Action Plan report their accomplishments by the "action due" dates. Send reports through organization channels to the Office of Equal Opportunity. Please keep the plan available for review by any interested employee. An Announcement is being sent to employees notifying them of this, and also advising them that copies may be obtained from the Office of Equal Opportunity. Enclosure

-93- SMITHSONIAN INSTITUTION EQUAL EMPLOYMENT OPPORTUNITY PROGRAM PLAN OF ACTION For Period October 1, 1976 to October 1977 [[signature]]S. Dillon Ripley[[/signature]] S. Dillon Ripley Secretary [[signature]]Archie D. Grimmett[[/signature]] Archie D. Grimmett Office of Equal Opportunity

-94- [[underline]] PART A INTRODUCTION [[/underline]] I. [[underline]] Policy and Organization [[/underline]] a. EEO Policy This memorandum reaffirms the Smithsonian Institution's policy of providing equality of opportunity in all its official actions; prohibiting discrimination in employment because of race, color, religion, sex, national origin, or age; and promoting the full realization of equal employment through an affirmative plan of action. While the principle responsibility for this important program rests with the Secretary, each member of the Executive Committee and each bureau director, office head, supervisor, and employee of the Institution is charged with the responsibility of supporting the Secretary in achieving equal opportunity for everyone. All employees must be given full opportunity to demonstrate their abilities. This policy must continue to be an integral part of every aspect of Smithsonian activity through a continuing affirmative action program. The equal employment opportunity guidelines established for government agencies have been adopted by the Smithsonian Institution for implementation of this policy. Federal and nonfederal employees and activities are covered by the provisions of this memorandum; employees of the Smithsonian Tropical Research Institute also are included to the extent this memorandum does not conflict with provisions of the Canal Zone Merit System. b. Organization The Director of Equal Opportunity is responsible for maintaining a responsible and viable affirmative Plan of Action which reflects the Smithsonian Institution's commitment to equality of opportunity and for informing the Secretary of the status of the EEO Program. The Director of Equal Opportunity is assisted by the EEO Chief Counselor who is responsible for the activities of all 18 EEO Counselors; the Women's Program Coordinator, who is responsible for all matters pertaining to the equal opportunity status of women; the Equal Opportunity Specialist, who is responsible for assuring compliance with the Action Plan and with Title VI of the Civil Rights Act of 1964; the Upward Mobility Coordinator, who is responsible for coordinating the Upward Mobility Program; and the Sixteen Point Program Coordinator, who handles those Smithsonian Institution activities relating to recruitment and training of Spanish-Surnamed Americans. In each area the individual involved assists in formulating and implementing EEO policy and programs and in developing procedures for the effective execution of an overall EEO operation. Members of the Executive Committee and heads of organization units are responsible for implementing the Plan of Action in their areas of delegated authority.

The Office of Personnel Administration is responsible for providing staff assistance in developing individual plans and procedures to assure equal opportunity in every phase of personnel administration. Supervisory employees, managers and principal investigators are responsible for assuring compliance with the full spirit of the Institution's policy and for evaluating the effectiveness of the Plan in their organizations. Individual members of the Smithsonian staff at all levels must work to eradicate prejudice and discrimination and genuinely support our commitment to achieving equal opportunity. II. [[underline]]Certificate of Qualifications[[/underline]] REPORT OF QUALIFICATIONS OF PRINCIPAL EQUAL EMPLOYMENT OPPORTUNITY OFFICIALS. This is to certify the qualifications of all staff officials concerned with the administration of the Equal Employment Opportunity Program including the following: [[two columns]] Director of Equal Opportunity | Equal Opportunity Specialist EEO Chief Counselor | Upward Mobility Coordinator Smithsonian Institution Women's Program Coordinator | Sixteen Point Program Coordinator [[/two columns]] All of the above have been reviewed by competent authority and the incumbents of these positions meet the standards outlined in Qualifications Standards Handbook X-118 under Equal Opportunity Specialist, GS-160 or "Qualifications Guide for Collateral Assignments Involving Equal Employment Opportunity Duties". Evidence that the review has been made and its findings are on file and available for review by Civil Service Commission Officials. [[underline]] ^[[Archie D. Grimmett]] [[/underline]] Archie D. Grimmett, Director Office of Equal Opportunity [[underline]] ^[[October 1, 1976]] [[/underline]] Date

-95- [[underline]] Courses Attended by Staff In The Office of Equal Opportunity [[/underline]] [[three columns]] Archie D. Grimmett | National Conference on EEO Law, New York, N.Y. | April 19-21, 1976 | Conference of Minority Public Administrators Sheraton Motor Hotel, Silver Spring, Md. | March 10-12, 1976 | Chester Henderson | Investigation of Complaints of Discrimination Civil Service Commission | January 27-30, 1976 | LaVerne M. Love | FEW National Conference, San Francisco, Calif. | July 8-11, 1976 [[/three columns]] New Counselors will be scheduled for counselor training as appointed. EEO Officers will be scheduled for training at Civil Service Commission. [[underline]] Allocation of Personnel and Resources for Equal Employment Opportunity [[/underline]] [[four columns]] | [[underline]] EEO Program Personnel | Full-time | Part-time | Man-year [[/underline]] | | Director, Equal Opportunity | 1 | | 1 | | Chief Counselor | 1 | | 1 | | SI Women's Program Coordinator | 1 | | 1 | | Equal Opportunity Specialist | 1 | | 1 | | Upward Mobility Coordinator | 1 | | 1 | | Secretary | 1 | | 1 | | Sixteen Point Program Coordinator | | 1 | 1/4 | | EEO Counselors | | 18 | 2 | | EEO Officers | [[underline]] | 19 | 4 [[/underline]] | | | 6 | 38 | 12 1/4 | [[/four columns]]

[[table with five columns]] | Program Areas | FT | PT | % | Program Cost | | 1. EEO Program Administration and Management (a) | | | | | | a. EEO Director | 1 | - | - | 37,334.00 | | b. EEO Officer(s) | - | 19 | 3% | 14,252.00 | | c. Federal Women's Coordinator(s) | 1 | - | - | 26,485 | | d. Spanish-Speaking Coordinator(s) | - | 1 | 10% | 1,437.00 | | e. Upward Mobility Coordinator(s) | 1 | - | - | 21,014.00 | | f. EEO Specialist(s) | 1 | - | - | 21,715.00 | | g. EEO Counselor(s) | 1 | 18 | 10% | 46,100.00 | | h. EEO Investigator(s) (b) | - | - | - | 52,000.00 | | i. Other Personnel (specify) | 1 | - | - | 12,372.00 | | j. Other Administrative Expenses (specify) | | | | 5,945.00 | | 2. EEO and Personnel Management Training (c) | - | - | - | 1,385.00 | | Total | 6 | 38 | | 240,049.00 [[/table with five columns]] (i) Secretary (h) CSC investigators, Hearing Examiners, stenotypists: $4,000.00 times 13 cases = $52,000.00 (j) ADP runs, training, travel, office maintainance, etc. 2. In cooperation with Office of Personnel

-96- [[underline]] PART B. ACCOMPLISHMENT REPORT [[/underline]] I. List each objective and action item from previous Equal Employment Opportunity Plan and show extent to which the action item was accomplished and reasons for any action items not accomplished. II. EEO Complaint Processing [[four column table]] Type of Action | Number received | Number processed to completion | Avg. no. of days to complete | 13 | 7 | 254 | Decision on Merits | | 2 | 75 Cancellation | | | Rejection | | 5 | 218 Withdrawal | | | Total | 13 | 7 | 254 [[/four column table]] III. Upward Mobility a. Total number of position vacancies filled competitively below GS-10 and equivalent in all series and from all sources [[underline]] 316 [[/underline]] b. Number of employees below GS-9 or equivalent who participated in one or more upward mobility program activities and who were promoted or reassigned into: (1) the same occupational series [[underline]] 7 [[/underline]] (2) a different occupational series [[underline]] 16 [[/underline]] c. Number of employees below GS-9 or equivalent who participated in one or more upward mobility programs but who were neither promoted nor reassigned [[underline]] 21 [[/underline]]

IV. Discrimination Complaints a. Counseling Activity During Previous Plan Year The ratio of counselors to full-time permanent employees is [[underline]] 1:207 [[/underline]]. [[9-column table]] | [[underline]]Kind of matter giving rise to the request for counseling:[[/underline]] | [[span 8 columns]][[underline]]Number of persons[[/underline]] alleging discrimination on the basis of: | | | Race | Color | Religion | Sex female | Sex male | Nat'l Origin | Age | Total | | [[underline]] Personnel Action [[/underline]] | | | | | | | | | | Appointment | 14 | | | | 3 | | | 17 | | Promotion | 44 | | 4 | 9 | 6 | | | 63 | | Reassignment | 9 | | | 2 | | | | 11 | | Separation | 4 | | | | | | | 4 | | Suspension | 2 | | | | | | | 2 | | Other (specify | 1 | | | 2 | 2 | 2 | | 7 | | [[underline]]Matter[[/underline]] | | | | | | | | | | Detail | 1 | | | | | | | 1 | | Training | 4 | | | | 5 | | | 9 | | Duty Hours | 3 | | | | | | | 3 | | Reprimand | | | | | | | | | | Other (specify) | 7 | | | 1 | 1 | | | 9 | | Total Number of Persons Counseled During the Year: | 89 | | 4 | 14 | 17 | 2 | | 126 | | Total Number of Instances of Counseling During the Year: | * (including inquiries) | | | | | | | *380 | [[/9-column table]]

c. Discrimination Complaint Processing during Previous Plan Year (1) Number of complaints on hand at beginning of year [[underline]] 8 [[/underline]] (Count each complainant in a consolidated complaint as a separate complaint.) (2) Number of complaints received during the year [[underline]] 13 [[/underline]] (Count each complainant in a consolidated complaint as a separate complaint.) [[9-column table]] | [[underline]]Kind of matter giving rise to the complaint:[[/underline]] | [[span 8 columns]]Discrimination alleged on the basis of: | | | Race | Color | Religion | Sex-Female | Sex-Male | Nat'l Origin | Age | Total | | [[underline]]Personnel Action[[/underline]] | | | | | | | | | | Appointment | 2 | | | | | | | 2 | | Promotion | 11 | | | | 1 | | | 12 | | Reassignment | 2 | | | | | | | 2 | | Separation | | | | 1 | | 1 | | 1 | | Suspension | 3 | | | | | | | 3 | | Other (specify) Reprisal-Harassment | 1 | | | | | | | 3 | | Singing | 1 | | | | | | | | | Performance of Duty | 1 | | | | | | | | | [[underline]]Matter[[/underline]] | | | | | | | | | | Detail | | | | | | | | | | Training | | | | | | | | | | Duty Hours | | | | | | | | | | Reprimand | | | | | | | | | | Other (specify) | | | | | | | | | | Total | 21 | | | 1 | 1 | 1 | | 23 | [[/9-column table]] (3) Number of complaints closed during the year [[underline]] 7 [[/underline]] (Count each complainant in a consolidated complaint as a separate complaint.) (4) Average time, in days, for processing an EEO complaint case (including all cases closed) during the previous plan year: [[underline]] 254 [[/underline]] days (5) Number of complaints on hand at close of year [[underline]] 16 [[/underline]] (Count each complainant in a consolidated complaint as a separate complaint.) (6) Number of allegations of reprisal [[underline]] 1 [[/underline]] (7) Number of class actions [[underline]] 0 [[/underline]]

-98- RESULTS OF ACTION TAKEN ON ACTION ITEMS IN 1976 ACTION PLAN [[3-column table]] | ACTION ITEMS | RESULTS [[line across page]] | I. | [[underline]]ORGANIZATION AND RESOURCES TO ADMINISTER THE EEO PROGRAM IN A POSITIVE AND EFFECTIVE MANNER[[/underline]] | | | A. [[underline]]Situation:[[/underline]] Office of Equal Opportunity needs ample time to review component plans before agency plan is due. | 10 major bureaus submitted reports of EEO accomplishments for the year. | | | 1. All mini-plans are due in the OEO by June 1, 1976. | | | | Responsible Official: Equal Opportunity Officers | | | II. | [[underline]]RECRUITMENT ACTIVITIES DESIGNED TO REACH AND ATTRACT JOB CANDIDATES FROM ALL SOURCES[[/underline]] | | | | A. [[underline]]Situation[[/underline]]: There is a need to reach and attract job candidates from under-utilized groups. | Emphasis is placed upon promotion from within. In those instances where sufficient background is not available for qualification, outside recruitment is then pursued. | | | 1. Fill as many jobs as possible by internal promotions. | | | | Responsible Official: All supervisors | | | B. | [[underline]]Situation[[/underline]]: Few women and minorities are in positions that provide supervisory management experience which will qualify them for GS 13-15 positions. | | | 1. Encourage supervisors to offer women and minorities in grades 8-12 opportunities for professional growth with an emphasis on acquiring management supervisory skills by encouraging their participation at work-related professional meetings, supervisory management conferences, seminars, workshops, assignments to special management projects, details and task forces. | Action continuing. There has been an improvement as noted by statistical chart # 1 (April 1975), where 25 positions of 491 were occupied by minorities at this level, when compared with chart # 2(April 1976), where 28 positions of 491 are occupied by minorities. This constitutes an improvement of 0.6%. | | | Responsible Official: Heads of organization units. | [[/3-column table]]

[[3-column table]] | ACTION ITEM | RESULTS [[line across page]] | | 2. | Before recruitment action is taken to fill a vacancy at grade levels 13 and above or in any of the occupations listed above, the vacancy will be reviewed by the bureau head or office director advertising the vacancy; a special recruitment plan will outline the steps to be taken to locate minority and women candidates. The Offices of Personnel Administration and Equal Opportunity will actively assist in developing this plan, and will actively assist in developing this plan, and will review with the supervisors the qualifications required for each position. This review will assure the elimination of qualifications which are unnecessary and which might inhibit competition by minorities and women. | S.I. Libraries and the Museum of Natural History have developed steps to implement this action. Other offices comply. | | | Responsible Official: Bureau Heads and Directors | | | 3. | Selection of candidates for appointment to all professional, administrative, technical, and supervisory positions at IS-7, GS-7, and WG-7 and above will be forwarded to the Office of Personnel Administration with a statement from the selecting official summarizing the extent of his/her efforts to recruit members of a minority group, including women, for the particular position. Action must be reviewed for EEO implications by the Office of Equal Opportunity before final selection. | Action continues. All selections are sent to Office of Equal Opportunity and reviewed by the Director. | | | Responsible Official: Director, OPersA; Director, OEO; Heads of organization units. | | | V. | [[underline]]TRAINING, ADVICE, INCENTIVES, AND PERFORMANCE EVALUATION TO ASSURE PROGRAM UNDERSTANDING AND SUPPORT BY SUPERVISORS[[/underline]] | | | A. | Situation: Top managers must know current policies and procedures as well as concerns and employment issues related to minorities and women. | | 1. OEO staff members should meet at least quarterly with top managers on EEO. | Meetings were held with EEO officers on an individual basis. First meeting held in July. [[/3-column table]]

-99- [[3-column table]] | ACTION ITEMS | RESULTS [[line across page]] | | II. | C. Situation: The Washington Metropolitan Area has an increasing Spanish-speaking population which has been ignored in the past. | | | | 1. Establish contacts with local Spanish-speaking organizations through efforts CACHO(Capital Area Council of Hispanic Organizations) and determine how it can be used as a recruitment source. | This action has been accomplished. Contact has been established. Contacted LULAC, CACHO, the G.I. Forum, La Mesa Runda, and IMAGE. | | Responsible Official: Sixteen Point Coordinator | | Target date: June 1976 | | III. | [[underline]]FULL UTILIZATION OF THE PRESENT SKILLS OF EMPLOYEES[[/underline]] | | | | A. Situation: Assure that employees with special skills are considered before outside recruitment begins. | | | | 1. Identify an occupational series where minorities and women are few, absent and are under-utilized. | Responsible Official: S.I. Women's Coordinator, Spanish-speaking Coordinator, Director, OPersA. | | | | Target date: June 30, 1976 | | | | Action accomplished. The occupational series with few minorities and women was identified in April 1976. [[/3-column table]]

[[3-column table]] | ACTION ITEMS | RESULTS [[line across page]] | | | 2. To whatever extent feasible fill 10% of vacant positions with lower level employees and make full use of their skills. | Responsible Official: All supervisors | | | | Target date: ongoing | | | | Action partially accomplished. Secretary of S.I. issued memorandum on July 14, 1976 requiring in depth analysis of each vacant SI position before filling it. Such analysis will include possibility of filling the position at a lower grade. Although the memo was issued as an economy move in conformance with the President's memo to all agencies on the same subject, the result encouraged compliance with this action. [[/3-column table]]

-100- [[3-column table]] | ACTION ITEM | RESULTS [[line across page]] | | IV. [[underline]]OPPORTUNITIES FOR EMPLOYEES TO ENHANCE THEIR SKILLS, PERFORM AT THEIR HIGHEST POTENTIAL, AND ADVANCE IN ACCORDANCE WITH THEIR ABILITIES[[/underline]] | | A. | [[underline]]Situation[[/underline]]: Existing forms of Upward Mobility at the Smithsonian Institution are restricted because they came about as a commitment made by separate organizations and are not Institution-wide in application. There is a need to establish an Institution-wide Program in accordance with Civil Service Guidelines. | | | 1. An Upward Mobility Policy for the Smithsonian Institution will be established, in handbook form, focusing on affirmative action to facilitate the development and implementation of specific career opportunities for lower grade level employees, at the bureau and office levels. | Handbook has been established and is pending approval. | | Responsible Official: Upward Mobility Coordinator | | | 2. A comprehensive Upward Mobility Program will be established, including an Upward Mobility training agreement, developed for Civil Service Commission approval, to facilitate qualifying employees, below GS-9 or equivalent, to meet X-118 Standards for positions with greater growth through special training, education, and/or on-the-job experience. | This item is being developed and will be finalized by October 1,76 | | Responsible Official: Upward Mobility Coordinator | | | 3. The Office of Equal Opportunity will be provided position ceilings and resources to support 5 employees in the initial Institution-wide Upward Mobility Program. | Pending approval of S.I. FY'77 budget. | | Responsible Official: Upward Mobility Coordinator | | | 4. Bureau and Office managers will be solicited to participate in the program, commiting a portion of their anticipated vacancies, in administrative, technical, professional, craft/trade, and labor occupations, in an effort to diversify the employee population in those careers. | Has been initiated and will be finalized by October 1, 1976. | | Responsible Official: Upward Mobility Coordinator [[/3-column table]]

[[3-column table]] | ACTION ITEM | RESULTS [[line across page]] | | | B. [[underline]]Situation[[/underline]]: Few minorities and women occupy positions at GS-13 and above. Excluding executives, of a total of 390 positions at that level, only 16 are minorities--14 (N), 1(SS), 1(O)-- and of 51 women at that level, only 2(N) are minority women. Some occupational series have little or no minority or female representation. | | | | Those federal employment series having 10 or more employees in which the minority or female total is 8 percent or less are listed below. | [[/3-column table]] [[7-column table]] Title & Series | Total | Minority | % | Women | Appointments 1974-1976* | SMSA (Nat'l) Minority % [[line across page]] Historian GS-170 | 22 | 1(N) | 4.55 | 10 | 9 | 5.45 Anthropologist GS-190 | 16 | 0 | 0 | 2 | 1 | Computer Specialist GS-334 | 18 | 1(SS) | 5.56 | 3 | 1 | 5.36 Program Manager GS-340 | 14 | 0 | 0 | 2 | 2 | Zoologist GS-410 | 32 | 0 | 0 | 3 | 2 | Research Entomologist GS-414 | 11 | 0 | 0 | 0 | 1 | Botanist GS-430 | 14 | 1(N) | 7.14 | 2 | 2 | Curator GS-1015 | 72 | 1(SS) | 1.39 | 17 | 9 | 5.99 Physicist GS-1310 | 22 | 0 | 0 | 1 | 1 | 2.71 Astronomer/Astrophysicist GS-1330 | 22 | 0 | 0 | 1 | 0 | 3.54 Geologist GS-1350 | 28 | 0 | 0 | 1 | 3 | 2.86 Librarian GS-1410 | 35 | 1(N) | 2.86 | 22 | 12 | 8.20 [[/7-column table]] * Actual vacancies filled may have been greater where employee's entrance on duty and termination both occurred during this period. Such instances would not appear on the record as having been a vacancy filled by recruitment. [[3-column table]] | 1. Concentrate recruitment efforts to employ minorities in occupations listed above, particularly in Library field, where turnover and availability indicate a change could be realized quickly. | Responsible Official: Bureau heads and directors; Librarian; OPersA; Director, OEO | | Target date: December 31, 1976. Progress is being made on this, which is continuing in new FY Plan. \ [[/3-column table]]

-101- [[3-column table]] | ACTION ITEM | RESULTS [[line across page]] | | | B. Situation: Insure maximum understanding and support of EEO and Upward Mobility Program by supervisors and managers. | | | 1. Continue to include in the monthly supervisory training courses a period devoted to the EEO Program. | Three training courses have been held and are scheduled to begin again 10/76. | | | 2. Train supervisors and managers in methods of achieving goals of Upward Mobility Program. Training will cover counseling techniques and ways to develop skills of employees, effective use of available developmental resources, and ways to develop effective human relationships. | Accomplished in the supervisory training courses (see above). | | Responsible Official: Heads of organization units with assistance of subordinate managers and supervisors. | | [[underline]]VI. | PARTICIPATION IN COMMUNITY EFFORTS TO IMPROVE CONDITIONS WHICH AFFECT EMPLOYABILITY[[/underline]] | | | | A. Situation: Increase awareness of SI employment opportunities in the minority community, local women's organizations and among the Spanish-surnamed. | | | 1. Develop an interim program for high school students interested in pursuing careers at SI | Number of Smithsonian programs including Anacostia Neighborhood Museum which is in Southeast Community. Other programs are implemented by each museum education office including National Collection of Fine Arts' (NCFA) "Museums Discover Graphics Program for Apprentices", "Career Education Workshops", and "Teachers in Residence Program". In addition NCFA participated in the District of Columbia "Youth Opportunities Program" by assigning eight (8) District school youths throughout SI during the summer. [[/3-column table]]

[[3-column table]] | ACTION ITEM | RESULTS [[line across page]] | | VI. | | Other programs included a program designed to provide work-learn experience for Pride, Inc. placed local high school students, and the "Smithsonian Intern '76" Program. | | | 2. Ensure meaningful work/learn assignments and sufficient supervision and guidance for interns. | Action not yet complete. However, PRIDE and apprentice program referred to above have been implemented and are continuing. | | | 3. Evaluate program results. | Action not accomplished. Action not due for completion until October, 1976. | | | | Responsible Official: OEO Staff, OPersA. [[/3-column table]]

-102- [[3 column table]] | ACTION ITEM | RESULTS [[line across page]] | | VII. | [[underline]]SYSTEM FOR INTERNAL PROGRAM EVALUATION[[/underline]] | | | | A. [[underline]]Situation[[/underline]]: Develop a method to evaluate all program activities related to EEO. | | | | 1. Require the director of each bureau (EEO officers) to submit a semi-annual report indicating progress made toward meeting SI's staffing goals and the current status of each project mentioned in their Affirmative Action Plans | Sept. '76, March, and Sept. of each year | | Responsible Official: Heads of organization units with assistance of subordinate managers and supervisors. | | | 2. Monitor recruitment plans to assure that areas with large minority populations are included in recruitment visits. | Target date: Sept, 1976. | | Responsible Official: Director, OEO; SI Women's Coordinator; Sixteen Point Coordinator | | | 3. Evaluate reports recommending changes for improving the EEO program. Inform the Secretary of progress in major areas of concern. | Ongoing. | | Responsible Official: Director, OEO | | VIII. | [[underline]]PROMPT, FAIR AND IMPARTIAL PROCESSING OF COMPLAINTS OF DISCRIMINATION AND EQUAL EMPLOYMENT OPPORTUNITY COUNSELING[[/underline]] | | | | A. Insure that part-time counselors are trained to serve needs of Smithsonian Institution employees. Select and train additional counselors as needed to provide assistance and to serve in the absence of the principal counselor. | Action accomplished. (Announcement of new counselors dated April 15, 1976 closed.) | | Responsible Official: Director, OEO | | | B. Provide and assure competence and availability of trained EEO investigators responsible for investigating complaints of discrimination. | Investigators obtained from Civil Service Commission. | | Responsible Official: Director, OEO [[/3 column table]]

[[3 column table]] | ACTION ITEMS | RESULTS [[line across page]] | | | C. Meet with all EEO counselors and investigators to discuss objectives in processing complaints and review problems. | Monthly meetings held and are continuing. | | Responsible Official: Director, OEO | | | D. Review and discuss personnel management matters with all EEO Officials. | EEO Officials meet together semi-annually for this purpose. In addition, Director EO meets with each EEO Official on special problems. | | Responsible Official: Director, OEO; OPersA | | | E. Review complaint files, monthly reports, etc. | Responsible Official: Director, OEO. | | | F. Assure timely processing of complaints for final decision within 180 day limitation. | Responsible Official: Director, OEO | | Action not accomplished. Processing time averaged 254 days. | | IX. | [[underline]]SPECIAL PROGRAMS OF EMPLOYMENT AND TRAINING FOR THE ECONOMICALLY OR EDUCATIONALLY DISADVANTAGED[[/underline]] | | | A. [[underline]]Situation[[/underline]]: SI's programs for the educationally and economically disadvantaged, the handicapped and the Worker Trainee Program require a breakdown of minorities and women enrolled in the programs. | | | | 1. Require that the bureaus report on their quarterly activities. | Reports rec | | Responsible Official: Bureau Heads [[/3 column table]]

-103- [[underline]] PART C. REPORT OF ASSESSMENT [[/underline]] I. [[underline]] Organization and Resources [[/underline]] Various criteria are established to measure productivity and cost effectiveness of EEO staff. Feedback from various EEO-responsive SI organizations and individuals is evaluated for program receptivity. Monthly meetings are held with the Union's EEO Oversight Committee which informs the OEO Director of the Union membership's EEO perception. Monthly meetings are held with EEO Counselors and periodically with EEO Officers in which information is exchanged and evaluated. Numbers and types of complaints are evaluated to determine if employees are knowledgeable of the complaint process. The mechanism of complaint processing is monitored continually to determine if unusual delays have occurred. Managers and supervisors are surveyed periodically by the OEO Director to determine their knowledge of various EEO programs. Follow-ups are made of some supervisors who are receiving EEO training to note changes that take place in their respective organizations as a result of the training. In addition, the OEO Director has access to all the top officials. EEO Officers have direct access to the museum or major program directors. EEO Officials also have received training in EEO, personnel and management. Training is periodically updated through attendence by full-time staff at CSC courses and EEO seminars. Adequate management and fiscal controls are established to track resources devoted to the EEO Program. The program has an allocated line item budget. In addition, part-time EEO Counselors and EEO Officers report to OEO office time spent in EEO activity. EEO Officials have adequate authority as delineated in the Smithsonian Memorandum 763 revised, dated May 26, 1976. The Women's Coordinator and Upward Mobility Coordinator are full-time employees; therefore most of their time is devoted directly to their functions. The part-time coordinators, both women and Spanish-speaking, spend at least 20% of their time on EEO matters. In addition, each coordinator has full delegations of authority from the OEO Director to accomplish his or her program objectives. Alternative delegations of authority are not established in writing to handle complaints against EEO staff. However, where such complaints arise, the EEO Officer designated by the Secretary and reporting to him, would handle such complaints. Most EEO Officials with other principal assignments, devote at least 20% of their time to EEO program matters. Some counselors, in particular, spend more than 20% of their time. The EEO officers engaged in establishing or evaluating Upward Mobility programs in their areas also spend more than 20% of their time on EEO matters. There are, of course, some EEO Officials who spend less than 20% of their time. When an EEO Official is found to be unresponsive, that official is replaced.

EEO officials, particularly full-time staff, serve as technical advisors to the Office of Personnel Administration (OPersA). However, EEO Counselors do get problems which are personal in nature, rather than EEO. Counselors refer such problems to the responsible OPersA official and follow-up later to see if any action was taken. There is usually no difficulty in determining which office has jurisdiction. II. [[underline]] Discrimination Complaint [[/underline]] There are eighteen CSC trained counselors located throughout the various museums and geographical areas where the entities of the Smithsonian Institution are located. Employees may arrange for counseling at any time and may contact counselors other than those located within the locations where they are employed. All counselors have access to the head counselor, EEO officers and the Director of OEO which gives them adequate delegation to resolve the matters brought to their attention. The individuals previously mentioned are the ones involved in evaluation discussions relating to the respective counselor and his or her duty performance. In the complaint process procedure itself, there is a time-consuming factor: scheduling appointments with the involved persons and compiling the information so that a fair and logical decision may be reached. Although the process is under agency control, the time elements mentioned sometimes make for a longer period of time to elapse before a decision is reached. The investigators utilized by the Smithsonian Institution are trained persons from the Civil Service Commission and all EEO officers have sufficient delegations to prepare dispositions. Reviews of each EEO decision are made by the Director of Equal Opportunity. Once a month a complaint report is submitted to the alleged discriminating official's organizational Executive Committee member. Copies of these reports are also sent to the Assistant Secretary for Administration as well as to the Secretary. One problem that has arisen as a result of the Privacy Act and the Freedom of Information Act is the increased number of employee requests for copies of documents contained in their folders. This has placed an increased workload on the Office of Personnel Administration, but arrangements are being made to handle the extra work for a minimum fee.

-104- EEO Counseling activity experienced growth from July 1, 1975 to June 1976. The number of inquiries made of counselors rose to over 350, up from approximately 225 in previous years. And the number of employees filing formal complaints increased from an average eight (8) in past years to 13 during the period. An assessment of the activity is as follows: * Number of Employees: Total 3730; Public 2449; Private 781 Number of EEO Counselors: Grade levels: 1-GS-13; 7-GS-11; 4-GS-9; 1-GS-7; 1-GS-6; 1-WG-11; 2-WG-9; 1-WG-7; Total: 18 Number of inquiries made of counselors during period: 380 Number of employees counseled during period: 126 Number of complainants receiving corrective actions during period: 13 Number of employees who filed formal discrimination complaints during period: 13 Counselors and others who have been involved in the counseling process were surveyed in order to gain an informal sampling assessment of the counselor-complaint process. The sampling was oral rather than from a written form. The majority of those employees surveyed expressed confidence in their EEO counselors, viewed them as objective, empathetic, understanding, and responsive. The negative viewpoints expressed related to the way the counseling system operated, or to personal traits of particular counselors. Similarly this group of employees believed the counselor fully discussed the problems, and were satisfied with the counseling session. Over half of the employees were not satisfied with the end results and felt the matter they had brought to the counselor was not resolved and that no corrective action resulted. Practically all of the employees said their right to file a formal complaint was fully explained by the counselor and that no attempt was made to discourage them from filing formal complaints. Number of counselors felt management to be cooperative and fair and that their counseling efforts contributed to better management. A small group felt they were employee advocates. To a similar degree management viewed counselors as objective and generally indicated they tried to be responsive to the problems of the counselors. * Does not include temporary employees. Including temporaries, total employment would be 4735.

Processing time for complaints increased substantially. Two actions added to the length of time: (1) the time lag from the receipt of the Investigation Report from the Civil Service Commission to the receipt by the complainant of the disposition of his/her case; and (2) the time lapse from the end of a hearing held by the Civil Service Commission to the receipt of the Hearing Examiner's findings by the complainant and the Smithsonian Institution. Attempts are being made to considerably shorten both actions, including personal visits by the Director to encourage a speed-up of the process. It should be mentioned however, that where six months have elapsed from the time of the hearing to the receipt of the Examiner's report, the time lag has been due to an extremely heavy overload of some 40 cases per CSC Examiner, which precludes the examiner from making an expeditious recommended decision to the Secretary, S.I. Problem Statement: the time lag from the receipt of the Investigation Report from the Civil Service Commission to the receipt by the complainant of the disposition of his/her case.

-105- III. [[underline]] Recruitment [[/underline]] Generally, present recruitment sources have provided qualified minority and female applicants who meet organizational needs. The Institution intends to maximize the recruitment effort in scientific fields, although traditionally, these fields have not attracted minority and/or female applicants. Position vacancies are open to all Smithsonian Institution employees on a non-restrictive basis. Qualification requirements and hiring procedures have been examined, and no barriers to EEO exist. The Office of Personnel Administration periodically reviews the interview and screening process to assure that it is operating on an equitable basis, and reviews the qualification requirements for each position to assure that such requirements are reasonable and do not discriminate against minorities and/or females. The recruitment bulletin is issued on a weekly basis, containing a positive statement that all positions are filled without regard to race, sex, national origin, etc. This bulletin is mailed to many schools, including those with large minority and female enrollment. EEO officials do not participate in the development of new-hires estimate report data, however, they do review and approve all personnel actions before they are effected, to assure that consideration has been given to minority and female candidates. Present sources do not provide qualified minority and/or female applicants in many specialized scientific fields. IV. [[underline]] Full Utilization of Skills and Training [[/underline]] The institution has not conducted a survey of manpower utilization of skills and training. The current practice relies primarily on voluntary applications from employees, who list their skills and training when applying for specific vacancies. This system emphasizes the responsibility of each employee to inform the Office of Personnel Administration of his/her current skills and training when applying for a specific vacancy under a merit promotion vacancy announcement. Specific and general instructions on applying for such vacancies are contained in the weekly Recruitment Bulletin. Neither a time-in-grade study, to determine whether differentials exist by minority status and sex, nor a study to examine relative upward movement of employees to full performance has been conducted. However, an ad hoc survey has been conducted to determine the level of upward mobility available to lower-level employees.

V. [[underline]]Upward Mobility[[/underline]] The lack of a Smithsonian Institution-wide progam has been the greatest impediment to an effective Upward Mobility Program, as well as the need for a clear policy with strong top level support to provide adequate resources. Existing Upward Mobility programs are beset with weaknesses relative to uniformity, policy, and compliance with FPW 713-27. Participating bureaus and major offices now are aware of these problems and want to do something about them. In this connection, the Institution is initiating a new comprehensive approach to improve the state of Upward Mobility throughout the Institution in general, and to facilitate the efforts of bureaus and major offices specifically. Primarily, the impact of the comprehensive approach will be in the areas of planning and program development at the bureau and major office levels, where previous Upward Mobility programs have been designed to maintain autonomy and to meet the peculiarity of the organization, under a decentralized system. Central coordination, which is essential but has not been included in previous Upward Mobility programming, is another benefit of the comprehensive approach that should remedy many of the problems, especially those associated with organizing the Institution's resources. The Institution does not identify systematically target jobs and manpower needs. However, the Institution's efforts in these areas, including career counseling and more coordination between EEO and the Office of Personnel Administration, will be maximized under the new Upward Mobility Plan, which has been designed to: (1) have operating officials, at the initial planning stage, participate in identifying dead-end jobs, take the lead in restructuring their organizations where appropriate, and contribute information as to the performance potential and motivation of individuals; (2) establish a training agreement between the Smithsonian Institution and the Civil Service Commission that ensures merit based selection in accordance with upward mobility criteria, career counseling services for participating and interested employees, close monitoring and systematic evaluation of upward mobility programs and trainees' progress, and individualized development plans for trainees to qualify for target jobs; (3) require intimate coordination between EEO and Office of Personnel officials in their efforts to improve and expand advancement opportunities for lower-level employees.

-106- VI. [[underline]] Supervisory and Management Commitment [[/underline]] All new supervisors have been given the required 80 hours of training, including 16 hours of training designed to promote their understanding and support of equal employment opportunity. This practice is ongoing, and includes scheduled courses for supervisors who have not had formal supervisory training. Incentive awards for contributions to EEO are available to supervisory and managerial personnel, but no such awards have been granted during the past fiscal year. However, in this connection, the Institution did award twenty (20) Women's Program Certificates of Appreciation during FY-76. This award will be presented annually, in recognition of any Smithsonian Institution employee(s), groups, office, or other individual(s) who has made significant contributions to the SI Women's Program. Under the Institution's new performance evaluation program, scheduled for implementation in FY-77, performance evaluations of supervisory and managerial personnel will include specific items evaluating their understanding and support of equal employment opportunity. VII. [[underline]] Community Outreach [[/underline]] The Equal Opportunity staff is quite active in community outreach programs. The Director of Equal Opportunity serves on the Board of Directors of D.C. Parent and Child Center Inc., and is President of Neabsco Elementary School Parent and Teachers (PTA), President of Association for Black Equality (ABLE), and President-elect of the International Personnel Management Association (IPMA) D.C. Chapter. The Spanish-speaking Coordinator is pursuing the possibility of having a work/study program with the New Mexico Highlands University, whereby Spanish-speaking college students would actually serve as interns. The Women's Program Coordinator maintains regular contact with organizations such as Federally Employed Women (FEW), National Association of University Women, IWY, Parent and Child Center Inc., and many more. Cooperative efforts are maintained on a regular basis with the Minority and Female Professional Recruiter's Association where current vacancy lists, as well as applications of persons seeking employment are exchanged. Contacts are maintained on a continuous basis with the Urban League, NAACP and the National Congress of American Indians.

The Renwick Gallery has published a pamphlet in Spanish on a current Bicentennial Exhibition, [[underlined]] Signs of Life: Symbols of the American City. [[/underlined]] This exhibition in itself is a special tribute to the rich heritage of decorative arts in Latin American. Key figures in the Spanish-speaking community and the Spanish-speaking coordinators will be invited to the opening festivities. Tours of the exhibition will also be encouraged. The National Collection of Fine Arts sponsors a work-study program which hires students for the summer and a teaching program which teaches graphics to local children. Members of the OEO staff participate as guest lecturers and attend private organization seminars. The EEO plan is developed through an analysis of statistical data, assessment of the current EEO posture, (as revealed by past EEO surveys) and consultations with various groups such as the Union, EEO Committee, Women's Council, EEO Officers and Counselors and other interested employees. An analysis of Complaint activity provides evidence of specific problem areas as well as an indication of effectiveness of the complaint mechanism. From a review of the above sources, specific problem situations are identified, which in turn are transformed into objectives or action items. Program evaluation, while not set up as a formal process, is a continuing effort conducted jointly by the Office of Equal Opportunity and the Office of Personnel Administration. Other employee interested organizations such as the Union and Women's Council provide continuing contact for measuring receptivity and acceptance of EEO programs. The Executive Committee and key staff administrators assure continuing emphasis for the Smithsonian's EEO commitment and its priority to all Smithsonian officials.

-107- Part D. - [[underline]] Planned Affirmative Actions [[/underline]] II. Discrimination Complaints [[four column table]] [[underline]]Objective[[/underline]] | [[underline]]Actions[/[underline]] | [[underline]]Responsible Official[[/underline]] | [[underline]]Target date [[/underline]] A. To reduce the time for processing EEO complaints from the current average of 254 days per case to less than 180 days per case, by March 1, 1977. | 1. Implement training of 3 additional EEO Investigators by December 15, 1976. | Director, OEO | June, 1977 | | | Director, OEO | 2. EEO Officers will issue Proposed Disposition letter to Complainant within 14 days of receipt of EEO complaint investigative record from the Office of Equal Opportunity. | Director, OEO | December 1977 | | | | 3. Frequent communication with CSC following Hearing to obtain Examiner's recommended decision, including written follow-up if Hearing Examiner recommended decision not received within 60 days following conclusion of Hearing | Director, OEO | December 1977

III [[underline]] Recruitment [[/underline]] [[begin four column table]] [[underline]] | Objective | Actions | Responsible Official | Target date | [[/underline]] | A. To hire and promote more minorities and women at GS-13 and above / Director, OPersA | 1. Concentrate efforts to employ minorities in occupations listed in chart 4, particularly in library field where turnover and availability indicate a change could be realized quickly. | Bureau Heads / Director OPersA / Director, OEO | Aug. 31, 1977 | | | 2. Before recruitment action is taken to fill a vacancy at grade levels 13 and above or in any of the occupations on chart 3, the vacancy will be reviewed by the bureau head or office director advertising the vacancy; a special recruitment plan will outline the steps to be taken to locate minority and women candidates. The offices of Personnel Administration and Equal Opportunity will actively assist in developing this plan, and will review with the supervisors the qualifications required for each position. This review will assure the elimination of qualifications which are unnecessary and which might inhibit competition by minorities and women. | Bureau Heads / Directors | June 30, 1977 |

-108- [[begin four column table]] [[underline]] | Objective | Actions | Responsible Official | Target date | [[/underline]] | | | | | | | B. To hire and promote more minorities and women. / Director, OPersA | 3. Selection of candidates for appointment to all professional, administrative, technical, and supervisory positions at IS-7, GS-7, and Wage Grade-7 and above will be forwarded to the Office of Personnel Administration with a statement from the selecting official summarizing the extent of his/her efforts to recruit members of a minority group, including women, for the particular position. Action must be reviewed for EEO implications by the Office of Equal Opportunity before final selection. | Director, OPersA / Director, OEO / Heads of Organization units | Sept. 1977 |

V. [[underline]] Upward Mobility [[/underline]] [[begin four column table]] [[underline]] | Objective | Actions | Responsible Official | Target date | [[/underline]] | | | | | | A. To establish an Institution-wide Upward Mobility Program in accordance with Civil Service Commission guidelines. / Upward Mobility Coordinator | 1. Execution of an Upward Mobility policy in handbook form, focusing on affirmative action to facilitate the development and implementation of specific career opportunities for lower grade employees at bureau and office levels. | Upward Mobility Coordinator | Nov. 1, 1976 | | | 2. Establishment of a comprehensive Upward Mobility Program, including an Upward Mobility training agreement, developed for Civil Service Commission approval to facilitate qualifying employees below GS-9 or equivalent to meet X-118 Standards for positions with greater growth through special training, education and/or on-the-job training experience. | Upward Mobility Coordinator | Oct. 1, 1976 | | | | | | | | a. The estimated number of lower level employees who will participate in one or more upward mobility program activities who are expected to be promoted or reassigned into. | | | | | 1. The same occupational series.....18 | | | | | 2. A different occupational series..13 | | | | | b. The estimated number of lower level employees who will participate in one or more upward mobility program activities who are not expected to be promoted nor reassigned..........................10 | | |

-109- [[begin four column table]] [[underline]] | Objective | Actions | Responsible Official | Target date | [[/underline]] | A. To establish an Institution-wide Upward Mobility Program in accordance with Civil Service Commission guidelines. / Upward Mobility Coordinator | 3. Approval needed for position ceilings and resources to support five employees in the initial Institution-wide Upward Mobility Program. | Upward Mobility Coordinator | Oct. 1, 1976 | | | | | | | | 4. Bureau and office managers will be solicited to participate in Upward Mobility programming, committing a portion of their anticipated vacancies in administrative, technical, professional, craft, trade and labor occupations, in an effort to diversify the employee population in those careers. | Upward Mobility Coordinator | Sept. 1976 | | | | | | | B. To provide greater trainingopportunities to employees who are eligible for GED training. / Chief, Training Division (OPersA) | 1. Coordinate a conceptualized GED Program with Washington area GED centers to include 25 to 100 S.I. employees for training, during 1977. | Director, OPersA / Upward Mobility Coordinator | Nov., 1976 | | | | | | | | 2. Submit program to Office of Personnel Administration for approval and for implementation. | Director, OPersA / Upward Mobility Coordinator | Jan., 1976 |

PERMANENT EMPLOYEES BY PAY CATEGORY, GRADE, AND SALARY - April, 1975 [[nine column table]] | Pay Category | Total Employment | Total Minorities % | Negro % | Spanish Surnamed % | American Indian % | Oriental % | Other % | Women % | | | | | | | | | | | | Total White Collar and Blue Collar | 3584 | 1252 34.9 | 1143 31.9 | 62 1.7 | 6 0.2 | 41 1.1 | 2332 65.1 | 1258 35.0 | [[double line across table]] | | | | | | | | | | | [[underline]] WHITE COLLAR [[/underline]] (Professional, Administrative, Clerical) | 2963 | 854 28.8 | 759 25.6 | 48** 1.6 | 6 0.2 | 41 1.4 | 2109 71.2 | 1179 39. | | | | | | | | | | | | [[underline]] Grade Levels Salary* [[/underline]] | | | | | | | | | | 1 - 4 $5,300 - 9,900 | 596 | 355 59.6 | 332 55.8 | 15 2.5 | | 8 1.3 | 241 40.4 | 255 42.8 | | 5 - 8 $8,500 - 15,100 | 951 | 323 34.0 | 291 30.6 | 17 1.8 | 4 0.4 | 11 1.2 | 628 66.0 | 557 58.6 | | 9 - 12 $12,800 - 24,000 | 852 | 150 17.6 | 120 14.1 | 11 1.3 | 2 0.2 | 17 2.0 | 702 82.4 | 298 35.0 | | 13 - 15 $21,800 - 36,000*** | 491 | 25 5.1 | 15 3.1 | 5 1.0 | | 5 1.0 | 466 94.9 | 66**** 13. | | 16 - 18 $34,600 - 36,000*** | 62 | 1 1.6 | 1 1.6 | | | | 61 98.4 | 3 4.8 | | Executive $36,000 - up | 11 | | | | | | 11 100.0 | | | | | | | | | | | | | [[underline]] BLUE COLLAR [[/underline]] | | | | | | | | | | | | | | | | | | | | 1 - 13 $3.56/hr. - 9.72/hr. | 621 | 398 64.1 | 384 61.8 | 14***** 2.3 | | | 223 35.9 | 79 12.7 | [[/nine column table]] *Lowest salary shown would be lower for employees at Smithsonian Tropical Research Institute (STRI). ** Includes 24 employees of STRI, primarily Panamanian citizens. *** Pay limited by Federal Pay Act to maximum rate shown. **** Includes 5 minority women (2 Negro and 3 Spanish-surnamed at STRI) at grades 13 and above. ***** Includes 8 employees of STRI, primarily Panamanian citizens.

-110- PERMANENT EMPLOYEES BY PAY CATEGORY, GRADE, AND SALARY - April, 1976 [[nine column table]] | Pay Category | Total Employment | Total Minorities % | Negro % | Spanish Surnamed % | American Indian % | Oriental % | Other % | Women % | | | | | | | | | | | | Total White Collar and Blue Collar | 3730 | 1301 34.8 | 1199 32.1 | 58 1.5 | 5 0.1 | 39 1.0 | 2429 65.1 | 1306 35.0 | [[double line across table]] | | | | | | | | | | | [[underline]] WHITE COLLAR [[/underline]] (Professional, Administrative, Clerical) | 3064 | 888 28.9 | 807 26.3 | 37*** 1.2 | 5 0.1 | 39 1.2 | 2176 71.0 | 1224 39.9 | | | | | | | | | | | | [[underline]] Grade Levels Salary* [[/underline]] | | | | | | | | | | 1 - 4 $5,300 - 9,900 | 577 | 356 61.7 | 339 58.7 | 10 1.7 | | 7 1.2 | 221 38.3 | 234 40.5 | | 5 - 8 $8,500 - 15,000 | 1011 | 356 35.2 | 327 32.3 | 15 1.4 | 3 0.3 | 11 1.0 | 655 64.7 | 598 59.1 | | 9 - 12 $12,800 - 24,000 | 923 | 147 15.9 | 124 13.4 | 7 0.7 | 2 0.2 | 14 1.5 | 776 84.0 | 320 34.6 | | 13 - 15 $21,800 - 36,000** | 491 | 28 5.7 | 16 3.2 | 5 1.0 | 0 0.0 | 7 1.4 | 463 94.3 | 70**** 14.2 | | 16 - 18 $34,600 - 36,000** | 55 | 1 1.8 | 1 1.8 | | | | 54 98.1 | 2 3.6 | | Executive $36,000 - up | 7 | | | | | | 7 100.0 | | | | | | | | | | | | | [[underline]] BLUE COLLAR [[/underline]] | | | | | | | | | | | | | | | | | | | | 1 - 13 $3.56/hr. - $9.72/hr. | 666 | 413 62.0 | 392 58.8 | 21***** 3.1 | | | 253 37.9 | 82 12.3 | [[nine column table]] * Lowest salary shown would be lower for employees at Smithsonian Tropical Research Institute (STRI). ** Pay limited by Federal Pay Act to maximum rate shown. *** Includes 18 employees of STRI, primarily Panamanian citizens. **** Includes 2 minority women (1 Negro and 1 Spanish-surnamed at STRI) at grades 13 and above. ***** Includes 12 employees of STRI, primarily Panamanian citizens.

PERMANENT EMPLOYEES IN CORE POSITIONS [[nine column table]] | | Total Employment | Total Minorities % | Negro % | Spanish Surnamed % | American Indian % | Oriental % | Other % | Women % | | | | | | | | | | | | April 1976 - Totals | 375 | 21 5.6 | 7 1.9 | 5 1.3 | 1 0.3 | 8 2.1 | 354 94.4 | 63 16.8 | [[line across table]] | | | | | | | | | | | [[underline]] Grade Levels Salary* [[/underline]] | | | | | | | | | | Below 13 $24,000 down | 110 | 14 12.7 | 7 6.4 | 2 1.8 | 1 0.9 | 4 3.6 | 96 87.3 | 37 33.6 | | 13 - 18 $21,800 - 36,000 | 265 | 7 2.6 | 0 0 | 3 1.1 | 0 0 | 4 1.5 | 258 97.4 | 26 9.8 | | | | | | | | | | | [[line across table]] | October - 1974 - Totals | 361 | 14 3.9 | 4 1.1 | 6 1.7 | 0 0 | 4 1.1 | 348 96.4 | 58 16.1 | [[line across table]] | | | | | | | | | | | [[underline]] Grade Levels Salary* [[/underline]] | | | | | | | | | | Below 13 $24,000 down | 112 | 8 7.1 | 2 1.8 | 2 1.8 | 0 0 | 4 3.6 | 104 92.9 | 36 32.1 | | 13 - 18 $21,800 - 36,000 | 249 | 6 2.0 | 2 0.4 | 4 1.6 | 0 0 | 0 0 | 244 93.0 | 22 8.8 | [[/nine column table]] Occupational Series Listed Above Are: Historian 170 Anthropologist 190 Archeologist 193 Biologist 401 Microbiologist 403 Zoologist 410 Entomologist 414 Botanist 430 Physiologist 435 Geneticist 440 Wildlife Biologist 486 Aero-Space Engineer 861 Curator 1015 Physicist 1310 Chemist 1320 Astronomer/Astrophysicist 1330 Geologist 1350 Oceanographer 1360

-111- OCCUPATION HAVING TWENTY OR MORE EMPLOYEES WHICH HAVE MINORITY AND/OR WOMEN REPRESENTATION BELOW FEDERAL NATIONAL PERCENTAGE THROUGHOUT FEDERAL SERVICE [[underline]]OCCUPATION HAVING TWENTY(20) OR MORE EMPLOYEES WHICH HAVE MINORITY AND/OR WOMEN REPRESENTATION BELOW FEDERAL NATIONAL PERCENTAGE THROUGHOUT FEDERAL SERVICE[[/underline]] [[eleven column table]] [[underline]] OCCUPATION HAVING TWENTY(20) OR MORE EMPLOYEES WHICH HAVE MINORITY AND/OR WOMEN REPRESENTATION BELOW FEDERAL NATIONAL PERCENTAGE THROUGHOUT FEDERAL SERVICE | OCCUPATION | TOTAL | MINORITY % | FEDERAL MINORITY % | N | SS | I | O | OTHER | WOMEN % | FEDERAL MINORITY WOMEN % | | | | | | | | | | | | | Zoologist - GS-410 | 34 | | 3.2 | | | | | | 3 8.82 | 7.3 | | Curator -GS-1015 | 76 | 1.32 | 2.1 | | 1 | | | | 17 22.37 | 28.9 | | Physicist -GS-1310 | 21 | | 3.8 | | | | | | 1 4.76 | 2.4 | | Astronomer/Astrophysicist GS-1330 | 23 | | 3.8 | | | | | | 1 4.35 | 3.8 | | Geologist -GS-1350 | 28 | | 1.5 | | | | | | 1 3.57 | 5.8 | | Librarian -GS-1410 | 35 | 5.71 | 10.4 | 1 | 1 | | | | 22 62.86 | 75.9 | [[/eleven column table]]

1977 Planned Ratio External to Internal Staffing [[three column table]] [[underline]]Grade Levels[[/underline]] | [[underline]]External Actions[[/underline]] | [[underline]]Internal Actions[[/underline]] 1 - 4 | 161 | 75 5 - 8 | 34 | 100 9 - 12 | 26 | 46 13 - 15 | 3 | 10 16 - 18 | [[underline]] 0[[/underline]] | [[underline]] 0[[/underline]] | 231 | 224

-112- [[underlined]] Status Report on Major Construction [[/underlined]] [[underlined]]Study Center and Library Addition to the National Museum of History and Technology [[/underlined]] The design contract with the General Services Administration for a sixth floor addition to the National Museum of History and Technology Building for the Museum's library and for its collections of archival material and graphic Americana is now 80% complete and will be 100% completed by late summer. If the appropriation request of $7,100,000 in the fiscal year 1978 budget to Congress is approved, contracting should commence by the second quarter of fiscal year 1978. The construction period is estimated at two years, with beneficial occupancy occurring in the second quarter of fiscal 1980. [[underlined]] National Zoological Park [[/underlined]] The education and administration building located near the Connecticut Avenue entrance was completed in January 1977, and is now occupied. The building contains a 300-seat auditorium for the public and three classrooms for school and public use. Under construction are new bear exhibits consisting of one new facility for grizzly bears, the second new facility for polar bears, and renovation of existing bear exhibits. The grizzly and polar bear exhibits will be completed by July of this year and the renovation of the existing bear exhibits by the fall. A necropsy facility to accommodate autopsy work on small and large animals is under construction and will be finished in June of this year. This facility will include a pathological incinerator for on-site disposal of potentially infectious carcass materials. The general services and parking facility which will provide new housing

-113- for the commissary, maintenance shops, other zoo service activities, and parking for 300 cars on its roof is scheduled to be completed in the fall of 1977. A construction contract was awarded in November 1976 for the beaver valley project to accommodate beavers, otters, seals, sea lions, and wolves. This project is being done on the fast-track method with construction started while design continued. Beaver valley is estimated to be completed in early 1978. Currently in design are new facilities for the central area to provide for the great apes, monkey island, and renovation of the existing small mammal and reptile houses. [[underlined]] Front Royal Conservation and Research Center [[/underlined]] Work is substantially complete on a new commissary facility. During the summer small cats and bird rearing facilities will be completed. Currently under construction is the installation of a new electrical distribution system. This project, scheduled for completion in June, will modernize and bring the primary electrical distribution system in line with existing safety standards for a rural location. Construction will be started soon on miscellaneous improvements including the Elds deer facility, camel barn repars, dormitory improvements, and a new shed for the onagers.

-114- [[underlined]] Smithsonian Book Publishing Task Force [[/underlined]] Mr. Ripley reported that since its inception last September, the Institution's Book Publishing Task Force, headed by James K. Page of the [[underlined]] Smithsonian [[/underlined]] Magazine, has explored various avenues to book publishing for the Smithsonian. A small test mailing of questionnaires to sample the reading habits and subject matter preferences of the National Associates, the prime market for Smithsonian books, met with much enthusiasm, particularly with regard to the prospect for a large format, highly illustrated book about the Institution itself. An up-to-date book on Smithsonian activities has been needed for some time. Following a review of the Task Force's report in early March 1977, which included the results of the questionnaire and a general outline of the Smithsonian book, it was decided that the Task Force should continue this study effort and that work should proceed on this volume, now entitled [[underlined]] The Smithsonian Experience: Science, History, the Arts and the Treasures of the Nation. [[/underlined]] While work is continuing on the book, the companion effort is to have by the end of June 1977 the results from a direct mail test to some 30,000-40,000 Associates. The test will establish (1) whether the book will be saleable in sufficient quantity to make it financially worthwhile, (2) what is the best price, and (3) how many to print. In addition, the Task Force is examining other avenues of sales, i.e., retail, book clubs, premiums and so forth.

-115- Based on this analysis, a decision will be made in early July whether to continue work on the book aiming for fall and Christmas sales. In addition to these efforts, the Task Force is continuing to study the merits of extending this one-book publishing project into a continuing program. Further information will be developed as to this specific book, alternative means of publishing and costs, and will be reported to the Board of Regents as the study progresses.

-116- [[underlined]] Mall Underground Parking [[/underlined]] Mr. Ripley reported that the Smithsonian staff is continuing to review the early development of Mall underground garages as the most useful solution to the visitor parking dilemma. A study completed for the Institution last year presented a parking development program designed to provide staged construction of 3,200 parking spaces beneath the center treeless panels of the Mall. Phase I of the proposed development would provide 1,400 spaces between the 12th and 14th Streets at an estimated cost of about $11-12 million under federal financing and $13-14 million with private financing. The additional $2 million represents an eight percent capitalized interest charge for the estimated two-year construction period. After numerous discussions with the firm preparing the study report, the Smithsonian has arrived at a preliminary concept to finance Phase I of the underground parking development plan without the use of federal funds. This lease-purchase concept for a turn key project would involve financing, design and construction using private funds. The company's projections indicate that revenues from parking fees could amortize the development costs over a 35-year period. They have investigated, on a preliminary basis, whether potential lenders would be interested in this type of venture. From all indications, it seems possible to acquire private financing, and several contractors have indicated

-117- interest in performing the proposed construction work. The significant differences that make this lease-purchase concept more attractive at the present time are the reduction in interest rates and the slowdown in construction activities. While continued efforts will be made to interest the Department of the Interior in developing this facility, it can be assumed that, as the most directly involved organization, the Smithsonian will be expected to take the lead. If so, the following actions will be necessary: 1. Seek legislation to authorize use of the Mall areas for underground garage construction. This would be necessary regardless of the method for financing construction since the original "Smithsonian Institution Park" reservation does not extend to the proposed construction site. 2. Review SI authority to enter into a possible lease-purchase agreement in the event that this development method might be selected. 3. Prepare and process an Environmental Impact Statement and develop functional plans for a more detailed presentation of the project. 4. Seek cooperation and support for the project from the District of Columbia, National Capital Planning Commission, National Park Service, Council of Governments, and other interested parties.

-118- [[underlined]] 1977 Festival Activities [[/underlined]] Following numerous discussions within the recently appointed Folklife Advisory Council and between the Division of Performing Arts, the Folklife Unit of the Office of American Studies and various Smithsonian museums, a tentative plan has emerged for two principal festive events to take place later this year. First, following the pattern of outdoor programming for the July 4 holiday weekend established over the past ten years, the National Museum of History and Technology (NMHT) and the Division of Performing Arts are actively at work developing a modest festival of American popular culture to be held in and around the NMHT July 2-4. The general structure for the Independence Day celebration will encompass traditional ways that the Fourth has been celebrated throughout our history with band music, oratory, and supporting activities. Later in the year, over the Columbus Day holiday weekend, the Smithsonian's annual Folklife Festival has been scheduled. The period from Wednesday, October 5, through Monday, October 10 is now set aside for the renewal of our annual presentation of practioners of folk arts and crafts. This event is being developed by museum staff, with the active assistance of the Folklife Unit, and will be staged by the Division of Performing Arts.

-119- The above plan will serve several ends. It will make possible the presentation of certain aspects of American popular culture which are not germane to a "folklife" festival [[underlined]] per se. [[/underlined]] It will continue our practice of offering local residents and midsummer tourists an event both entertaining and educational over the July 4 period. It will further develop our competence in the presentation of folklife by involving museum curators in the planning and execution of the Folklife Festival to an extent not achieved in previous years. And it will move this event, scaled down to its pre-Bicentennial size, to a period of the year with better weather and more manageable crowds. Although fund raising for both events will be required, we anticipate a positive response from the private sector, building upon the good relationships established over the ten-year history of Smithsonian festivals.

-120- LITIGATION REPORT [[underlined]] New Cases [[/underlined]] 1. Petition of the United States, on Behalf and for the Benefit [[underlined]] of the Smithsonian Institution, Trustee [[/underlined]] A petition requesting the court to construe certain provisions of the J. Seward Johnson Trust Fund was filed in the U. S. District Court for the District of Columbia by the Department of Justice on behalf and for the benefit of the Smithsonian Institution, trustee, on February 24, 1977. On April 11, 1977, a joint motion of Harbor Branch Foundation, Inc., and J. Seward Johnson to intervene was filed. Preliminary rulings on submissions are pending. 2. [[underlined]] Lacey Act Investigation at the National Zoological Park [[/underlined]] A Federal investigation for violation of the Lacey Act (prohibiting the acquiring or receiving of animals improperly or unlawfully exported from their countries or States of origin) and possibly other laws is being conducted by the U. S. Attorney's Office in Philadelphia, Pennsylvania. The investigation includes potential violations by National Zoological Park personnel. 3. [[underlined]] Morrissette [[/underlined]] v. [[underlined]] United States [[/underlined]] This suit, filed in the United States Court of Claims on February 11, 1977, arises out of the default of a contractor for the "Nation of Nations" exhibit in the National Museum of History and Technology. Upon default, the Smithsonian completed the project and paid subcontractors and materialmen claims from surety bonds. The surety is attempting to recover approximately $90,000. The Department of Justice is handling this case. [[underlined]] Developments in Cases Previously Reported [[/underlined]] 1. [[underlined]] Precure [[/underlined]] v. [[underlined]] United States and John Naveau [[/underlined]] As previously reported, this suit was filed April 21, 1976, against the United States and a Smithsonian security guard because of an incident in the Gem Hall of the National Museum of Natural History when a 17-year-old boy was placed under arrest for tampering with the

-121- alarm apparatus underneath a gem display case, and his father for interference with an officer. The complaint alleges false arrest, malicious prosecution, and other improprieties, and seeks compensatory and punitive damages. Initially, the Department of Justice undertook representation of all defendants, but later determined that the guard should have the benefit of independent counsel. Accordingly, the guard has now retained a private attorney at the expense of the Department of Justice. The case is still in its preliminary stages. 2. [[underlined]] Winston [[/underlined]] v. [[underlined]] Smithsonian Science Information Exchange [[/underlined]] As previously reported, this suit was filed in the U. S. District Court for the District of Columbia by four former SSIE employees, alleging that the SSIE and President Hersey have engaged in discriminatory employment practices. On March 25, 1977, the Court denied plaintiffs' motion for certification as a class action; it is not known whether this decision will be appealed. The named plaintiff has been allowed to proceed with his claim, and a pretrial conference will be held in the near future. 3. [[underlined]] Scott [[/underlined]] v. [[underlined]] Ripley [[/underlined]] This suit, alleging racial discrimination, went to trial on April 6, 1977, in the D. C. District Court. The Court, finding no discrimination, dismissed the complaint. It is not known whether plaintiff will appeal this decision.

-122- [[underlined]] Report on the National Associates Board Meeting [[/underlined]] Mr. Ripley reported that the National Board of the Smithsonian Associates held its second "off-campus" spring meeting in Minneapolis, Friday and Saturday, April 22-23. The meeting gave members an opportunity to participate in one of the increasingly popular and successful Associates Regional Programs. Fourteen members, including Regent and Associates Board founder Thomas J. Watson, Jr., attended, many with spouses. The central focus of the agenda was Smithsonian "Outreach" activities, including the Associates Regional Program, the slide-sleeve and slide-cassette development program (funded partially by a grant from the Merrill Trust by Board member Doris Magowan), the Telecommunications Center and "Smithsonian World" Public Broadcast Series, [[underlined]] Smithsonian [[/underlined]] Magazine, SITES, the James Smithson Society, and the GAO Report and SI financial picture. In addition, the Board unanimously adopted its Nominating Committee Report, and membership invitations will be extended to Mrs. Jackson Burke (St. Paul) and Messrs. William T. Coleman, Jr. (Philadelphia), Gaylord Donnelly (Chicago), James M. Kemper, Jr. (Kansas City), and Vernon F. Taylor, Jr. (Denver). Of particular and poignant importance is the fact that this meeting marks the completion of the terms of the nine original members of the Board. These nine members -- Messrs. Richard Cooley, Joseph Cullman, Leonard Firestone, Alfred Glassell,

-123- William Hewitt, Lewis Lapham, Francis Rooney, Merritt Ruddock and Thomas Watson -- will become Honorary members in recognition of their loyalty and assistance over the last six years. Also, special recognition has been given to Nelson Rockefeller and Lady Bird Johnson in conferring Honorary Board membership upon them. Invitations have been extended to over 500 prospective members of the James Smithson Society. To date 45 acceptances have been received. A further mailing in May is anticipated. The highlight of membership in the James Smithson Society will be the joint James Smithson Society-National Associates Board dinner on October 14, when the National Associates Board will meet again in Washington. The Regents are urged to participate if at all possible.

-124- [[underline]] "Kin and Communities: The Peopling of America" Symposium [[/underline]] As an analogue to a university convocation, the first Smithsonian symposium since the 1973 observance of the Copernican quincentennial will open June 14 in Washington on the theme, "Kin and Communities: The Peopling of America." Smithsonian and guest scholars, along with public officials, educators and media specialists, will address themselves to three questions: Where did Americans come from and why? What happened after they got here? And whither kinship? The Symposium will generate a book, articles in journals and newspapers, and videotape cassettes for use in colleges and universities interested in curriculum which links the humanities and sciences. Special exhibits and film showings are planned around family history themes to coincide with the Symposium. The Copernicus celebration produced the highly praised volume, [[underline]] The Nature of Scientific Discovery [[/underline]], edited by Professor Owen Gingerich of the Smithsonian's Astrophysical Observatory. Under the chairmanship of Dr. Margaret Mead, the June 14-17 Symposium brings a focus elements of a two-year educational program designed originally for the Bicentennial and aimed nationally at encouraging American facilities to learn something of world history and American history through themselves. The Symposium is organized and financed through initiatives of the Office of Smithsonian Symposia and Seminars directed by Wilton S. Dillon.

-125- Mrs. Jimmy Carter will participate in the opening ceremony scheduled for 10:30 a.m., Tuesday, June 14th, at the Eisenhower Theater, the Kennedy Center. Senator Barry Goldwater has been asked to make some remarks at a luncheon following the ceremony. Detailed programs will be mailed directly to the Regents.

-126- [[underline]] OTHER BUSINESS [[/underline]] [[underline]] Award of Henry Medal [[/underline]] It has been suggested by the staff that Senator Hubert H. Humphrey, who, as Vice President of the United States (1965-1968), served as a member of the Board of Regents be awarded the Henry Medal of the Smithsonian Institution. This suggestion has been made in connection with our forthcoming Symposium on "Kin and Communities: The Peopling of America," to which Senator Humphrey has been invited as a participant. As we all know, Senator Humphrey was an active Regent and took great interest in Smithsonian affairs. In his career as a public servant he has been exemplary in improving the quality of life for all peoples. It would appear, therefore, that the Henry Medal, which is reserved for presentation to individuals in recognition of their distinguished service, achievements or contributions to the prestige and growth of the Smithsonian Institution, would be appropriate. The Henry Medal has been awarded but eight times since originally presented in 1897, as follows: - David E. Finley, 1967 - Frank A. Taylor, 1968 - Charles G. Abbot, 1970 - Fred L. Whipple, 1973 - Edward K. Thompson, 1973 - John Nicholas Brown, 1975 - T. Dale Stewart and Martin H. Moynihan, 1976.

-127- The following motion was unanimously approved by the Board: VOTED that the Board of Regents unanimously approved the award of the Joseph Henry Medal to Hubert H. Humphrey, not only for his years of active service on the Board of Regents, his chairmanship of the Woodrow Wilson Center Board, and his continuing great interest in Smithsonian affairs, but also for his exemplary career in improving the quality of life for all peoples. [[underlined]] Trip to Panama [[/underlined]] Mr. Ripley reported that Mr. Watson had suggested that he and Mr. Austin might cooperate in arranging for the Regents to visit Panama sometime this autumn. With the approval of the Board of Regents we could arrange for a weekend visit very much like the one made by a number of the Regents a few years ago which was most successful. The Smithsonian enjoys a unique status there in conducting advanced studies and support of tropical biology, education and conservation. The diversity of life in the tropics offers the richest natural laboratory for these purposes. The Chancellor suggested that the Regents be polled as to their availability to make the visit at a time to be determined. The Secretary assured the Regents that there would be no political pressures involved.

-128- Mr. Ripley also mentioned tentative plans being made by the members of the National Board of the Associates to visit Peking, China, and that further information can be provided if requested. [[underline]] NEW BUSINESS [[/underline]] [[/underline]] Smithsonian "satellite" bureaus [[/underline]] The Chancellor referred to his concern about the connection which Smithsonian has with its "satellite" institutions, such as the National Gallery of Art and the Kennedy Center. In the minds of some, particularly in the Congress, Smithsonian is likely regarded as having some responsibility for operation of those institutions. Yet, Smithsonian has no authority with respect to them except that the Chief Justice and the Secretary of the Institution are [[underline]] ex officio [[/underline]] members of the National Gallery board of trustees, and the Secretary is an [[underline]] ex officio [[/underline]] member of the Kennedy Center board. The Chancellor referred to the fixing of salaries, for example, over which the Institution has no authority. In particular, the Chancellor would like to know what the specific relationships are with the National Gallery of Art and the Kennedy Center; to study them, and, based on a thorough review, receive recommendations that the ties either be strengthened or dissolved. Senator Jackson agreed that our statutory authority must be reviewed so that a definitive line of demarcation can be made.

-129- Mr. Ripley described the difference between the other bureaus of the Institution over which the Regents and the Secretary have complete administrative responsibility, such as the National Portrait Gallery, the National Air and Space Museum, and the Hirshhorn Museum. Inasmuch as Mr. Hughes will be studying the Smithsonian's basic authorities contained in its legislative charter which incorporates those questions referred to by the Chancellor, concerning the "satellite" institutions, the Board will await the results of that study. However, the Chancellor was authorized to appoint a subcommittee of three Regents to consider these relationships, should he consider it to be necessary in the future. [[underlined]] Next Meetings: [[/underlined]] Plans are currently being explored to have an Executive Committee meeting and a Regents meeting on or about September 27. The Regents are being asked concerning their availability. [[underlined]] Adjournment [[/underlined]] The meeting was adjourned at 12:15 p.m. Respectfully submitted: [[signed]] S. Dillon Ripley [[/signed]] S. Dillon Ripley, Secretary Smithsonian Institution

[[underline]] ADMINISTRATIVE CONFIDENTIAL [[/underline]] [No part of these minutes is to be divulged unless specifically authorized by the Secretary.] SMITHSONIAN INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS September 27, 1977 INDEX [[2 column table]] | Page Attendance | 1 Report of the Executive Committee | 2 Board of Regents Discussion of Hughes Report | 6 Smithsonian Science Information Exchange | 27 Management of Grant and Fellowship Programs in lieu of Using the Smithsonian Research Foundation | 29 General Accounting Office Banking Report | 35 Minutes of Meeting of May 13, 1977 | 45 Financial Report | 46 Bequest of Dr. Atherton Seidell | 68 Chase Manhattan Bank Money Collection | 71 Publishing General-Interest Books | 79 Funds for Research | 87 Status Report on Legislation | 88 Proposed Award of the Hodgkins Medal to Professor Professor Alexander Dalgarno | 91 Regents Search Committee for Citizen Regent | 94 Museum of African Art | 94 Folklife Festival | 95 Office of Telecommunications | 97 [[/2 column table]]

Smithsonian Institution Proceedings of the Meeting of the Board of Regents September 27, 1977 Index (Continued) [[2 column table]] | Page Litigation Report | 98 Congratulations to Judge Higginbotham | 101 Gift of the Coca Cola Company to the Smithsonian Institution | 101 Impact of Panama Canal Treaty on STRI Operations | 101 Requests for Opening Regents Meetings to Media | 102 Mall Parking | 103 Suggested Change on Masthead of the Magazine | 103 Contemplated Transfer of International Exchange Service Functions | 106 Proposed Acquisition of U.S. Currency Collection from the U.S. Treasury | 108 Bequest of Groucho Marx | 110 Smithsonian Tax Matter | 111 Oversight Hearings | 112 Pension Building (National Museum of the Buildings Arts) | 114 Next Meetings | 116 Adjournment | 116 [[/2 column table]]

SMITHSONIAN INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS September 27, 1977 [[underlined]] Attendance [[/underlined]] The meeting of the Board of Regents was held in the Regents Room of the Smithsonian Institution Building and was called to order at 4:00 p.m., on September 27, 1977, by Mr. Webb, acting for the Chancellor, who was delayed briefly. Present were: Chief Justice Warren E. Burger, Chancellor James E. Webb, Chairman, Executive Committee J. Paul Austin John Nicholas Brown Murray Gell-Mann Caryl P. Haskins Judge A. Leon Higginbotham Thomas J. Watson, Jr. Representative Lindy Boggs Representative Elford A. Cederberg S. Dillon Ripley, Secretary The Vice President, Walter F. Mondale, Senators Jackson, Goldwater and Pell, and Representative Mahon were unable to attend because of House and Senate proceedings at the Capitol. Mr. William A.M. Burden, who had attended the Executive Committee meeting, was unable to be present. Also present were Assistant Secretaries Blitzer, Challinor, Euell, Jameson and Perrot; Treasurer T. Ames Wheeler; General Counsel Peter G. Powers; Director of Support Activities Richard L. Ault; Director of Membership and Development James McK. Symington; Executive Assistant to the Secretary Dorothy Rosenberg; Special

-2- Assistant to the Secretary James M. Hobbins; and Coordinator of Public Information Lawrence E. Taylor. Also in attendance were a representative from the Vice President's office, Peter Kyros; Administrative Assistant to the Chief Justice, Mark Cannon; Legislative Counsel to Senator Jackson,Owen Malone; and Consultant to the Audit and Review Committee, Phillip S. Hughes. [[underlined]] Report of the Executive Committee [[/underlined]] The Chancellor recalled the appointment of the Audit and Review Committee following receipt of the General Accounting Office Report of March 31, 1977, under the chairmanship of Senator Jackson; the selection thereafter of Mr. Phillip S. Hughes as a consultant to review the fundamental relationships between the Institution and the Federal government; and the subsequent submission of Mr. Hughes's report on September 1, 1977. The Executive Committee and the Audit and Review Committee of the Board of Regents held a joint meeting on September 22, 1977, in the Office of the Secretary at 6:30 p. m. Present were: [[underlined]] Executive Committee, Board of Regents [[/underlined]] The Chief Justice, Chancellor Mr. James E. Webb, Chairman Dr. William A. M. Burden Mr. S. Dillon Ripley, Secretary [[underlined]] Audit and Review Committee [[/underlined]] Senator Henry M. Jackson, Chairman Mr. Elford A. Cederberg (Former) Senator J. William Fulbright Mr. Phillip S. Hughes

-3- [[underlined]] Other Staff [[/underlined]] Mr. Owen Malone, Assistant to Senator Jackson Mr. Mark Cannon, Assistant to the Chief Justice [[underlined]] SI Staff [[/underlined]] Mr. T. Ames Wheeler Mr. John F. Jameson Mr. Peter G. Powers Mrs. Dorothy Rosenberg The Audit and Review Committee presented a summary of its review of the Hughes Report and had invited Mr. Hughes to the joint meeting where the report was discussed in great detail. The following motion had been proposed by the Audit and Review Committee and concurred in by the Executive Committee of the Board of Regents: VOTED that the Audit and Review Committee and the Executive Committee of the Board of Regents receive the report of Phillip S. Hughes dated September 1, 1977, and express their views with respect to the conclusions and recommendations in the report as follows: [[3 column table]] [[underline]] Conclusions | Action | Comment [[/underline]] Relationship between the Institution and the Congress | Approve | The Secretary stated for himself and his staff that they are committed to maintaining excellent communication between the Institution and the Congress. Relationship between the Institution and its constituent elements. | Approve | While the Regents and the Secretary have the necessary authority to direct and manage the affairs of the great majority of the Institution's constituent elements, they have no such authority with respect to the National Gallery of Art, the Kennedy Center, and the Woodrow Wilson Center. [[/3 column table]]

-4- [[3 column table]] Status of real property under the control of the Institution | Approve | The table contained in the Report on page 19 describes all real property under the control of the Smithsonian and is listed in three categories with brief comment as to the authority of the Regents and the Secretary with respect to each category. [[/3 column table]] [[underline]] RECOMMENDATIONS [[/underline]] I. Improving Accountability of the Institution to the Congress [[3 column table]] 1. Specific Authorizations for new programs. | Approve | The Regents and the Secretary should adopt the policy of seeking specific authorizations for all significant new programs or projects involving the use of Federal funds. 2. Disclosure of trust fund use which may involve future Federal fund expenditure. | Approve | The Regents and the Secretary should adopt a policy of discussing with the appropriations committees any proposed used of trust funds which may involve the future expenditure of Federal funds. 3. Five-Year forward planning process. | Approve | The Regents and the Secretary should establish a five-year forward planning process for the Institution covering all of its activites. 4. Special review of certain awards. | Approve | With regard to various research awards programs, in addition to the changes proposed by GAO, the Institution should adopt the practice of a special review by the Regents or by their Executive Committee of any awards which the Secretary believed might be perceived by the Congress or the public as self-serving or inappropriate. [[/3 column table]] II. Internal Management Matters [[3 column table]] 1. Comprehensive program and activity list. | Approve | As an early step in the planning process, the Smithsonian Institution should develop and keep current a comprehensive [[underline]] list of activities [[/underline]] (programs, projects, etc.) which it carries on. Administrative and internal management functions should be listed and described separately. [[/3 column table]]

-5- [[3 column table]] 2. Policies for Use of trust funds. | Approve | The Institution should develop and set forth in concise written form [[underline]] general policies for the use of its trust funds. [[/underline]] [[/3 column table]] NOTE: A preliminary draft of a statement titled "Smithsonian Institution Policies and Procedures Governing the Use of Appropriated Funds; Contracts and Grants; and Trust Funds" attached to the Hughes Report as Appendix IV was recommended to remain as a draft example with the report by the Audit and Review Committee. The Executive Committee, however, differed in its view concerning the advisability of including such a preliminary statement which might possibly be viewed as a binding document when, in effect, the Regents had not yet had an opportunity to review it. [[3 column table]] 3. Under Secretary. | Approve | The Institution should fill the permanent position of Under Secretary. 4. Five-Year Audit Cycle and Copies of Audits to Audit and Review Committee. | Approve | The staff of the Auditor of the Smithsonian Institution should be augmented by such additional positions as will permit the Office of Audits to maintain a five-year audit cycle. Also, the Auditor should make available copies of his Office's audit reports to the Audit and Review Committee of the Board of Regents at the same time that he transmits them to the Secretary. III. Recommendations Contained in the GAO's Reports. | Approve | The GAO's recommendations appear generally sound, and the report indicates general concurrence in them. However, certain modifications in approach are discussed in the report. [[/3 column table]] It was then VOTED further that the aforesaid conclusions and recommendations of the Audit and Review Committee, concurred in by the Executive Committee, be transmitted to the Board of Regents.

-6- And it was VOTED further that the Executive Committee, functioning as a Search Committee, work in close consultation with the Secretary to carry out Recommendation II, 3, regarding the position of Under Secretary. The Executive Committee and the Audit and Review Committee recognized the efforts being made by the staff of the Smithsonian to carry out the recommendations contained in the GAO report of March 31, 1977, particularly with reference to the Smithsonian Science Information Exchange, and the Management of Grant and Fellowship Programs in Lieu of Using the Smithsonian Research Foundation. The General Accounting Office report discussing the Smithsonian Institution's private funds banking practices, dated September 20, 1977, was accepted by the Executive Committee and the Audit and Review Committee, and its approval is recommended to the Board of Regents. The Executive Committee then continued consideration of the items on the agenda, and their recommendations, together with any revisions resulting from their discussions, are contained in the following papers. [[underlined]] Board of Regents Discussion of Hughes Report [[/underlined]] Mr. Webb stated that the report which Mr. Hughes prepared after very careful consideration includes three conclusions which are quite basic to the operation of the Smithsonian; and there are a number of recommendations that are spelled out in considerable detail. It was suggested that Mr. Hughes state the three conclusions and run down the list of recommendations so that the Regents might have a framework against which to consider any suggestions that are

-7- made for changes. Mr. Webb stated for the Executive Committee that they want the Regents to understand what they are doing, ask questions and suggest changes. He mentioned that there are two alternatives to decide upon: To make changes in their discretion or to authorize Senator Jackson to release his report as approved by his Audit and Review Committee to the appropriate Members of Congress who are interested in getting this report as soon as possible. If the Regents do approve the report as written, then it will be released promptly. But, Mr. Webb said, he did not wish to foreclose discussion by presuming that the Regents will approve all of the recommendations. The Chancellor added that at the joint meeting certain language changes were worked out. The Secretary and the members of the Committees were in general accord with the report. There were small problems of emphasis but not in substance, and there was no change in the main thrust. Mr. Hughes was asked to give his conclusions and recommendations. He stated that with respect to the three conclusions, the most basic one was the [[underlined]] relationship between the Smithsonian Institution and the Congress [[/underlined]]. In part based on discussions with Members of Congress, the Regents, and members of the staff of the Smithsonian, and in part from looking at the language of the Smithson Will and some of the substantive statutes, [[underlined]] he has characterized the Institution as a "Federal establishment." [[/underlined]] He believes that in political science and public administration terms that is a correct characterization. It seems to him that the confusion with respect to the nature of the

-8- Smithsonian arises because the Institution has at its disposal a variety of kinds of funds. Some of these are appropriated and obviously subject to all the normal constraints of Federal appropriated funds. In budgeting for them, the Institution acts like a Federal institution. On the other hand, and very significantly, the Institution has also at its disposal trust funds. This term encompasses the original trust fund and receipts to the Institution from a variety of sources, including importantly the Magazine. Trust funds are a growing resource of the Institution and constitute the essence of the difference between the Smithsonian and other Federal establishments or agencies. There are other distinctions, he said, but this is a very important one and is at the core of the uniqueness of the Institution. The institution receives also restricted trust funds from private sources and grants and contracts, largely from Government agencies, for stipulated purposes. Further, the Institution receives funds generated by the Institution's business activities. The 1846 Act has been clearly interpreted over the years to authorize the addition of such funds to the corpus of the unrestricted trust funds. The recognition of these facts should clarify the relationships between the Institution and the Congress without adversely affecting the interests of either. From the standpoint of the Congress, its general oversight rights with respect to both Federal funds and all categories of non-Federal funds would be preserved. From the standpoint of the Smithsonian, its unique characteristics would be preserved, including

-9- management by the Regents and the Secretary, and the program flexibility derived from having non-Federal funds at their disposal. Both the Will and the 1846 Act give to the Board of Regents and the Secretary the use of such funds so long as they are consistent with the reasonably broad purposes of the Smithson Will. The second conclusion is the [[underlined]] relationship between the Institution and certain of its constituent elements, [[/underlined]] namely the National Gallery of Art, the Kennedy Center, and the Woodrow Wilson Center. It seems to him that the statutes are quite explicit that even though they label these entities as bureaus of the Smithsonian, they are in fact administratively independent entities. The presence of the Chancellor or the Secretary or both on the several Boards of Trustees provides a coordinating mechanism but in no sense a control mechanism. The statutory characterization of them as bureaus of the Institution conceivably may carry with it some receivership responsibilities, but whether that is the case, it is quite clear that the Smithsonian Board of Regents and the Secretary would have no authority to do anything to prevent or encourage that receivership. They are administered by separate boards and are independent of the Smithsonian Board of Regents. The question arose as to whether this should be clarified by legislation. Mr. Hughes found no sentiment for legislation. Rather, he considers it is a matter that can be dealt with in comments by the Regents whenever appropriate and in the publications of both this Institution and those of the other institutions, to make it clear that the Smithsonian is not responsible for them.

-10- The third conclusion concerns the [[underlined]] Status of real property under the control of the Institution [[/underlined]] and the authority of the Secretary or the Regents to dispose of it. The following tabulation titled [[underlined]] Real Property Under the Control of the Smithsonian Institution [[/underlined]] summarizes the Institution's position as recorded in Mr. Hughes's report. The Secretary mentioned an explanatory note to the brief comments concerning the [[underlined]] Federal Trust Properties [[/underlined]] (appearing on the following page) that the Institution does not have the right to mortgage the federal trust properties or to dispose of them without the consent of Congress, if no longer needed for trust purposes, in spite of the fact that the sources of funds used in the construction of these buildings differ.

-11- REAL PROPERTY UNDER THE CONTROL OF THE SMITHSONIAN INSTITUTION All real property under the control of the Smithsonian is listed below in three categories with brief comment as to the authority of the Regents and the Secretary with respect to each category. [[underlined]] FEDERAL TRUST PROPERTIES [[/underlined]] Smithsonian Institution Building Arts and Industries Building Natural History Building Freer Gallery of Art History and Technology Building Hirshhorn Museum National Air and Space Museum National Zoological Park National Portrait Gallery National Collection of Fine Arts These properties are "appropriated to the Institution" by the terms of the 1846 Act and subsequent legislation (see 20 U.S.C., §52). It appears that such "appropriation" was intended to give the Institution the right to use such federal property for trust purposes, but not the right to mortgage the property, or to dispose of it without the consent of Congress, if no longer needed for trust purposes. [[underlined]] CUSTODY IN THE SMITHSONIAN [[/underlined]] NZP Animal Conservation Center Renwick Gallery Properties at Silver Hill, Maryland Barro Colorado Island The first three properties have been transferred to the custody of the Smithsonian by the General Services Administration for the Institution's use, and at whatever time the Smithsonian ceases using these properties they would be returned to GSA. Barro Colorado Island was transferred to the Smithsonian by the 1946 Reorganization Plan No. 3 (see 20 U.S.C., §79, et seq.), and is subject to United States treaty provisions. [[underlined]] NON-FEDERAL TRUST PROPERTY [[/underlined]] Barney House Belmont Conference Center Chesapeake Bay Center for Environmental Studies Cooper-Hewitt Museum These properties have been purchased with trust funds or received by, or through private donations. To date no facilities have been constructed with appropriated funds on any of these trust fund properties, except for some repairs and minor renovations Control and disposition of such properties is within the general discretion of the Board of Regents under the 1846 Act (see 20 U.S.C., §§41, 42, and 55). Should appropriated funds be requested for any such construction in the future, consideration will be given at that time to the appropriate protection of the federal interest. ___________ The above categories exclude property under lease or use permit arrangements.

-12- Mr. Hughes stated he felt confident that the classifications that are set forth and the conclusions with respect to each are valid and would be reassuring to those in the Congress who have these concerns. Those then are the three conclusions, and the recommendations flow from those conclusions. Mr. Hughes recommended that the [[underlined]] Regents and the Secretary adopt the policy of seeking specific authorizations for all significant new programs or projects involving the use of Federal funds. [[/underlined]] The Chancellor asked if the proposal which has been considered by an [[underlined]] ad hoc [[/underlined]] committee of the Regents to acquire the Museum of African Art would fall within that recommended policy. Mr. Hughes urged that if this were the will of the Regents, discussions be undertaken with the appropriate committees of the Congress to determine their feeling in the matter, and if they thought an authorization necessary, it might go through easily and well. The Secretary announced here that on October 3 and 4, 1977, the Smithsonian has been asked to appear before its authorizing committee under the chairmanship of Representative Lucien Nedzi and the chairman of the Subcommittee on Government Activities and Transportation, Representative John Burton, to testify in oversight hearings on the Smithsonian. It was suggested that we might bring up the matter of the African Museum, advising the Congress of

- 13 - our negotiations to date. Mrs. Boggs thought this to be a good idea. Mr. Hughes pointed out that seeking authorization is one means of communication which is very important. Mr. Hughes continued that one might argue as to whether the 1846 Act is sufficiently broad to cover certain activities or to seek authority in an appropriation bill, but cautioned that this may be subject to a parliamentary "point of order." Also, as the staff and the chairmen of committees change, he commented that Congress's memory fails. As Mr. Ripley can certify, understanding with one chairman is not necessarily an understanding with the second. Recommendation No. 2 was that [[underline]] "The Regents and the Secretary should adopt a policy of discussing with the appropriations committees any proposed use of trust funds which may involve the future expenditure of Federal funds." [[/underline]] Recommendation No. 3 related to [[underline]] "The Regents and the Secretary should establish a five-year forward planning process for the Institution covering all of its activities. [[/underline]] Mr. Hughes stated that in an institution which is as diverse as the Smithsonian, a planning process is a very useful device, not to establish a rigid framework but to inform the Regents and others concerned of its priorities. For perfectly valid [[underline]] ad hoc [[/underline]] reasons they could depart from the plan, but it establishes base lines in priority areas and a framework from which the Institution can evaluate its program.

-14- Recommendation No. 4: [[underlined]]"With regard to various research awards programs, in addition to the changes proposed by GAO, the Institution should adopt the practice of a special review by the Regents or by their Executive Committee of any awards which the Secretary believes might be perceived by the Congress of the public as self-serving or inappropriate." [[/underlined]] Mr. Hughes recommended that in addition to the changes proposed by the General Accounting Office the Institution should undertake a special review by the Regents in any situation where the Secretary believed that a particular award might be perceived as self-serving. Under Internal Management matters, Mr. Hughes proposed: Recommendation No. 1: [[underlined]]"As an early step in the planning process, the Smithsonian Institution should develop and keep current a comprehensive list of activities (programs, projects, etc.) which it carries on. Administrative and internal management functions should be listed and described separately. [[/underlined]] He said this may sound like a simple matter, but it is not a simple task in this Institution and should be done to provide a basis upon which the Congress, the Regents and the Secretary can understand clearly the Institution's programs. Recommendation No. 2: [[underlined]]"The Institution should develop and set forth in concise written form general policies for the use of its trust funds. [[/underlined]] Mr. Hughes stated there should be developed and presented to the Congress general policies for the use of trust funds.

-15- The question has arise in the Congress. A framework of policies for the use of trust funds would assure the Congress and the appropriations committees that there is tight management of the trust funds, consideration of priorities, and choice among opportunities. Recommendation No. 3: [[underlined]]"The Institution should fill the permanent position of Under Secretary."[[/underlined]] Mr. Hughes stated that the Institution at the present time is producing good and well-received results. On the other hand, it is a most complicated and diverse management task. Also, it seems to Mr. Hughes that further difficulty lies in the fact that, unlike most institutions, public or private, it has no central function or program which tends to glue it together. The individual should be selected for his or her managerial training, experience, and skills, rather than for scientific or cultural achievements. He should be as carefully selected as the Secretary and would relieve the Secretary of most day-to-day operating responsibilities. The Chancellor explained that Mr. Hughes had agreed to a language change in the report referring to a "new position of Deputy or Under Secretary." Based on the fact that in the recent past there have been two Under Secretaries, one retired and the other deceased, the report will refer to "the permanent position of Under Secretary" should be filled. The Hughes report was revised accordingly. Recommendation No. 4: [[underlined]]"The staff of the Auditor of the Smithsonian Institution should be augmented by such additional positions as will permit the Office of Audits to maintain a five-year cycle. Also, the Auditor should make available copies of his [[/underlined]]

-16- [[underlined]]Office's audit reports to the Audit and Review Committee of the Board of Regents at the same time that he transmits them to the Secretary."[[/underlined]] Mr. Hughes believes that the above recommendation would be useful, both for substantive and for public purposes. Regarding the recommendations contained in the General Accounting Office Report, Mr. Hughes concurred in the dissolution of the Smithsonian Research Foundation, but with regard to the Smithsonian Science Information Exchange he believed that other organizational locations for it should be explored. Mr. Brown stated that it seemed to him from reading the Hughes Report that the tabulation relating to real property will result in a further influence of the Congress upon the Institution. He is concerned that some time in the future the Congress might decide that it should have control over funds it did not generate. He thinks the Congress should be given the right not to be surprised, particularly when it comes to trust funds creating a facility which then will require tax funds to continue its support. But there are many other areas where that particular relationship to the Congress does not exist. He wondered if Mr. Hughes thought that the safeguards are sufficient. Mr. Hughes thinks that concern is a legitimate one and he shares this concern. He also shares his conclusion that it is not an easy problem to address in the abstract. Mr. Hughes reached the conclusion that is reflected in his recommendation that the

-17- Congress inevitably is concerned with what the Institution is doing with its trust funds. The Institution should say it is going to do certain things and give Congress the assurance that it will tell them what it is proposing to do. The Institution could say that the funds are in good hands, wisely managed and carefully expended, and remind the Congress from time to time that the trust funds are to be used by the Regents in their discretion so long as they are in concert with the Smithson trust. The Chancellor stated that the Institution has had three Senators and three Congressmen and [[underlined]]de facto[[/underlined]] they acted as an oversight committee, keeping in touch with what was going on and presumably informing their colleagues. When total membership of the Congress was small, it presumably was a manageable Institution and the Smithsonian was doing only a fraction of what it is doing now. With its enormous growth the Smithsonian, as well as the Congress with the enormous present load it carries, cannot oversee it in the same way. There will be a pattern of communication, and we will no longer rely on the historical practice that the six Congressional members will keep the rest of the members posted on what we are doing. With regard to the General Accounting Office's recommendations dealing with the accountability of the Institution, Mr. Hughes concurred in its recommendation regarding consultation by the Smithsonian and the appropriations committees on reprogramming.

-18- He also concurred in the GAO recommendation that those committees be provided information on the planned use of trust funds. (The Secretary and his staff have been working with the committees on these matters.) Mr. Hughes noted that he had recommended that the Institution present budget plans on a gross rather than a net basis in order to portray the full scope of its activities. He also concurred in the GAO recommendation that the Regents establish, in conjunction with the appropriate congressional committees, clear policies governing the use of Federal and trust funds. Mr. Ripley reported that the Smithsonian has been having continuing discussions on the various issues pointed out in the General Accounting Office Report and the Hughes Report, and referred to status reports which follow concerning 1) a copy of his letter to Senator Jackson on the Hughes Report; 2) a status report on the Smithsonian Science Information Exchange, and 3) Procedures Being Developed for the Management of Grant and Fellowship Programs in lieu of Using the Smithsonian Research Foundation. It should be noted that a preliminary draft of the "Smithsonian Institution Policies and Procedures Governing the Use of Appropriated Funds; Contracts and Grants; and Trust Funds" is included in the Hughes Report as Appendix IV. The Chancellor summarized the consensus of the Board of Regents as finding the Hughes Report instructive and strengthening the Institution's relationships with the Congress.

-19- Mr. Webb stated on behalf of the Executive Committee that they wanted to thank Mr. Hughes for his report, and recommended approval of the following motion, which was so ordered: VOTED that the Board of Regents accepts the Report of the Audit and Review Committee and its recommendations as contained in the Report prepared by Mr. Phillip S. Hughes. The Board wishes to express its appreciation and commend Senator Jackson and his Committee, their staff assistants and Mr. Hughes for their expert handling of the assignment. They wish also to commend the Secretary and his staff for their cooperation and assistance so readily extended in providing fully and promptly all information requested. The Chancellor, in anticipation of favorable action by the Board of Regents, referred to a letter he had proposed to be sent to Senator Jackson concerning approval of the Report and its release. The letter was concurred in by the Board of Regents and is to be transmitted to Senator Jackson promptly. It is expected that the interested committees and members of Congress will receive copies of the report by tomorrow morning, permitting public release of the report thereafter.

-20- [[preprinted]] [[image - drawing of the Smithsonian Institution]] SMITHSONIAN INSTITUTION Washington, D.C. 20560 U.S.A. [[/preprinted]] September 27, 1977 My dear Senator Jackson: After careful consideration of the Report prepared by Mr. Phillip S. Hughes, Special Consultant to the Audit and Review Committee which you chair, your committee adopted the Report unanimously. The Executive Committee, after review of the Report, also recommended approval. The Regents this afternoon adopted your Committee Report. The Board of Regents, having approved the report, recommends that it be released for distribution. On behalf of the Board of Regents, I authorize and request that you convey to those Members of Congress who have an interest in this matter the fact of our wholehearted endorsement of the Audit Review Report by the Board of Regents. I believe I express the views of the Regents that this inquiry has been of significant value to the Smithsonian Institution. As you know, historically the presence of three Senators and three House members on the Board was thought to be a means of continuing oversight. Over more than a century of its existence, the programs of the Institution have enormously expanded, and at the same time the vast burden that today rests on Members of Congress makes communication less effective. The General Accounting Office Report and now the Report of the Audit and Review Committee have recommended that both the Regents and the staff of the Institution reexamine practices and policies in light of present day conditions, especially the desirability that Committees of Congress, other than the six Congressional Regents, be kept alerted and informed on programs, policies and projects of the Institution. It will be of great value to the public

-21- interest to have this renewed interest of the Congress in Smithsonian,and you can assure your colleagues of the Institution's eagerness to have the continuing interest of the Congress in these matters. Your very expeditious and skillful handling of the matter as Chairman of the Audit and Review Committee and the assistance of the members of your committee are deeply appreciated. I look forward to your continuing interest and chairmanship of the Audit and Review Committee. With kind regards and many thanks, I am, Cordially, [[signed]]Warren E. Burger[[/signed]] Chancellor The Honorable Henry M. Jackson Chairman Audit and Review Committee Board of Regents of the Smithsonian Institution United States Senate Washington, D.C. 20510 (Note: The full report of Mr. Hughes, together with the appendices, are attached to these proceedings.)

-22- [[preprinted]] [[image - drawing of the Smithsonian Institution]] SMITHSONIAN INSTITUTION Washington, D.C. 20560 U.S.A. [[/preprinted]] September 16, 1977 Honorable Henry M. Jackson Chairman Audit and Review Committee Board of Regents of the Smithsonian Institution United States Senate Washington, D. C. 20510 Dear Senator Jackson: This letter responds to your request of September 9, 1977, for our review and comment on the report of Mr. Hughes dated September 1, 1977, concerning the Smithsonian's relationship to the Federal Government. I believe that the report presents constructive recommendations for strengthening this relationship, and my staff and I are committed to maintaining excellent communication between the Institution and the Congress. As the report indicates, several of the recommendations stemming from the Comptroller General's report of March 31, 1977, such as those relating to the Smithsonian Research Foundation and the Smithsonian Science Information Exchange, are progressing satisfactorily toward implementation. The recommendation in the report concerning the development and issuance of general policies for use of its trust funds has had considerable attention and is currently being revised for resubmission to your Committee and the Regents. It is believed that clarification of the various research awards programs, specifically the one designed to augment programs for Smithsonian researchers, would dispel any misunderstanding of the purposes of these programs.

-23- The various management tools recommended in the report such as establishing a five-year forward planning process, and the comprehensive listing of institutional activities as well as administrative and internal management functions are already receiving attention. In view of the discussion concerning a deputy secretary and the day-to-day operation and internal management of the Institution, I have enclosed, for convenient reference as an Appendix to this letter, a statement on the responsibilities of the Secretary. I look forward to discussing this subject, as well as the report, in more detail with you and the members of your Committee at the joint meeting with the Executive Committee of the Board of Regents on the 22nd of September. I would like to express our appreciation to Mr. Hughes and the Committee for their interest, and to assure you of my dedication to maintaining the high ideals and purposes of this Institution. Sincerely yours, [[signed]]Dillon[[/signed]] S. Dillon Ripley Secretary Attachment: Appendix

-24- APPENDIX [[underlined]]Responsibilities of the Secretary[[/underlined]] The responsibilities of the Secretary are derived from 20 U.S.C. and related statutes, as follows: -- The business of the Institution shall be conducted by a Board of Regents, composed of the Vice President, the Chief Justice of the United States, three Members of the Senate, three Members of the House of Representatives, and nine other persons. -- The Board shall elect a suitable person as Secretary of the Institution and also as Secretary of the Board of Regents. -- The Secretary shall take charge of the buildings and property of the Institution and shall, under direction of the Regents, make a record of their proceedings; shall discharge the duties of librarian and of keeper of the museums; and may, with the consent of the Board of Regents, employ assistants. -- The Chancellor of the Institution may designate a suitable person to act as Secretary when there is a vacancy in said office and whenever the Secretary shall be unable from illness, absence, or other cause to perform all the duties of his office. In such cases, the person so appointed

-25- may perform all the duties imposed on the Secretary until the vacancy shall be filled and such inability shall cease. -- The Secretary and his assistants shall be removable by the Board of Regents whenever the interests of the Institution so require. In addition to the foregoing authorizations, further principal authorizations are as follows. The Secretary is responsible to the Board of Regents for: -- executive direction of all programs of the Institution; -- planning, execution, and reviewing the programs and projects; -- approval of budgetary and other financial operations; -- justification of budgetary proposals; -- preparation and justification of legislative proposals; -- testimony before the Office of Management and Budget, the Congressional Committees, planning commissions, the Comptroller General, the Civil Service Commission, and other official bodies; -- preparing and approving correspondence; -- public speaking; -- and other fields of Institutional action.

-26- Direct communication by an employee to the Secretary is provided, including particularly communications by Assistant Secretaries, the Treasurer, the General Counsel, the Executive Assistant, and Directors of Museums, Bureaus and Offices. Final decisions on recommendations to the Board of Regents in respect to senior level appointments at and above the level of GS-15 (Assistant Secretaries, Treasurer, General Counsel, Executive Assistant to the Secretary, Bureau and Museum Directors, [[underlined]] et al [[/underlined]]) are reserved for action by the Secretary.

-27- [[underlined]] Smithsonian Science Information Exchange [[/underlined]] The General Accounting Office Report GGD-77-43 on the Smithsonian Institution, "Need to Strengthen Financial Accountability to the Congress", recommended that the Board of Regents dissolve the corporate status of the Smithsonian Science Information Exchange (SSIE) and conduct its operations as part of the Smithsonian Institution's regular organizational structure. Subsequently, in its action on the fiscal year 1978 appropriation, the Senate Appropriation Committee in its Report 95-276 stated that efforts should begin to effect the transition of the Exchange to Federal status either in the Smithsonian or another appropriate Federal agency. In a statement dated April 18, 1977, provided to the Congress, the Smithsonian took note of the long standing interests of the legislative and executive branches in the operations of the SSIE and raised the question whether the Board of Regents could unilaterally dismantle the present operation of the Exchange without prior consideration by the appropriate committees of Congress, by the public and private user agencies, and by activities charged with advising the President on the management of scientific and technological information. Consequently, in a letter of July 21, 1977, to the Smithsonian the Office of Management and Budget advised that it expected to consider the GAO recommendation in the course of reviewing the Smithsonian's budget this fall and asked the Institution to comment on the possibility of merging all or a part of the SSIE with the

-28- National Technical Information Service (NTIS) in the Department of Commerce and to suggest other possible organizational configurations. OMB further advised that the Department of Commerce, National Science Foundation, and the Office of Science and Technology Policy (OSTP) were also asked to comment on such a merger. On September 8, a meeting was held at OMB with representatives of the Smithsonian, SSIE, NSF, and Commerce to discuss the advantages and disadvantages of the suggested merger and to range over other possibilities, such as retaining the Exchange under the Smithsonian or placing it under the NSF or OSTP. It seems almost certain that OMB will arrive at a recommended course of action over the next several weeks as part of its decisions on the FY 1979 budget. The Regents will be advised of this recommendation as soon as the Secretary learns of it. In general, it is felt that a transfer of the Exchange, if recommended, should be agreed to, provided there are appropriate safeguards for the continued conduct of its operations which are felt to be of substantial importance to research management.

-29- [[underlined]] Management of Grant and Fellowship Programs in lieu of Using the Smithsonian Research Foundation [[/underlined]] The General Accounting Office Report GGD-77-43 "Need to Strengthen Financial Accountability to the Congress" recommended that the Board of Regents dissolve the Smithsonian Research Foundation (SRF) and carry out its operations as part of the Smithsonian's regular organizational structure. The report further recommended that the Secretary "propose and justify to the Congress the exemptions from existing legislation the Smithsonian believes it needs to run effectively, and with a minimum of red tape, the programs now funded through the Smithsonian Research Foundation". Subsequently, in its Report 95-276 on the fiscal year 1978 appropriation, the Senate Committee on Appropriations stated that "it is the expressed intent of the Committee that the Foundation be terminated and that the Smithsonian establish procedures for direct administration of Federal grant programs". Programs currently administered by the SRF, for which new direct procedures are being developed, include the Research Awards Program, the Special Foreign Currency Program research grants to Smithsonian scholars, the Smithsonian's Academic Studies Program of pre- and post-doctoral fellowships to college and university applicants, and the Woodrow Wilson Center fellowships. Public Law 94-74, approved July 26, 1977 (the fiscal year 1978) states that none of the Salaries and Expenses and Special Foreign Currency Program appropriations shall be made available to the SRF.

-30- In developing new procedures, we have based our planning on the following considerations. First, that there will be no change to the Congressional advice we have received that, while no new FY 1978 funds may be obligated to the SRF, funds currently obligated which will remain unspent as of October 1, 1977, may be drawn down in fiscal 1978 in order that ongoing research projects and fellowships will not be jeopardized. We have also assumed that the SRF as an entity will be permitted to stay in existence until the end of FY 1978 in order to allow projects to wind down. For its own budget reasons, however, it is unlikely that SRF will remain staffed beyond December 31, 1977. For fiscal year 1978, the following general procedures will be in effect. [[underlined]]Smithsonian and Woodrow Wilson Center Fellowship Programs [[/underlined]] Following the usual process of fellowship application, review, evaluation, and selection, letters of award will be issued by the Smithsonian and WWICS directly to the successful candidates under the Institution's general authority to engage in educational activity and the Center's specific authority to operate a fellowship program. Such letters will constitute obligating documents of federal funds. The respective administering offices, Office of Academic Studies and the Center, will prepare fellowship analysis worksheets for use by the Accounting Division for scheduling payments, tax withholding, medical insurance withholding, and the like. These offices will also develop and maintain systems to monitor Fellows'

-31- progress under the fellowships and adherence to agreed-upon terms; receive interim and final reports as established by each program; maintain control of records relating to Fellow's tenure and Institutional commitments to him or her; prepare modifications of award for appropriate signature for changes in length and/or dates of tenure, amounts of stipend and other funds awarded, and for leaves of absence for legitimate reasons; notify Accounting of changes in award; and provide other administrative support. The Accounting Division will certify obligation of funds in each fellowship award; schedule and make stipend and other payments; withhold income tax as required by Internal Revenue Service; prepare 1099's and similar income tax forms; withhold medical insurance premiums as determined in each individual grant and transmit those amounts in the Fellow's behalf for payment to the insurance carrier; maintain accounting records for audit and submit records periodically to the Office of Academic Studies and WWICS. [[underlined]] Smithsonian Research Awards Program [[/underlined]] Following the procedures established and apparently working well for the Environmental Sciences Program, funds for ongoing projects (the FY 1978 appropriation only provides funds for ongoing work) will be provided as direct annual allotments to the Smithsonian bureau for the principal investigator. Each such allotment will be a cost control center with its own accounting number. Should the program be restored to a fuller funding level in FY 1979, the regular competition and selection process will be followed.

-32- Approved budgets will be transmitted by the Office of the Assistant Secretary for Science, the program's administrative center, to the Accounting Division for appropriate controls to be established. The principal investigator will prepare personnel, travel, and procurement requests which will be sent directly to the appropriate administrative support units for processing except that personnel and travel requests must be approved by the Office of the Assistant Secretary for Science. Most of the personnel presently attached to ongoing projects will continue to be paid in fiscal year 1978 from funds currently obligated to the SRF. Should such funds prove not to be adequate, some personnel now on board may have to be hired on a temporary Federal appointment sometime after the beginning of the fiscal year. Any new hires also will be temporary appointments not to exceed September 30, 1978. All such hires will be in accordance with Civil Service procedures. The Accounting Division will prepare financial status reports on each project and send the reports to the principal investigator and the Office of the Assistant Secretary for Science. These reports will be reviewed jointly throughout the year with particular attention to the last quarter when it may be necessary to make project-by-project adjustments to avoid end-of-year deficits or over-expenditures. [[underlined]] Special Foreign Currency Program Awards to Smithsonian Staff [[/underlined]] As is the Research Awards Program, the fiscal year 1978 Special Foreign Currency appropriation is limited in its amount and application

-33- to Smithsonian projects that are presently ongoing. Since the appropriation is no-year, these funds will remain available for obligation, if necessary, after the close of the fiscal year. Special accounting records will be established to assure that the limitations imposed by the Congress are not exceeded. Funds for approved projects will be allocated to the Smithsonian bureau or office for which the principal investigator is employed. For projects requiring hiring and purchasing abroad, the following procedures will be placed into effect: - For projects with a collaborating host country research institution, project agreements will be executed transferring funds for local costs to the host institution. The travel and maintenance of the Smithsonian investigator and other nonhost country participants will be obligated on travel orders. - For projects without an institutional research collaborator, service contracts will be executed with an established organization in the host country which will, for a fixed administrative fee, carry out local hiring and purchasing necessary for the operation of the project under the supervision of the Smithsonian principal investigator. The travel and maintenance of the Smithsonian investigator and nonhost country participants and equipment shipments would be handled on travel orders and Government Bills of Lading. Financial data will be reported to the Accounting Division for the preparation of consolidated reports to the Smithsonian bureau or office and to the Foreign Currency Program office.

-34- Instructions are now being drafted for each of these programs for the guidance of Smithsonian bureaus and offices and others. Following a period of using these procedures, an evaluation will be made to determine if they are operating satisfactorily or if exemptions from legislation are needed to make these programs run effectively. A status report will be given to the Regents at the May 1978 meeting.

-35- [[underlined]] General Accounting Office Banking Report [[/underlined]] Mr. Ripley pointed out that the General Accounting Office had released its report discussing the Smithsonian Institution's private funds banking practices which the Senate Subcommittee on Appropriations had asked the General Accounting Office to look into. The report stated: "In our view the Smithsonian has established adequate procedures to keep non-interest-bearing checking account balances at minimum levels sufficient to serve its needs." It was observed that this report should officially lay to rest all the unfounded charges that were made about the way the Smithsonian was handling its funds. The report follows.

-36- [[preprinted]] [[image - seal of the Comptroller General of the United States]] COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, D.C. 20548 [[/preprinted]] B-133332 September 20, 1977 To the Chairman and Ranking Minority Member Subcommittee on Interior Committee on Appropriations United States Senate This report discusses the Smithsonian Institution's private funds banking practices, which your Subcommittee asked us to look into, and which were not discussed in our March 31, 1977 report (GGD-77-43) on the Smithsonian. As of April 30, 1977, the Smithsonian maintained 41 accounts in financial institutions and the United States Treasury. Most of these are small checking accounts used to pay local expenses at Smithsonian locations outside Washington, D.C. Our review was limited to analysis of the use of five principal accounts--two at the American Security and Trust Company, two at the Riggs National Bank, and a deposit suspense account in the United States Treasury. In our view the Smithsonian has established adequate procedures to keep non-interest-bearing checking account balances at minimum levels sufficient to serve its needs. [[underlined]] FUNDS MANAGEMENT [[/underlined]] The Smithsonian Treasurer has overall responsibility for the Smithsonian's financial assets. The investments accounting division in the Office of the Treasurer is responsible for cash management and cash needs forecasting. One employee in the accounting division of the Office of the Treasurer is engaged full-time in monitoring and analyzing the bank accounts and in providing the investments accounting division with information needed in its cash management responsibilities. GGD-77-67

-37- B-133332 The investments accounting division attempts through various methods to invest, on a short-term basis, any operating funds which are temporarily available. In the past 2 years several different methods have been used. Currently, any excess operating funds are deposited in a savings account at American Security and Trust or invested in a short-term investment pool. When the division's forecasts show that a large amount of cash beyond foreseeable current needs will be accumulated, the Smithsonian Treasurer obtains authorization from the Board of Regents to transfer the excess cash to one of four investment trust accounts maintained at Riggs. These funds are available for longer term investment by three professional investment firms. [[underlined]] U.S. TREASURY SUSPENSE ACCOUNT [/underlined]] The Smithsonian has had a deposit suspense account at the U.S. Treasury for its private funds since 1874. Deposits into the Treasury account consist of grants, gifts, receipts from auxiliary activities such as magazine and museum shop sales, and the various other sources of Smithsonian private funds. Some of these receipts, such as grants and museum shop sales, are now first deposited in a Riggs collection account and then transferred daily to the Treasury account. At one time the Treasury account served as the Smithsonian's principal checking account from which payroll and other payments were made. However, that function is now handled primarily through a Riggs payroll account and the American Security and Trust operating account. Withdrawals are made from the Treasury account for transfers to the American Security and Trust operating account, Riggs payroll account, and the other checking accounts. When excess funds accumulate in the Treasury account, they are transferred to an American Security and Trust savings account. We were advised by the Smithsonian that the Treasury account is also used, in a limited way, for payroll purposes and for payment of some accounts payable. The account is charged for salary payments to private employees who want checks sent to a bank, thus enabling Treasury to merge into one document both Federal and private salary payments of Smithsonian employees who designate the same bank. Occasionally checks are also drawn on the account to pay vendors who submit bills for work chargeable in part to the Smithsonian's private funds and in part to its appropriated funds. - 2 -

-38- B-133332 The vendors get one check to cover the appropriated fund and private fund charges. Using the deposit suspense account for these two purposes, according to Smithsonian officials, facilitates the accounting work for the Smithsonian, assures prompt and safe receipt of paychecks for those Smithsonian employees designating banks, and eliminates confusion for vendors who would otherwise receive two checks for partial payments of each bill. In calendar year 1976 the Treasury account had an average daily balance of $442,000, according to the Smithsonian's books. The Smithsonian later decided to keep the balance at about $250,000 by transferring the excess to the savings account. A Smithsonian official recently told us that they would reassess the use of the account and the average balance may be further reduced. [[underline]] ACCOUNTS AT AMERICAN SECURITY AND TRUST [[/underline]] In March 1966, the Smithsonian opened an account at the American Security and Trust Company for the purpose of depositing receipts from museum shop sales. Later, payments under Federal grants and contracts were deposited in the account. Originally the only checks written on this account were for monthly or bimonthly withdrawals for deposit in the Smithsonian's Treasury suspense account. In July 1968, the Smithsonian began drawing checks on the American Security and Trust account to pay some operating expenses and began making deposits to it, when necessary, from the Treasury suspense account. The account became the Smithsonian's primary operating account--taking over that role from the Treasury suspense account. The change was made because the Smithsonian Treasurer believed that the private bank provided more timely service and information on the operating transactions flowing through the account. In April 1977, the Smithsonian discontinued using the American Security and Trust operating account as the initial depository for museum shop sales receipts and payments under Federal grants and contracts. All such receipts now go to the Riggs collection account. Thus, the only deposits to the American Security and Trust account are transfers from the Treasury suspense account to cover checks issued in payment of operating expenses. - 3 -

-39- B-133332 [[underlined]] Investment of excess cash [[/underlined]] In June 1975 the Smithsonian entered into a repurchase agreement with American Security and Trust whereby the Smithsonian would withdraw daily from the operating account excess funds which American Security and Trust would invest in short-term money market securities (usually Treasury bills and notes) with the stipulation that American Security and Trust would repurchase them from the Smithsonian to fulfill any Smithsonian cash needs. Prior to this agreement the Smithsonian invested its excess operating funds primarily in Certificates of Deposit. According to the Smithsonian the repurchase agreement provided greater liquidity with a comparable rate of return. In late 1975 a Smithsonian analysis of the operating account showed that there was an opportunity to also earn interest on the "float" resulting from the timing difference between the writing of the checks on the operating account and their being charged against the account. To accomplish this the Smithsonian broadened its repurchase agreement with American Security and Trust on December 3, 1975. Under the new agreement American Security and Trust examined the Smithsonian's operating account at the start of business each day. If the balance exceeded whatever amount the Smithsonian had designated as necessary for daily operations (that is, necessary to pay the checks which it expected to clear that day) American Security and Trust would invest the excess. If the balance went below the Smithsonian-designated minimum, American Security and Trust would sell or repurchase for its own account enough of the notes and bills it was holding for the Smithsonian to bring the balance up to the designated minimum. American Security and Trust did not charge the Smithsonian directly for this service but recovered its costs by giving the Smithsonian a slightly lower rate of interest than the bank earned on the funds invested for the Smithsonian. The use of the repurchase agreement for investment of excess operating funds and checking account float was interrupted twice after December 1975. The first occasion was early in 1976 when interest rates available on money market investments fell below the rate of interest which American Security and Trust paid on savings accounts. The Smithsonian - 4 -

-40- B-133332 opened a savings account at American Security and Trust on March 18, 1976, and kept the excess operating funds and the checking account float in the saving account. When needed, transfers were made from the savings account to the checking account to cover checks presented for payment. On May 28, 1976, it was again more profitable to use the repurchase agreement, and the Smithsonian then discontinued using the savings account. The second interruption lasted from January 3 to April 21, 1977, when Smithsonian officials were making a general reassessment of Smithsonian bank accounts. During this interruption the savings account was used for investment of excess operating funds, but no attempt was made to earn interest on the checking account float. On April 21, 1977, the Smithsonian reverted to using the repurchase agreement with American Security and Trust for investment of the checking account float, after judging it to be the most effective method for investing such funds. Excess operating funds were retained in the savings account. Our review of the daily bank statement balances in the operating account showed that the Smithsonian was most effective in maintaining this balance at minimum levels when it was investing both excess operating funds and the float. From July 1, 1975, through November 30, 1975, when the Smithsonian retained sole management of the American Security and Trust account, investing only the excess operating funds under the repurchase agreement, the average daily bank balance in the account was $798,000. For the 13 months (Dec. 1975 to Dec. 1976) that the checking account float, in addition to the excess operating funds, was invested through the repurchase agreement or in a savings account with American Security and Trust sharing in the management of the funds, the average daily bank balance dropped to $269,000. During January and February of 1977, when the Smithsonian again had sole management of the funds and used the savings account for investing only the excess operating funds, the average daily bank balance in the operating account was $850,000. However, the average daily check book balance was about $225,000--the difference of $625,000 represented by outstanding checks or the float. Investment of the checking account float, as well as the excess operating funds, with daily contact between American Security and - 5 -

-41- B-133332 Trust and Smithsonian officials seems to be the most effective way to keep the nonearning balance in the operating account to a minimum. The operating account at American Security and Trust was used extensively as the Smithsonian's principal checking account for payments other than payroll. During the 15-month period ended September 30, 1976, an average of over 2,600 transactions (deposits and withdrawals) a month were handled by this account. Since the only deposits to the operating account as of April 1977 are from the Treasury account to cover issued checks, excess operating funds no longer accumulate in this account. Excess operating funds are transferred periodically from the Treasury account to the American Security and Trust savings account. When the savings account balance gets larger than needed for operating liquidity, sums are transferred to the Smithsonian's short-term investment pool or to the outside investment managers for longer term investment. The savings account had a balance of about $1.4 million on June 22, 1977, the day after $1 million had been transferred to an investment manager for long-term investment. [[underlined]] Secretary's relationship to American Security and Trust [[/underlined]] The Secretary of the Smithsonian was appointed by the Board of Regents in 1963 as a private payroll employee to assume his duties in 1964. He became a member of the board of directors of American Security and Trust in February 1967 and resigned after 10 years service in December 1976. His service on the board was approved by the executive committee of the Smithsonian's Board of Regents. The Smithsonian Institution and the Smithsonian Research Foundation opened bank accounts with American Security and Trust in 1966, before the Secretary was a member of the bank's board of directors, and they were maintained after he was appointed to the board. However, these were not the first accounts the Smithsonian had with American Security and Trust. The Smithsonian first opened an account at the bank in 1927. Although the Secretary is a member of the Foundation's board of directors, he was not present at the meeting when it was decided to open the account at American Security and - 6 -

-42- B-133332 Trust. At that time, however, he was serving as president of the Foundation. We were advised by the Smithsonian that the Secretary no longer owns the American Security and Trust stock which he was required to hold as a director of the bank. [[underlined]] ACCOUNTS AT THE RIGGS NATIONAL BANK [[/underlined]] The Smithsonian opened its payroll checking account at Riggs National Bank in 1955. It is used to pay employees on the private payroll who do not have their paychecks sent to a bank. The Smithsonian's usual procedure for administering the payroll account is as follows. For each 2-week pay period the Smithsonian deposits in two increments the total amount of the paychecks written against the account for that period. The first deposit, usually for $150,000, is made on the same day for which the paychecks are dated. The second deposit, for the remainder of the payroll, follows 3 to 5 days later. The average daily bank balance in the account from July 1, 1975, to January 31, 1977, was about $96,000. The Smithsonian also has a collection account at Riggs. The account was opened in April 1976 for receipt of mail order payments for museum shop items. Three times daily Riggs' messengers pick up the mail orders from a post office box rented in the Smithsonian's name. The same day the mail is picked up, Riggs deposits any checks received into the collection account and forwards a deposit receipt and a listing of the checks received to the Smithsonian. In April 1977, the use of this account was expanded to include receipts from over-the-counter museum shop sales and payments received under letters of credit on Federal grants and contracts. Previously these receipts were initially deposited in the American Security and Trust operating account. Money is transferred daily from the collection account to the Treasury suspense account. The balance in the collection account is maintained, together with the payroll account balance, at a level high enough to reimburse Riggs for its payroll and collection services. Smithsonian officials advised us that use of the collection account reduces the amount of clerical work performed - 7 -

-43- B-133332 by Smithsonian employees and results in receipts from revenue-producing activities becoming available to the Smithsonian more quickly than if the receipts were deposited directly into the Treasury suspense account. Four separate trust accounts are also maintained at Riggs to temporarily hold funds awaiting investment by professional investment managers engaged by the Smithsonian for this purpose. These funds are used for long-term investment, as opposed to the day-to-day investing of operating funds by Smithsonian officials through the checking account repurchase agreement or the savings account at American Security and Trust. [[underlined]] CONCLUSION [[/underlined]] In our opinion, the Smithsonian has adopted adequate procedures for the management of cash in its private funds. It strives to maintain only sufficient funds in its two principal non-interest-bearing checking accounts to pay the payroll checks and other checks presented for payment each day. Through the use of repurchase agreements, a savings account, and short-term investments, the Smithsonian attempts to earn interest on any funds not needed immediately to pay its expenses. We believe that beginning in December 1975 it did this successfully, except during the period January 3 through April 20, 1977, when it made no attempt to earn interest on the American Security and Trust checking account float. On April 21, 1977, the Smithsonian resumed earning interest on that float. [[underlined]] Private, nonprofit corporations [[/underlined]] The Smithsonian Research Foundation maintained a bank account with American Security and Trust for about 11 years beginning in June 1966. In January 1977, the Smithsonian began acting as the Foundation's fiscal agent and custodian and closed the Foundation's account at American Security and Trust on May 3, 1977. As needed, the Foundation's funds are now withdrawn from the Smithsonian's appropriated fund accounts and deposited in the Smithsonian's U.S. Treasury suspense account. Foundation funds are then withdrawn from the Treasury account and deposited in the Riggs payroll account or the American Security and Trust operating account for the Foundation's use in paying payroll and other costs. - 8 -

-44- B-133332 The Smithsonian keeps separate accounting records for the Foundation's funds. In the 15-month period from July 1, 1975, to September 30, 1976, the average deposits per month in the Foundation's bank account totaled $166,144, while an average of 300 checks were paid per month, totaling $162,766. The average daily balance in the account for the 15-month period was $64,185. Although the Smithsonian Science Information Exchange has a small checking account at the Madison National Bank for satisfying minor immediate needs, its major cash transactions have been handled by the Smithsonian in a manner similar to that currently used for the Smithsonian Research Foundation. [[underlined]] Scope of review [[/underlined]] We reviewed the Smithsonian's policies and procedures for the use of bank accounts and banking services in managing its private funds. In this regard, we examined specifically the transactions recorded in two principal bank accounts--the American Security and Trust operating account and the Riggs payroll account--during the 15-month period ended September 30, 1976. We conducted followup work concerning several bank accounts to find out the current status of the Smithsonian's banking practices. We also discussed the Smithsonian's banking practices with Smithsonian officials and the certified public accountants who examined Smithsonian private funds, including those on deposit at financial institutions and the United States Treasury. Smithsonian officials reviewed the draft report and we considered their comments in preparing our final report. [[signed]] Elmer B. Staats [[/signed]] Comptroller General of the United States -9-

-45- [[underlined]] Minutes of Meeting of May 13, 1977 [[/underlined]] It was noted that the Minutes of the Regents' meeting of May 13, 1977, had been circulated to the members of the Board. The Board having no changes to suggest recommended approval of the Minutes. It was VOTED that the Minutes of the Meeting of May 13, 1977, as circulated on June 6, 1977, are approved.

-46- [[underlined]] FINANCIAL REPORT [[/underlined]] Mr. Wheeler summarized the following financial report: [[underlined]] Status of Federal Appropriations [[/underlined]] [[underlined]] Fiscal Year 1978 [[/underlined]]: Final Congressional action on our FY 1978 appropriation differed only slightly from the House mark-up reported at the last Regent's meeting. A partial restoration ($110,000) was allowed for continuing Research Awards projects, provided none of these funds were administered through the Smithsonian Research Foundation. A similar prohibition was added against the use of the SRF for handling the $4.0 million Foreign Currency Appropriation, with a maximum limitation of $500,000 for continuing grants to Smithsonian employees. The Travel request was cut by $100,000, or 11% below FY 1977. The $215,000 reduction by the House in restoration and renovation funds was rescinded, but our request for the $7,100,000 History & Technology 6th floor addition was still disallowed pending recommendation from the House investigative staff. Apparently reflecting Congressional questions raised by the report of the General Accounting Office, a $200,000 cut was made in base funding of the Science Information Exchange, and we were directed to begin immediately a transition of the Exchange to a federal status. A further Congressional restriction was imposed against grants to the Institution (and agencies within the Interior and Related Agencies Appropriation Bill) from the Arts and Humanities Endowments. Overall, however, treatment of the Institution's appropriation request was favorable, providing an additional $3,000,000 of Salaries & Expenses funding (or 79% of the additional amount requested), with major

-47- increases for: Uncontrollable increases in salaries & benefits | $960,000 Operating costs of new Zoo facilities | 700,000 Increased computer usage - Astrophysical Observ. | 325,000 Added protection services | 415,000 Increase for National Anthropological Film Ctr. | 350,000 Other increases | 592,000 Less reduction in Research Awards: | [[underlined]] (340,000[[/underlined]]) | $3,002,000 This raised our FY 1978 Salaries and Expenses appropriation to $88,238,000, with additional appropriations of $1,777,000 for the Science Information Exchange, $4,000,000 for the Foreign Currency Program and $5,250,000 for Construction, as shown in Exhibit A. The prospective October 1977 legislative pay raises will make it necessary to seek an FY 1978 supplemental appropriation as has been the case in prior years. A further favorable development is that we have now received reprogramming guidelines from the Congress, and these guidelines are currently in effect, eliminating any further need for a contingency fund. The Institution is now allowed to transfer under certain prescribed circumstances up to $250,000 or 10 percent (whichever is less) between individual line items and across activity lines (such as Science, History and Art, etc.). An "after the fact" quarterly reprogramming report to the Congress is required. [[underline]]Fiscal Year 1979[[/underline]]: We have recently submitted to OMB in the new Zero Base format a Salaries and Expenses budget request of $92,648,000, an increase of $4,410,000, or 5% above FY 1978. Additionally, $2,858,000 in various increments of priority is being sought for the Science

-48- Information Exchange, and $3,700,000 for the Foreign Currency Program. For construction, a total of $8,470,000 was requested, including $3,895,000 for restoration and repair (R&R) items, $4 million for continuation of projects in the Zoo Renovation Plan, and $575,000 to complete plans and design of the Museum Support Center. The requested R&R funds will be used to fund such projects as facade and roof repairs, improvements to aid the handicapped and provide fire protection, and upgrading of facilities in support of scientific research efforts. In preparing these appropriation requests an intensive study of our many programs, involving many levels of Smithsonian management, was carried out in accordance with the New Zero Base Budgeting procedure. As a result, some $1.6 million for specific programs was either eliminated entirely or moved to lower priority request levels, with substitution in the "Current Level" of funding of a similar amount of programs considered to be of higher priority. "Improvement Levels" consisting of progressively lower priority items, were then added to raise the total S&E request to the $4,410,000 increase cited above. Higher priority programs primarily included research awards, libraries support and implementation of the protection study recommendations. Offsetting reductions were made in the area of Protection Services by delaying summer evening hours to June 1st, and in exhibit and education programs of the National Air and Space Museum and the National Museum of History and Technology. Other major areas of emphasis in the request are programs of original scientific research, increased scientific technical support for the National Museum of Natural History, additional guard forces, and replacement funds for needed grants now prohibited from the Arts and Humanities Endowments.

-49- Mr. Wheeler called attention to the booklet in the back of each agenda book containing the Smithsonian Institution appropriation funds budget estimates for the fiscal year 1979 which had been submitted to the Office of Management and Budget and which he had summarized. The following motion was then adopted: VOTED that the Board of Regents concurs in the Fiscal Year 1979 Justification of Estimates of Federal Appropriations as presented to the Office of Management and Budget in September 1977.

-50- [[underlined]] TRUST FUNDS [[/underlined]] On the attached Exhibits A, B, and C are shown projected results for FY 1977, proposed budget for FY 1978 and tentative estimates for FY 1979 for unrestricted, special purpose, and restricted trust funds. [[underlined]] Fiscal Year 1977: [[/underlined]] Current projections for FY 1977, ending September 30, 1977 for [[underlined]] Unrestricted Funds [[/underlined]] are somewhat higher than estimates provided at the May Regents meeting, as the Magazine results continue to exceed expectations. Net gain from the Associates Program is now expected to be $6,657,000 (of which $6,500,000 is attributable directly to the [[underlined]] Smithsonian [[/underlined]] magazine) or about 10% more than previously estimated. Due to this increase, it will be possible by year end to complete the transfer of $5.0 million to unrestricted endowment funds, as well as sharing some $600,000 with the Bureaux. Income to the [[underlined]] Special Purpose Funds [[/underlined]] (primarily bureau revenue-sharing and bureau-generated funds) has increased substantially in the past two years, now exceeding $2,000,000 per year. In FY 1977, such income, furthermore, will be some $200,000 higher than previously estimated due to the popularity of such activities as the National Air and Space Museum theatres. Year-end balances of these funds will total over $5.0 million, including $1,630,000 magazine advertising tax reserve (status still unresolved), $1,110,000 for future funding of NASM films, $400,000 for construction of a parking facility at the Zoo, and varying amounts for discretionary use of individual bureaux, principally for acquisition of collection items, assistance with exhibitions or bureau publications or for other educational needs.

-51- [[underlined]] Restricted Fund [[/underlined]] gifts and grants in FY 1977 will be less than previously estimated and below the prior fiscal years, due primarily to a greatly reduced level of Folklife Festival activities and related support. [[underlined]] Fiscal Year 1978 Budget: Unrestricted Funds [[/underlined]] -- As shown in Exhibit B, the budget for these funds in FY 1978 reflects a continuation of trends of the past several years. Investment income will increase by $400,000 as a result of the sizable transfers to endowment funds. Auxiliary activities are expected to expand further, with the gross revenues increasing by $10 million to about $49 million; of the $10 million increase, $4 million is attributable to the Magazine, $2.4 million to the new book publishing program, $1.0 million to expansion of Shop and Mail Order sales, and $1.2 million to a planned promotional sale of musical records by the Division of Performing Arts. The increase in net income from such activities, however, is conservatively estimated in this budget at only about $500,000. Contained in the overall budget, but not obvious from the figures herein, are plans for expanded development of photo slide-audio cassette packages and the carrying out of future regional Associate programs without local fund raising support activities (in effect, an Associates benefit-subsidy of close to $200,000). On the expenditure side there will be a substantial increase in administrative expenses, largely attributable to higher salary levels and operating allotments will continue at a level of some $1,350,000 (Cooper-Hewitt operating support, $300,000; folklife documentation unit, $100,000; fluid research grants, $100,000; exhibit openings

[[page number]] -52- [[/page number]] and special events, $130,000, with the balance representing numerous minor program needs). It has been assumed that we should continue a $1 million annual reserve for possible taxation of Magazine advertising revenues as well as further revenue sharing with the Bureaux ($549,000). Even after these estimated expenditures, a substantial surplus would be shown, about $6,600,000, or $1.0 million higher than in FY 1977. The budget contemplates the following disposition of such surpluses as follows: [[4 column table]] [[underline]] Transfer to Endowment [[/underline]] | | | $4,000,000 [[underline]] Transfers to Plant [[/underline]] | | | - Chesap. Bay Ctr. Lab. Wing | $300,000 | | - CBCES Land Acquis. payments | [[underline]] 55,000 [[/underline]] | $355,000 | - So. Garden fencing & install. of Renwick Gates | | 150,000 | - Barney House renovations | | [[underline]] 40,000 [[/underline]] | 545,000 [[underline]] Reserve for collection acquisitions, research and outreach programs | | | [[underline]] 2,000,000 Total | | | $6,545,000 [[/4 column table]] While the building up of our Unrestricted Purpose Endowment Funds remains our number one priority goal, it is felt that the present surpluses could allow for concurrent allotment of a sum such as $2 million for new programmatic Institutional needs. Specific guidelines for allotment of such funds are still under consideration. They might include, however, a $1 million reserve for collection acquisition within the year of items costing $200,000 or more which would probably be impossible to finance from Federal appropriations for acquisition purposes. An additional $500,000 might be used to extend Smithsonian educational outreach programs--in the television area, for example.

-53- Another $500,000 could be utilized for new and innovative research ventures of a type not funded by Federal appropriations. More definitive guidelines on this subject can be proposed at the next Regents meeting. The suggestion was made to look into the need for renovating Belmont, the 18th century estate at Elkridge, Maryland, which serves as a conference center for various groups holding private meetings throughout the year. [[underlined]] Special Purposes and Restricted Fund Budgets [[/underlined]] -- As shown in Exhibit C, FY 1978 budgets for these funds are projected to be similar to FY 1977 results. While Bureau heads are primarily responsible for expenditure of these funds, further approval would be required for any significant deviation from authorized budgets for use of these funds. [[underlined]] Fiscal Year 1979: [[/underlined]] Estimates for FY 1979 Trust Fund income and expenditures shown in the attached Exhibits are currently included, since they are now being requested by OMB and must be furnished in January to the Congressional Appropriation Committees. The estimates used represent conservative projections of FY 1978 budgets. A breakdown of revenues and expenditures by individual Bureaus is shown in a subsequent statement.

-54- Dr. Gell-Mann suggested that a presentation might be made at the next meeting concerning plans for the use of trust funds for various projects related to scholarly visits to study collections which have not been concentrated on particularly in the past. A determination of the source of funds for such work, whether a request for increased for increased federal support or funds from private donors, or how much one would want to use trust funds of this kind, would be necessary. There are numerous collections that have been in the museum for perhaps half a century or more, which have not been fully studied and which would make great contributions to knowledge and understanding, and also marvelous things to share with a larger audience through publications. Endowed chairs were one of the suggested means for reaching this objective. Mr. Ripley described existing programs which provide research and study opportunities in history, art and science. A brochure titled "Smithsonian Opportunities" was brought to the Regents' attention. It provides information for individuals, institutions and organizations interested in the Institution's academic programs. Visiting scholars, scientists and students are encouraged to submit applications for appointments for research and study, in residence, using its facilities, collections and reference materials, with the advice and guidance of its staff members. Some appointments carry financial support and various types of visiting appointments, such as pre- or post-doctoral fellowships; open study programs for undergraduate and graduate students, and other individuals; short-term visits; and other special fellowships.

-55- A drive for endowed chairs for this purpose is slowly getting underway, and further information on this effort will be forthcoming, perhaps through the Smithson Society and the Associates. Further plans will be presented at the January meeting concerning this subject. The following motions concerning the trust funds of the Institution were adopted: VOTED that the Board of Regents approves the budget of the trust funds for the fiscal year 1978. VOTED that the Board of Regents appropriates for the service of the Institution, to expended by the Secretary, with the advice of the Executive Committee, with full discretion on the part of the Secretary as to items, the income of the Institution for the fiscal year ending on September 30, 1978.

-56- Exhibit A [[underline]]SMITHSONIAN FINANCIAL REPORT[[/underline]] The Smithsonian Institution derives its financial support as follows: ($1,000's) [[6-column table]] [[note: between 4th and 5th columns, written vertically is [[underline]]TRANSITION QUARTER OMITTED[[/underline]] ]] [[headers]] | [[underline]]FY 1979[[/underline]] | [[underline]]FY 1978[[/underline]] | [[underline]]FY 1977[[/underline]] | [[underline]]FY 1976[[/underline]] | [[underline]]FY 1975[[/underline]] | (Congr.Req.) | (Budget) | (Projected) | (Actual) | (Actual) [[/headers]] [[underline]]FOR OPERATING PURPOSES[[/underline]]: | | | | | [[underline]]FEDERAL APPROPRIATIONS[[/underline]] | | | | | Salaries and Expenses | $92,648* | $88,238* | $85,236 | $51,564 | $70,706 Smithsonian Sci. Info. Exh. | 2,858 | 1,777 | 1,972 | 1,940 | 1,805 Spec. Foreign Curr. Pgm. | [[underline]] 3,700[[/underline]] | [[underline]] 4,000[[/underline]] | [[underline]] 3,481[[/underline]] | [[underline]] 500[[/underline]] | [[underline]] 2,000[[/underline]] | $99,206 | $94,015 | $90,689 | $84,004 | $74,511 Fed. Agency Grants/Contracts | 11,500 | 11,400 | 11,000 | 11,525 | 12,292 Nonfederal Funds: | | | | | Gifts (exc. gifts to endow.) | | | | | Restricted | 2,500 | 2,500 | 2,460 | 4,307 | 4,177 Unrestr. & Spec. Purpose** | 50 | 50 | 205 | 354 | 253 Income from endow. and current funds invested | | | | | Restricted purpose | 1,650 | 1,643 | 1,800 | 1,634 | 1,724 Unrestricted purpose | 1,700 | 1,500 | 1,103 | 1,107 | 950 Auxiliary Activities | 8,175 | 8,438 | 7,912 | 4,047 | 2,523 Miscellaneous -Restricted | 900 | 900 | 915 | 949 | 636 -Unrestr. & Spec. Purp. (Net) | [[underline]]1,000[[/underline]] | [[underline]]998[[/underline]] | [[underline]]1,231[[/underline]] | [[underline]] 696[[/underline]] | [[underline]] 557[[/underline]] Total Operating Support | [[double-underline]]$126,681[[/double-underline]] | [[double-underline]]$121,444[[/double-underline]] | [[double-underline]]$117,315[[/double-underline]] | [[double-underline]]$108,623[[/double-underline]] | [[double-underline]]$97,623[[/double-underline]] | | | | | [[underline]]CONSTRUCTION FUNDS[[/underline]] | | | | | [[underline]]Federal Construction Funds[[/underline]]: | | | | | National Zoological Park | 4,000 | $ 2,500 | $ 6,580 | $ 8,390 | $ 9,420 Nat'l Air and Space Museum | - | - | - | 2,500 | 7,000 Museum Support Center | 575 | 325 | - | - | - Restor. & Renov. of Bldgs. | [[underline]] 3,895[[/underline]] | [[underline]] 2,425[[/underline]] | [[underline]] 2,950[[/underline]] | [[underline]] 1,192[[/underline]] | [[underline]] 1,490[[/underline]] Total Fed. Constr. Funds | [[double-underline]]$8,470[[/double-underline]] | [[double-underline]]4 5,250[[/double-underline]] | [[double-underline]]$ 9,530[[/double-underline]] | [[double-underline]]$12,082[[/double-underline]] | [[double-underline]]$17,910[[/double-underline]] | | | | | [[underline]]Non-Fed. Plant & Land Acq. Funds[[/underline]]: | | | | | Cooper-Hewitt | $ - | $ - | $ - | $ 425 | $ 162 Hirshhorn Museum | $ - | $ - | $ - | $ - | $ - Chesapeake Bay Center | $ - | $ - | $ - | 5 | 15 Other | [[underline]] - [[/underline]] | [[underline]] - [[/underline]] | [[underline]] - [[/underline]] | [[underline]] 100[[/underline]] | [[underline]] 10[[/underline]] Total Trust Funds | [[double-underline]]$ - [[/double-underline]] | [[double-underline]]$ - [[/double-underline]] | [[double-underline]]$ - [[/double-underline]] | [[double-underline]]$ 530[[/double-underline]] | [[double-underline]]$ 187[[/double-underline]] | | | | | [[underline]]ENDOWMENT FUND GIFTS AND BEQUESTS[[/underline]] | [[double-underline]]$ - [[/double-underline]] | [[double-underline]]$ - [[/double-underline]] | [[double-underline]]$ 231[[/double-underline]] | [[double-underline]]$ 45[[/double-underline]] | [[double-underline]]$ - [[/double-underline]] [[/6-column table]] [[5-column table]] [[headers]] [[underline]]NUMBER OF PERSONNEL[[/underline]] | [[underline]]6/30/77[[/underline]] | [[underline]]12/31/76[[/underline]] | [[underline]]6/30/75[[/underline]] | [[underline]]6/30/74[[/underline]] [[/headers]] Federal | 3,455 | 3,305 | 3,257 | 2,994 Trust Fund | [[underline]]1,155[[/underline]] | [[underline]]1,234[[/underline]] | [[underline]]1,182[[/underline]] | [[underline]]1,104[[/underline]] Total | 4,610 | 4,539 | 4,439 | 4,098 [[/5-column table]] ---- * Does not include provision for pay supplemental ** Excluding gifts for Associates (included under Auxiliary Activities)

-57- [[underline]]UNRESTRICTED TRUST FUNDS - OPERATING STATEMENT[[/underline]] Exhibit B ($1,000's) [[6-column table]] [[note: between 4th and 5th columns, written vertically is [[underline]]TRANSITION QUARTER OMITTED[[/underline]] ]] [[line across page]] [[headers]] | Tent. Budg. | Budget | Projection | [[span 2 columns]]A C T U A L[[/span 2 columns]] | [[underline]]FY 1979[[/underline]] | [[underline]]FY 1978[[/underline]] | [[underline]]FY 1977[[/underline]] | [[underline]]FY 1976[[/underline]] | [[underline]]FY 1975[[/underline]] [[/headers]] [[line across page]] Income - Investment | $ 1,700 | $ 1,500 | $ 1,100 | $1,107 | $ 950 - Gifts & Misc | [[underline]] 75[[/underline]] | [[underline]] 75[[/underline]] | [[underline]] 75[[/underline]] | [[underline]] 120[[/underline]] | [[underline]] 59[[/underline]] - Total Income | 1,775 | 1,575 | 1,175 | 1,227 | 1,009 [[underline]]Auxiliary Activities[[/underline]] | | | | | Gross Revenue | 52,745 | 48,743 | 39,797 | 26,939 | 19,017 Less Costs and Expenses | [[underline]]44,570[[/underline]] | [[underline]]40,305[[/underline]] | [[underline]]31,885[[/underline]] | [[underline]]22,892[[/underline]] | [[underline]]16,494[[/underline]] Total Act. Gain (Loss) | 8,175 | 8,438 | 7,912 | 4,047 | 2,523 [[underline]]Expenditures[[/underline]] | | | | | Admin. Expense | 6,750 | 5,590 | 5,223 | 4,507 | 4,004 Less Adm. O/H Recovery | [[underline]][6,150[/underline]] | [[underline]]5,450[[/underline]] | [[underline]]4,723[[/underline]] | [[underline]]4,558[[/underline]] | [[underline]]3,644[[/underline]] Net Adm. Expense | 600 | 500 | 500 | (51) | 360 Allotments | 1,550 | 1,359 | 1,378 | 752 | 947 Reserve for acq., Research and Outreach Pgms. | 2,000 | 2,000 | - | - | - Reserve - Magazine | 1,000 | 1,000 | 1,000 | 480 | - Revenue Sharing-Int. & Act. | [[underline]] 575[[/underline]] | [[underline]] 549[[/underline]] | [[underline]] 600[[/underline]] | [[underline]] 436[[/underline]] | [[underline]] 416[[/underline]] [[underline]]Net Gain (Loss) Before Trans[[/underline]]. | [[double-underline]]4,225[[/double-underline]] | [[double-underline]]4,605[[/double-underline]] | [[double-underline]]5,609[[/double-underline]] | [[double-underline]]3,657[[/double-underline]] | [[double-underline]]1,809[[/double-underline]] Transfers - To Plant Funds | 100 | 545 | 455 | 2,495 | 97 - To Endow. Funds | [[underline]]4,000[[/underline]] | [[underline]]4,000[[/underline]] | [[underline]]5,000[[/underline]] | [[underline]]1,021[[/underline]] | [[underline]]1,422[[/underline]] [[underline]]Net Gain (Loss) After Trans[[/underline]]. | [[double-underline]] 125[[/double-underline]] | [[double-underline]] 60[[/double-underline]] | [[double-underline]] 154[[/double-underline]] | [[double-underline]] 141[[/double-underline]] | [[double-underline]]290[[/double-underline]] [[double-underline]]Ending Fund Balance[[/double-underline]] | [[double-underline]]$4,413[[/double-underline]] | [[double-underline]]$4,288[[/double-underline]] | [[double-underline]]$4,228[[/double-underline]] | [[double-underline]]$3,908[[/double-underline]] | [[double-underline]]$3,767[[/double-underline]] [[/6-column table]] [[underline]]DETAIL OF AUXILIARY ACTIVITIES[[/underline]] [[6-column table]] [[underline]]Associates Program[[/underline]] | | | | | Magazine Income | $32,400 | $28,444 | $24,400 | $16,042 | $10,816 Gifts | 350 | 297 | 265 | 177 | 145 Other Income | [[underline]] 6,150[[/underline]] | [[underline]] 5,065[[/underline]] | [[underline]] 5,356[[/underline]] | [[underline]] 4,506[[/underline]] | [[underline]] 2,749[[/underline]] Total Income | 38,900 | 33,806 | 30,021 | 20,725 | 13,710 Expenses | [[underline]]32,385[[/underline]] | [[underline]]27,506[[/underline]] | [[underline]]23,364[[/underline]] | [[underline]]17,469[[/underline]] | [[underline]]11,742[[/underline]] Net Gain (Loss) | 6,515 | 6,300 | 6,657 | 3,256 | 1,968 | | | | | [[underline]]Shops/Mail Order - Income[[/underline]] | 8,500 | 7,741 | 6,609 | 3,619 | 3,221 Expenses | [[underline]]8,000[[/underline]] | [[underline]]7,341[[/underline]] | [[underline]]6,019[[/underline]] | [[underline]]3,556[[/underline]] | [[underline]]2,804[[/underline]] Net Gain(Loss) | 500 | 400 | 590 | 63 | 417 | | | | | [[underline]]Concessions & Prod. Dev. Inc.[[/underline]] | [[underline]]1,845[[/underline]] | [[underline]]1,823[[/underline]] | [[underline]]1,750[[/underline]] | [[underline]]1,242[[/underline]] | [[underline]]517[[/underline]] Expenses | [[underline]] 335[[/underline]] | [[underline]] 286[[/underline]] | [[underline]] 205[[/underline]] | [[underline]] 127[[/underline]] | [[underline]] 84[[/underline]] | | | | | [[underline]]Pub. Task Force - Income[[/underline]] | 1,300 | 2,432 | - | - | - Expenses | [[underline]] 800[[/underline]] | [[underline]]1,432[[/underline]] | [[underline]] 200[[/underline]] | [[underline]] - [[/underline]] | [[underline]] - [[/underline]] Net Gain (Loss) | 500 | 1,000 | (200) | - | - | | | | | [[underline]]Performing Arts - Income[[/underline]] | 600 | 1,600 | 379 | 527 | 479 Expenses | [[underline]] 800[[/underline]] | [[underline]] 1,800[[/underline]] | [[underline]] 679[[/underline]] | [[underline]] 637[[/underline]] | [[underline]] 558[[/underline]] Net Gain (Loss) | (200) | (200) | (300) | (110) | (79) | | | | | [[underline]]Other[[/underline]] * - Income | 1,600 | 1,341 | 1,038 | 826 | 1,090 Expenses | [[underline]]2,250[[/underline]] | [[underline]]1,940[[/underline]] | [[underline]]1,418[[/underline]] | [[underline]]1,103[[/underline]] | [[underline]]1,306[[/underline]] Net Gain (Loss) | (650) | (599) | (380) | (277) | (216) | | | | | [[underline]]Total Activities[[/underline]] - Income | 52,745 | 48,743 | 39,797 | 26,939 | 19,017 Expenses | [[underline]]44,570[[/underline]] | [[underline]]40,305[[/underline]] | [[underline]]31,885[[/underline]] | [[underline]]22,892[[/underline]] | [[underline]]16,494[[/underline]] Net Gain (Loss) | [[double-underline]]$8,175[[/double-underline]] | [[double-underline]]$8,438[[/double-underline]] | [[double-underline]]$7,912[[/double-underline]] | [[double-underline]]$4,047[[/double-underline]] | [[double-underline]]$2,523[[/double-underline]] [[/6-column table]] ---- * This includes Traveling Exhibits, Belmont, Photo Svcs. Telecommunications and SI Press

-58- Exhibit C [[underline]]SPECIAL PURPOSE & RESTRICTED TRUST FUNDS[[/underline]] ($1,000's) [[6-column table]] [[note: between 4th and 5th columns, written vertically is [[underline]]TRANSITION QUARTER OMITTED[[/underline]] ]] [[header]] [[horizontal line across page]] | [[underline]]Tent. Budget[[/underline]] | [[underline]]Budget [[/underline]] | [[underline]]Projected[[/underline]] | [[span 2 columns]][[underline]] Actual [[/underline]][[/span 2 columns]] | FY 1979 | FY 1978 | FY 1977 | FY 1976 | FY 1975 [[horizontal line across page]] [[/header]] [[underline]]SPECIAL PURPOSE FUNDS[[/underline]] | | | | | [[underline]]INCOME[[/underline]]: | | | | | Gifts | $ -- | $ -- | $ 170 | $ 288 | $ 207 Sales & Other Revenue | 1,675 | 1,700 | 1,588 | 642 | 544 Revenue Sharing Trans. | [[underline]] 325[[/underline]] | [[underline]] 324[[/underline]] | [[underline]] 400[[/underline]] | [[underline]] 219[[/underline]] | [[underline]] 222[[/underline]] Total Income | $2,000 | $2,024 | $2,158 | $1,149 | $ 973 | | | | | [[underline]]FUNDS APPLIED[[/underline]]: | | | | | NASM - Theatres, etc. | $ 700 | $ 727 | $ 394 | $ -- | $ -- All Other Revolving | 150 | 117 | 75 | 225 | 164 Fluid Research | 100 | 100 | 50 | 78 | 76 Bureau Discretionary Funds | [[underline]] 350[[/underline]] | [[underline]] 514[[/underline]] | [[underline]] 236[[/underline]] | [[underline]] 640[[/underline]] | [[underline]] 265[[/underline]] Total Funds Applied | [[underline]]$1,300[[/underline]] | [[underline]]$1,458[[/underline]] | [[underline]]$ 755[[/underline]] | [[underline]] $943[[/underline]] | [[underline]]$505[[/underline]] Transfers (In) Out | | | | | - Magazine Reserve | ($1,000) | ($1,000) | ($1,000) | ($480) | $ -- - All Other | (300) | (185) | (135) | (546) | (143) Ending Balance | [[double-underline]]$8,777[[/double-underline]] | [[double-underline]]$6,777[[/double-underline]] | [[double-underline]]$5,026[[/double-underline]] | [[double-underline]]$2,303[[/double-underline]] | [[double-underline]]$1,071[[/double-underline]] | * * * * * | * * * * | * * * | | [[underline]]RESTRICTED FUNDS[[/underline]] | | | | | [[underline]]INCOME[[/underline]]: | | | | | Investments | $1,650 | $1,643 | $1,800 | $1,634 | $1,724 Gifts & Grants | 2,500 | 2,500 | 2,460 | 4,307 | 4,177 Miscellaneous | 900 | 900 | 915 | 949 | 636 Interest - Transfers | [[underline]] 150[[/underline]] | [[underline]] 150[[/underline]] | [[underline]] 150[[/underline]] | [[underline]] 217[[/underline]] | [[underline]] 194[[/underline]] Total Income | $5,200 | $5,193 | $5,325 | $7,107 | $6,731 [[underline]]EXPENSES AND OTHER TRANS.[[/underline]] | $5,175 | $5,175 | $5,392 | $7,217 | $5,160 [[underline]]ENDING BALANCES[[/underline]] | [[double-underline]]$3,960[[/double-underline]] | [[double-underline]]$3,935[[/double-underline]] | [[double-underline]]$3,917[[/double-underline]] | [[double-underline]]$4,264[[/double-underline]] | [[double-underline]]$4,374[[/double-underline]] | | | | | [[underline]]DETAIL[[/underline]]: | | | | | Freer Operating - Income | $1,000 | $ 944 | $ 970 | $1,295 | $1,022 -Expenses | [[underline]] 1,000[[/underline]] | [[underline]] 975[[/underline]] | [[underline]] 976[[/underline]] | [[underline]] 1,126[[/underline]] | [[underline]] 1,088[[/underline]] -Ending Balance | $ 157 | $ 157 | $ 188 | $ 294 | $ 125 | | | | | Cooper-Hewitt - Income | $ 800 | $ 760 | $ 536 | $ 217 | $ 210 -Expenses | 1,120 | 1,080 | 906 | 281 | 244 -Allotment from Unrest. Funds | (300)* | (300)* | (350) | (64) | (34) -Net Transfers In | [[underline]] (20[[/underline]]) | [[underline]] (20[[/underline]]) | [[underline]] (20[[/underline]]) | [[underline]] -- [[/underline]] | [[underline]] -- [[/underline]] -Ending Balance | $ -0- | $ -0- | $ -0- | $ -0- | $ -0- | | | | | Arch. Am. Art Oper. - Income | $285 | $ 270 | $ 245 | $ 184 | $ 329 -Expenses | [[underline]] 285[[/underline]] | [[underline]] 270[[/underline]] | [[underline]] 255[[/underline]] | [[underline]] 252[[/underline]] | [[underline]] 201[[/underline]] -Ending Balance | $ 199 | $ 199 | $ 199 | $253 | $ 321 | | | | | Ft. Pierce Oper. - Income | $ 600 | $ 600 | $ 600 | $ 538 | $ 526 -Expenses | 400 | 400 | 400 | 501 | 645 -Net Transfers (In) Out | [[underline]] 200[[/underline]] | [[underline]] 200[[/underline]] | [[underline]] 250[[/underline]] | [[underline]] -- [[/underline]] | [[underline]] 26[[/underline]] -Ending Balance | $ 38 | $ 38 | $ 38 | $ 42 | $ 5 | | | | | All Other Funds - Income | $2,365 | $2,469 | $2,824 | $4,656 | $4,450 -Expenses | 2,295 | 2,375 | 2,768 | 5,298 | 3,215 -Net Transfers (In) Out | [[underline]] 45[[/underline]] | [[underline]] 45[[/underline]] | [[underline]] 57[[/underline]] | [[underline]] (394[[/underline]]) | [[underline]] (419[[/underline]]) -Ending Balance | $3,566 | $3,541 | $3,492 | $3,675 | $3,923 [[/6-column table]] * Not included in Restricted Fund totals

-59- [[underline]] TRUST FUNDS COMPARATIVE BALANCE SHEET CURRENT FUNDS [[/underline]] Exhibit D ($1,000's) [[5 column table]] [[underline]] Assets: | 6/30/77 | 9/30/76 | 6/30/76 | 6/30/75 [[/underline]] Cash | $1,871 | $1,515| $994 | $778 Investments (Book Values)* | 12,104 | 8,150 | 11,712 | 10,150 Receivables | 6,950 | 7,489 | 5,184 | 4,854 Inventories | 1,647 | 1,938 | 1,766 | 1,119 Prepaid Expense | 1,100 | 1,115 | 351 | 430 Deferred Magazine Expense | 2,300 | 2,318 | 2,049 | 1,781 Capital Improvements/Equipment | [[underline]] 1,311 | 1,070 | 893 | 598 [[/underline]] Total Assets | [[double underline]] $27,283 | $23,595 | $22,949 | $19,710 [[/double underline]] [[underline]] Liabilities and Fund Balances: [[/underline]] | | | | Due to other Funds | 331 | $968 | $1,776 | $1,164 Deferred Magazine Subscr. Income | 10,500 | 7,856 | 7,704 | 5,217 Other current Liabilities | 3,755 | 4,125 | 3,467 | 4,012 Fund balances: | | | | Unrestricted Funds: | | | | General Purpose | 4,516 | 4,074 | 3,909 | 3,768 Special Purpose | 4,123 | 2,488 | 1,375 | 1,071 Restricted Funds: | [[underline]] 4,058 | 4,084 | 4,718 | 4,478 [[/underline]] Total Liabilities & Fund Bal. | [[double underline]] $27,283 | $23,595 | $22,949 | $19,710 [[/double underline]] *Market Values | [[underline]] $11,940 | $8,094 | $11,643 | $10,083 [[/underline]] [[/5 column table]] [[line]] [[underline]] ENDOWMENT FUNDS [[/underline]] [[5 column table]] [[underline]] Assets: [[/underline]] | | | | Cash & Notes Receivable | $329 | $483 | $(228) | $90 Due from current funds | 220 | 554 | 712 | 316 Investments (Book Values)* | 44,540 | 40,297 | 40,150 | 40,015 Loan to U.S. Treasury | [[underline]] 1,000 | 1,000 | 1,000 | 1,000 [[/underline]] Total Assets | [[double underline]] $46,089 | $42,334 | $41,634 | $41,421 [[/double underline]] [[underline]] Endowment Fund Balances: [[/underline]] | | | | Endowment | $35,157 | $32,654 | $32,704 | $33,355 Quasi-endowment | [[underline]] 10,932 | 9,680 | 8,930 | 8,066 [[/underline]] Total Endow. Fund Balances | [[double underline]] $46,089 | $42,334 | $41,634 | $41,421 [[/double underline]] *Market Values | [[underline]] $45,772 | $42,668 | $41,602 | $40,532 [[/underline]] [[/5 column table]] [[line]] [[underline]] PLANT FUNDS [[/underline]] [[5 column table]] [[underline]] Assets: [[/underline]] | | | | Due from Current Funds | $(60) | $42 | $708 | $461 Real Est.-Cost or Appraised Value | [[underline]] 10,335 | 9,875 | 8,948 | 6,230 [[/underline]] Total Assets | [[double underline]] $10,275 | $9,917 | $9,656 | $6,691 [[/double underline]] [[underline]] Liabilities & Fund Balances | | | | Liabilities | 145 | $208 | $235 | $280 Acquisition Fund Balance | (63) | 38 | 703 | 451 Investment in Plant | [[underline]] 10,193 | 9,671 | 8,718 | 5,960 [[/underline]] Total Liabil. & Fund Bals. | [[double underline]] $10,275 | $9,917 | $9,656 | $6,691 [[/double underline]] [[line]] [[5 column table]] [[underline]] AGENCY FUNDS [[/underline]] [[underline]] Assets [[/underline]] | | | | Due from Current Funds | 171 | $372 | $433 | $ 386 Investment at Cost | [[underline]] |10 | 10 | 10 | 10 [[/underline]] Total Assets |[[double underline]] | $181 | $382 | $443 | $396 [[/double underline]] [[underline]] Fund Balance: [[/underline]] | | | | Due to Current Funds | $- | $- |$209 | $246 Deposits Held in Custody | [[underline]] | 181 | 382 | 234 | 150 [[/underline]] Total Funds | [[double underline]] | $181 | $382 | $443 | $396 [[/double underline]]

-60- [[underlined]] ESTIMATED TRUST FUNDS BUDGET Fiscal Year 1979 [[/underlined]] The Office of Management and Budget requested that the Smithsonian provide to them Trust Fund budget estimates for FY 1978 and FY 1979 for their background when considering the Institution's FY 1979 Federal appropriation request. Due to the timing of the Federal budget cycle, OMB requires this information as soon as possible; with the approval of the Executive Committee, the attached schedules will be provided on the clear understanding that the FY 1978 figures are tentative budgets and that the FY 1979 estimates are projections possibly subject to extensive modifications. Similar projections of FY 1979 in the same format will be required by the Senate and House Appropriations Committees when the President's Budget is submitted next January. The FY 1978 budget presents, with greater detail as to bureau expenditures, the same information outlined in the preceding Financial Report (Exhibits A, B and C). The FY 1979 projections assume a level of activity throughout the Institution similar to FY 1978, with only minor changes reflecting circumstances of which management is currently aware. The Regents adopted the following motion: VOTED that the Board of Regents approves the submission of the Estimated Trust Funds Budget for fiscal year 1979, as requested by the Senate and House Appropriations Subcommittees, to be used in conjunction with the pending appropriation request.

-61- 9/21/77 Source and Application of Operating Funds - FY 1977 - FY 1979 Excluding Foreign Currency, Construction & Plant Funds p. 1 Of 7 ($1,000's) [[table - 13 columns]] [[header]] | [[span 4 columns]]FY 1977 PROJECTED[[/span 4 columns]] | [[span 4 columns]]FY 1978 BUDGET[[/span 4 columns]] | [[span 4 columns]]FY 1979 ESTIMATED[[/span 4 columns]] | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | | Unrest. | Rest. | | | Unrest. | Rest. | | | Unrest. | Rest. | [[/header]] [[underline]]FUNDS PROVIDED[[/underline]] | | | | | | | | | | | | Federal Appropriations | 85,236 | - | - | - | 88,238 | - | - | - | 92,648 | - | - | - Investments | - | 1,103 | 1,800 | - | - | 1,500 | 1,643 | - | - | 1,700 | 1,650 | - Gifts, grants & contracts | - | 205 | 2,460 | 10,899 | - | 50 | 2,500 | 11,400 | - | 50 | 2,500 | 11,500 Auxil. Act. Revenues: Associates - Magazine | - | 24,400 | - | - | - | 28,444 | - | - | - | 32,400 | - | - - Other | - | 5,621 | - | - | - | 5,362 | - | - | - | 6,500 | - | - Mus. Shops/Mail Order | - | 6,609 | - | - | - | 7,741 | - | - | - | 8,500 | - | - Concessions | - | 1,641 | - | - | - | 1,697 | - | - | - | 1,775 | - | - Other Auxiliary Acts. | [[underline]]- | 1,526 | - | - | - | 5,499 | - | - | - | 3,570 | - | -[[/underline]] Total Auxiliary Acts. | - | 39,797 | - | - | - | 48,743 | - | - | - | 52,745 | - | - Bureau activities | - | 1,585 | - | - | - | 1,700 | - | - | - | 1,675 | - | - Miscellaneous | [[underline]]- | 40 | 915 | - | - | 25 | 900 | - | - | 25 | 900 | -[[/underline]] [[underline]]Total Income | 85,236 | 42,730 | 5,175 |10,899 | 88,238 | 52,018 | 5,043 | 11,400 | 92,648 | 56,195 | 5,050 | 11,500[[/underline]] Less Expenses: Auxil. Acts. Associates - Magazine | - | 17,900 | - | - | - | 21,844 | - | - | - | 25,600 | - | - - Other | - | 5,464 | - | - | - | 5,662 | - | - | - | 6,785 | - | - Mus. Shops/Mail Order | - | 6,019 | - | - | - | 7,341 | - | - | - | 8,000 | - | - Other Auxiliary Acts. | [[underline]]- | 2,502 | - | - | - | 5,458 | - | - | - | 4,185 | - | -[[/underline]] Total Auxiliary Acts. | 85,236 | 31,885 | - | - | - | 40,305 | - | - | - | 44,570 | - | - [[underline]]Bureau Activities | | 394 | - | - | - | 727 | - | - | - | 700 | - | -[[/underline]] [[underline]]Net Funds Provided | 85,236 | 10,451 | 5,175 | 10,899 | 88,238 | 10,986 | 5,043 | 11,400 | 92,648 | 10,925 | 5,050 | 11,500[[/underline]] [[underline]]FUNDS APPLIED[[/underline]] (Net of Act.Ex) Science | 34,040 | 516 | 1,245 | 10,045 | 35,462 | 439 | 1,220 | 10,393 | 37,687 | 424 | 1,220 | 10,475 History and Art | 14,696 | 539 | 3,598 | 340 | 15,073 | 888 | 3,205 | 367 | 15,823 | 880 | 3,205 | 375 Public Service | 2,134 | 114 | 284 | 293 | 2,262 | 108 | 200 | 304 | 2,422 | 116 | 200 | 325 Museum Programs | 6,668 | 178 | 3 | 208 | 6,937 | 218 | - | 236 | 7,182 | 219 | - | 225 Other Activities | - | - | - | - | - | 2,082 | - | - | - | 2,000 | - | - Support Activities | 22,159 | 209 | 25 | - | 22,594 | 436 | 25 | - | 23,375 | 441 | 25 | - Administration (Net) | [[underline]]5,539 | 248 | 150 | 114 | 5,910 | 309 | 150 | 100 | 6,159 | 470 | 150 | 100[[/underline]] [[underline]]Total | 85,236 | 1,804 | 5,305 | 11,000 | 88,238 | 4,480 | 4,800 | 11,400 | 92,648 | 4,550 | 4,800 | 11,500[[/underline]] TRANSFERS - Current Funds | - | 500 | (500) | - | - | 150 | (150) | - | - | 150 | (150) | - - To Endowment Funds | - | 5,000 | 437 | - | - | 4,000 | 375 | - | - | 4,000 | 375 | - [[underline]]- To Plant Funds | - | 455 | - | - | - | 545 | - | - | - | 100 | - | -[[/underline]] FUND BALANCE - Begin. of Yr. | - | 6,562 | 3,984 | 101 | - | 9,254 | 3,917 | | - | - | 11,065 | 3,935 | - CHANGE IN FUND BALANCE | - | 2,692 | (67) | (101) | - | 1,811 | 18 | - | - | 2,125 | 25 | - [[underline]]FUND BALANCE - End of Year | - | 9,254 | 3,917 | - | - | 11,065 | 3,935 | - | - | 13,190 | 3,960 | -[[/underline]] [[/table - 13 columns]]

-62- Source and Application of Operating Funds - FY 1977 - FY 1979 Excluding Foreign Currency, Construction & Plant Funds p. 2 Of 7 ($1,000's) [[table - 13 columns]] [[header]] | [[span 4 columns]]FY 1977 PROJECTED[[/span 4 columns]] | [[span 4 columns]]FY 1978 BUDGET[[/span 4 columns]] | [[span 4 columns]]FY 1979 ESTIMATED[[/span 4 columns]] | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | | Unrest. | Rest. | | | Unrest. | Rest. | | | Unrest. | Rest. | [[/header]] [[underline]]SCIENCE[[/underline]] | | | | | | | | | | | | Assistant Secretary | 266 | 37 | 62 | 143 | 291 | 31 | 60 | 148 | 294 | 31 | 60 | 150 Museum of Natural History | 11,365 | 140 | 249 | 981 | 11,665 | 156 | 240 | 1,015 | 12,325 | 124 | 240 | 1,000 Smith. Astrophysical Observ. | 3,953 | 1,813 | 354 | 7,402 | 4,352 | 1,796 | 350 | 7,875 | 4,389 | 1,990 | 350 | 7,950 (Overhead Recovery) | - | (1,831) | - | - | - | (1,750) | - | - | - | (1,950) | - | - Tropical Research Institute | 1,492 | 37 | 20 | 9 | 1,553 | 62 | 25 | 10 | 1,776 | 66 | 25 | 10 Radiation Biology Laboratory | 1,893 | 7 | 23 | 67 | 1,882 | 6 | 25 | 69 | 1,903 | - | 25 | 75 Office of Internat'l Programs | 231 | 1 | - | 263 | 253 | - | - | 272 | 214 | - | - | 275 Chesapeake Bay Center | 597 | 44 | 18 | 485 | 606 | 54 | 20 | 500 | 683 | 58 | 20 | 500 Nat'l Air & Space Museum | 6,095 | 467* | 23 | 293 | 5,783 | 739* | 20 | 375 | 5,783 | 727* | 20 | 375 Nat'l Zoological Park | 6,987 | 74 | 34 | 60 | 7,776 | 61 | 30 | 62 | 8,218 | 67 | 30 | 65 Center for Study of Man | 398 | 71 | 53 | 66 | 820 | 11 | 50 | 67 | 999 | 11 | 50 | 75 Research Awards Program | 390 | - | - | - | 110 | - | - | - | 729 | - | - | - Int'l Environ. Science Pgm. | 373 | - | - | - | 371 | - | - | - | 374 | - | - | - Fort Pierce | - | - | 401 | - | - | - | 400 | - | - | - | 400 | - Interdisciplinary Communications Program | - | 50 | 8 | 276 | - | - | - | - | - | - | - | - [[line across page]] TOTAL SCIENCE | 34,040 | 910 | 1,245 | 10,045 | 35,462 | 1,166 | 1,220 | 10,393 | 37,687 | 1,124 | 1,220 | 10,475 Less expenses of generating revenue | - | (394) | - | - | | (727) | - | - | - | (700) | - | - [[line across page]] TOTAL SCIENCE (Net) | 34,040 | 516 | 1,245 | 10,045 | 35,462 | 439 | 1,220 | 10,393 | 37,687 | 424 | 1,220 | 10,475 | | | | | | | | | | | | * Expenses covered all or in part from revenues of activity | | | | | | | | | | | | [[/table - 13 columns]]

[[page is in landscape orientation]] [[right margin]] [[-63- written vertically]] [[/right margin]] Source and Application of Operating Funds - FY 1977 - FY 1979 Excluding Foreign Currency, Construction & Plant Funds p. 3 Of 7 ($1,000's) [[table - 13 columns]] [[header]] | [[span 4 columns]]FY 1977 PROJECTED[[/span 4 columns]] | [[span 4 columns]]FY 1978 BUDGET[[/span 4 columns]] | [[span 4 columns]]FY 1979 ESTIMATED[[/span 4 columns]] | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | | Unrest. | Rest. | | | Unrest. | Rest. | | | Unrest. | Rest. | [[/header]] [[underline]]HISTORY AND ART[[/underline]] | | | | | | | | | | | | Assistant Secretary | 105 | 55 | - | - | 128 | 60 | - | - | 125 | 63 | - | - Joseph Henry Papers | 109 | 1 | 1 | 38 | 105 | - | 5 | 42 | 137 | - | 5 | 45 Nat'l Museum Hist. & Tech. | 5,901 | 81 | 396 | 5 | 6,141 | 190 | 325 | 5 | 6,070 | 181 | 325 | 5 Nat'l Collection Fine Arts | 2,547 | 105 | 44 | 96 | 2,675 | 147 | 50 | 106 | 2,945 | 123 | 50 | 110 Nat'l Portrait Gallery | 1,912 | 137 | 129 | 50 | 2,012 | 27 | 110 | 55 | 2,192 | 26 | 110 | 55 Hirshhorn Museum | 1,880 | 16 | 1 | - | 1,956 | 29 | - | - | 1,993 | 26 | - | - Freer Gallery of Art | 474 | - | 981 | 27 | 549 | - | 985 | 30 | 554 | - | 985 | 30 Archives of American Art | 353 | - | 280 | - | 396 | 1 | 280 | - | 420 | 1 | 280 | - Cooper-Hewitt Museum | 409 | - | 1,303 | 17 | 377 | 316 | 1,130 | 19 | 557 | 316 | 1,130 | 20 Office Academic Studies | 475 | 16 | 7 | - | 502 | 18 | 10 | - | 544 | 19 | 10 | - American & Folklife Studies | 119 | 62 | 6 | 9 | 232 | 100 | 10 | 10 | 286 | 125 | 10 | 10 Am. Revolution Bicen. Pgm. | 412 | - | - | - | - | - | - | - | - | - | - | - [[underline]]Woodrow Wilson Center | 1,140* | 66** | 450 | 98 | 1,256* | -** | 300 | 100 | 1,384* | -** | 300 | 100[[/underline]] TOTAL HISTORY & ART | 14,696 | 539 | 3,598 | 340 | 15,073 | 888 | 3,205 | 367 | 15,823 | 880 | 3,205 | 375 | | | | | | | | | | | | * For information only; not included in totals. Smithsonian acts as fiscal agent for all Wilson Center funds. ** Does not include expenditures of [[underline]]Wilson Quarterly[[/underline]] (roughly $1 million), an auxiliary activity of the Wilson Center. [[/table - 13 columns]]

-64- Source and Application of Operating Funds - FY 1977 - FY 1979 Excluding Foreign Currency, Construction & Plant Funds p. 4 Of 7 ($1,000s) [[13-column table]] [[header]] | [[span 4 columns]]FY 1977 PROJECTED[[/span 4 columns]] | [[span 4 columns]]FY 1978 BUDGET[[/span 4 columns]] | [[span 4 columns]]FY 1979 ESTIMATED[[/span 4 columns]] | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | | Unrest. | Rest. | | | Unrest. | Rest. | | | Unrest. | Rest. | [[/header]] [[underline]]PUBLIC SERVICE[[/underline]] | | | | | | | | | | | | Assistant Secretary | 175 | 161* | - | 7 | 197 | 233* | - | 8 | 183 | 251* | -- | 15 Anacostia Neighborhood Mus. | 524 | 29 | 166 | - | 589 | 35 | 75 | - | 597 | 35 | 75 | - Internat'l Exchange Service | 207 | - | - | - | 224 | 1 | - | - | 205 | 1 | - | - Division of Performing Arts | 336 | 699* | (25) | 250 | 347 | 1,804* | 65 | 271 | 457 | 804* | 65 | 285 Smith. Institution Press | 679 | 370* | - | 32 | 688 | 527* | - | 25 | 705 | 575* | - | - Office Symposia & Seminars | 44 | 52 | 131 | 4 | 45 | 54 | 50 | - | 61 | 59 | 50 | 25 Office Elem. & Secondary Education | 133 | - | 10 | - | 135 | 1 | 10 | - | 176 | 1 | 10 | - Office of Telecommunications | 36 | 197* | 2 | - | 37 | 300* | - | - | 38 | 450* | - | - [[line across page]] TOTAL PUBLIC SERVICE | 2,134 | 1,508 | 284 | 293 | 2,262 | 2,955 | 200 | 304 | 2,422 | 2,176 | 200 | 325 Less expenses of generating revenue | - | (1,394) | - | - | - | (2,847) | - | - | - | (2,060) | - | - TOTAL PUBLIC SERVICE (Net) | 2,134 | 114 | 284 | 293 | 2,262 | 108 | 200 | 304 | 2,422 | 116 | 200 | 325 | | | | | | | | | | | | *Expenses covered in part from revenues of activity | | | | | | | | | | | | [[/13-column table]]

-65- Source and Application of Operating Funds - FY 1977 - FY 1979 Excluding Foreign Currency, Construction & Plant Funds p. 5 Of 7 ($1,000s) [[13-column table]] [[header]] | [[span 4 columns]]FY 1977 PROJECTED[[/span 4 columns]] | [[span 4 columns]]FY 1978 BUDGET[[/span 4 columns]] | [[span 4 columns]]FY 1979 ESTIMATED[[/span 4 columns]] | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | | Unrest. | Rest. | | | Unrest. | Rest. | | | Unrest. | Rest. | [[/header]] [[underline]]MUSEUM PROGRAMS[[/underline]] | | | | | | | | | | | | Assistant Secretary | 291 | 2 | - | (3) | 206 | 4 | - | - | 207 | 9 | - | - Office of Museum Programs | 269 | 27 | 3 | - | 286 | 26 | - | - | 302 | 16 | - | - Office of Horticulture | 593 | 12 | - | - | 628 | - | - | - | 692 | - | - | - South Building Group | 609 | (2) | - | - | 659 | 5 | - | - | 623 | 5 | - | - Office of the Registrar | 94 | - | - | - | 96 | - | - | - | 99 | - | - | - Conservation-Analytical Lab. | 559 | - | - | - | 627 | 2 | - | - | 638 | 1 | - | - Smith. Institution Libraries | 2,052 | 132 | - | - | 2,145 | 150 | - | - | 2,353 | 161 | - | - Office of Exhibits Central | 1,058 | 1 | - | - | 1,072 | 9 | - | - | 1,039 | 5 | - | - Traveling Exhibition Svc. | 104 | 477* | - | 211 | 156 | 490* | - | 236 | 159 | 550* | - | 225 Smithsonian Archives | 247 | 6 | - | - | 272 | 22 | - | - | 279 | 25 | - | - National Museum Act | 792 | - | - | - | 790 | - | - | - | 791 | - | - | - [[line across page]] TOTAL MUSEUM PROGRAMS | 6,668 | 655 | 3 | 208 | 6,937 | 708 | - | 236 | 7,182 | 769 | - | 225 Less expenses of generating revenue | - | (477) | - | - | - | (490) | - | - | - | (550) | - | - [[line across page]] TOTAL MUSEUM PROGRAMS (Net) | 6,668 | 178 | 3 | 208 | 6,937 | 218 | - | 236 | 7,182 | 219 | - | 225 | | | | | | | | | | | | *Expenses covered in part from revenues of activity | | | | | | | | | | | | [[/13-column table]]

-66- Source and Application of Operating Funds - FY 1977 - FY 1979 Excluding Foreign Currency, Construction & Plant Funds p. 6 Of 7 ($1,000s) [[13-column table]] [[header]] | [[span 4 columns]]FY 1977 PROJECTED[[/span 4 columns]] | [[span 4 columns]]FY 1978 BUDGET[[/span 4 columns]] | [[span 4 columns]]FY 1979 ESTIMATED[[/span 4 columns]] | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | | Unrest. | Rest. | | | Unrest. | Rest. | | | Unrest. | Rest. | [[/header]] [[underline]]OTHER ACTIVITIES[[/underline]] | | | | | | | | | | | | Associates--National | - | 2,548* | - | - | - | 2,980* | - | - | - | 3,200* | - | - --Magazine | - | 17,900* | - | - | - | 21,844* | - | - | - | 25,600* | - | - --Resident | - | 1,426* | - | - | - | 1,696* | - | - | - | 1,850* | - | - --Foreign Study Tours | - | 1,343* | - | - | - | 768* | - | - | - | 1,500* | - | - Business Mgmt--Museum Shops | - | 5,131 | - | - | - | 5,594* | - | - | - | 5,900* | - | - --Mail Order | - | 888* | - | - | - | 1,747* | - | - | - | 2,100* | - | - --Belmont | - | 260* | - | - | - | 270* | - | - | - | 280* | - | - --Other Business Mgmt. | - | 206* | - | - | - | 286* | - | - | - | 335* | - | - Popular Book Publishing | - | 200* | - | - | - | 1,432* | - | - | - | 800* | - | - Allotment for Research, Collections Acquisition, and Public Outreach | - | - | - | - | - | 2,080 | - | - | - | 2,000 | - | - [[line across page]] TOTAL OTHER ACTIVITIES | - | 29,902 | - | - | - | 38,697 | - | - | - | 43,565 | - | - Less expenses of generating revenue | - | (29,902) | - | - | - | (36,615) | - | - | - | (41,565) | - | - [[line across page]] TOTAL OTHER ACTIVITIES (Net) | - | - | - | - | - | 2,082 | - | - | - | 2,000 | - | - | | | | | | | | | | | | *Expenses covered all or in part from revenues of activity | | | | | | | | | | | | [[/13-column table]]

-67- Source and Application of Operating Funds - FY 1977 - FY 1979 Excluding Foreign Currency, Construction & Plant Funds p. 7 Of 7 ($1,000s) [[13-column table]] [[header]] | [[span 4 columns]]FY 1977 PROJECTED[[/span 4 columns]] | [[span 4 columns]]FY 1978 BUDGET[[/span 4 columns]] | [[span 4 columns]]FY 1979 ESTIMATED[[/span 4 columns]] | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | Federal Funds | [[span 2 columns]]Trust Funds[[/span 2 columns]] | Fed.Ag. Gr. & Contrs. | | Unrest. | Rest. | | | Unrest. | Rest. | | | Unrest. | Rest. | [[/header]] [[underline]]SUPPORT ACTIVITIES[[/underline]] | 22,159 | 335* | 25 | - | 22,594 | 789* | 25 | - | 23,375 | 836* | 25 | - Less expenses of generating revenue [[underline]]| - | (126) | - | - | - | (353) | - | - | - | (395) | - | -[[/underline]] Support Activities (Net) | 22,159 | 209 | 25 | - | 22,594 | 436 | 25 | - | 23,375 | 441 | 25 | - [[underline]]ADMINISTRATION[[/underline]] | 5,539 | 3,281 | 150 | 114 | 5,910 | 4,009 | 150 | 100 | 6,159 | 4,670 | 150 | 100 Overhead Recovery [[underline]]| - | (3,033) | - | - | - | (3,700) | - | - | - | (4,200) | - | -[[/underline]] Administration (Net) | 5,539 | 248 | 150 | 114 | 5,910 | 309 | 150 | 100 | 6,159 | 470 | 150 | 100 [[underline]]TRANSFERS (IN)/OUT[[/underline]] [[underline]]| - | 5,955 | (63) | - | - | 4,695 | 225 | - | - | 4,250 | 225 | -[[/underline]] [[underline]]GRAND TOTAL APPLIED[[/underline]] [[double-underline]]| 85,236 | 7,759 | 5,242 | 11,000 | 88,238 | 9,175 | 5,025 | 11,400 | 92,648 | 8,800 | 5,025 | 11,500 | | | | | | | | | | | | FUND BALANCE - Beginning of Year | - | 6,562 | 3,984 | 101 | - | 9,254 | 3,917 | - | - | 11,065 | 3,935 | - Change in Fund Balance | - | 2,692 | (67) | (101) | - | 1,811 | 18 | - | - | 2,125 | 25 | - FUND BALANCE - End of Year | - | 9,254 | 3,917 | - | - | 11,065 | 3,935 | - | - | 13,190 | 3,960 | - [[line across page]] | | | | | | | | | | | | *Expenses covered all or in part from revenues of activity. | | | | | | | | | | | | [[/13-column table]]

-68- [[underlined]] Bequest of Dr. Atherton Seidell [[/underlined]] Mr. Ripley reported that a testamentary trust benefiting the Smithsonian Institution was established by Dr. Atherton Seidell on his death in July, 1961. In his will Dr. Seidell provided that his niece, Miss Elizabeth Medinger, was to receive $8,000 per year from this trust's income, with any excess income, as well as the principal at her death, to be transferred to the Smithsonian for the purpose of "making the published results of scientific research more widely available to those able to use them for the advancement of science." Acting Secretary Remington Kellogg, with the authority of the Chairman of the Executive Committee of the Regents, accepted this bequest on July 12, 1962, and the full Board of Regents was informed of the bequest at the May, 1963 meeting. The trust assets now consist of an apartment building at 2301 Connecticut Avenue, N. W., which has been managed by a real estate agent under the supervision of the Trustee, Union Trust Company; due to maintenance and improvement costs, the annual payment to Miss Medinger, and the additional requirement that she be furnished an apartment at no cost, the Smithsonian has not received any income from this trust. On August 20, 1977, Miss Medinger died, and Union Trust Company must now transfer title to the Smithsonian. The building has twenty-seven units, the majority of which are large two-bedroom apartments; the manager of the property has indicated that it is in sound condition, with no immediate major expenses expected. Two appraisals, made over five years ago, set the market

-69- value of the property at $325-$350,000; an appraisal of the current market value will be obtained shortly, but it is expected that the property is now worth a minimum of $450,000. There is an indebtedness of $38,500 on the building, accumulated in recent years since rental income has not always been sufficient to cover operating costs, payments to Miss Medinger, and necessary facilities improvements. A 10% rent increase, applied for last February, has recently been approved by the District of Columbia Rental Accommodations Office for this building, and the net income in 1978 (barring unforeseen expenses) projected to be $15,000, or 3% of the building's estimated value. Under current conditions, continued management and rental of the property by the Smithsonian does not appear to provide satisfactory return on the asset and is beyond the Institution's normal scope of operations. There does appear, however, to be a ready market for sale of the building. Under the trust, sale was not permitted during Miss Medinger's lifetime, so as not to disturb the use of her apartment. With the termination of the trust, however, this condition no longer prevails. It can be expected that a buyer would probably convert the building to condominiums, as has been the case with numerous larger apartment buildings in the immediate area; the rental agent has informed the Smithsonian that several tenants in this apartment house have indicated a desire to purchase, should a conversion occur (tenants by law have the right of first refusal on the apartments they occupy).

-70- In order to carry out the purposes of Dr. Seidell's bequest to the Institution, the Regents are now requested to authorize the Secretary to dispose of the apartment house. Guidance on sale of this building will be sought from professionals in this field, and it is proposed that the final transaction be subject to approval of the Chairman of the Executive Committee of the Board of Regents. The following motion was approved: VOTED that the Board of Regents authorize the Secretary to negotiate sale of the apartment building at 2301 Connecticut Avenue, N.W., and to sell said property subject to approval by the Chairman of the Executive Committee of the Board of Regents.

-71- [[underlined]] Chase Manhattan Bank Money Collection [[/underlined]] Mr. Ripley advised the Regents that the Chase Manhattan Bank money collection is one of the finest in the United States, with many strengths in areas where the Smithsonian's numismatic collections are not complete. Numbering over 100,000 items and conservatively appraised at $1.1 million, the Chase collection is about to be offered formally to the Smithsonian as a direct result of conversations between David Rockefeller and Mr. Ripley. A proposed Agreement was negotiated by respective staff members and will be submitted to the Bank's Board of Directors at its October meeting. In brief, the Agreement calls for delivery of the entire collection (save for a few items the Bank desires to give to the American Numismatics Society) with an undivided 10% ownership therein transferring immediately to the Smithsonian. The remaining 90% would be placed on loan with the Smithsonian for a period not to exceed 10 years. The Bank will stipulate in the Agreement that its clear intention is to transfer this remainder before the expiration of the 10 year period; however, if the Bank's financial position does not improve sufficiently for it to utilize the tax write-off that such a further transfer would represent, a minimum of an additional 15% of the collection would in any event be

-72- transferred at the close of the loan period. In such a case we would have the right to choose which pieces from the collection to keep. In sum, we would be guaranteed a minimum of 25% of the collection with good assurance and strong expectations of receiving the entire amount. For our part, the Smithsonian would agree to mount an exhibit of the most important items from the collection and co-sponsor a reception at the National Museum of History and Technology in recognition of the gift. The estimated costs to the Smithsonian of these responsibilities are $25,0000 and $1,500, respectively as funded by the Museum's available Federal exhibits budget and Trust fund special events budget. In addition we would insure the Bank's remaining interest in the collection for the duration of the loan at an annual cost of less than $2,000 as financed by the Museum's normal Federal fund allotment available for insurance costs. For its part, the Bank would be responsible for transporting the collection and, in addition to co-sponsoring the reception, would pay half the costs of an appraisal of the collection should that prove necessary. The Smithsonian's share of such an appraisal would be financed as necessary from unrestricted Trust funds. A copy of the proposed agreement to be voted upon by the Chase Manhattan Bank's Board of Directors is attached.

-73- The following recommended motion was approved: VOTED that the Board of Regents approves the terms of the proposed agreement with the Chase Manhattan Bank and authorizes the Secretary to execute this agreement on behalf of the Smithsonian.

-74- AGREEMENT OF CHASE-SMITHSONIAN DONATION AND LOAN This agreement of donation and loan by and between The Chase Manhattan Bank, N.A. (the Bank), a national banking association with offices at One Chase Manhattan Plaza, New York, New York, and The Smithsonian Institution (the Institution), an establishment created by Act of Congress, with offices at One Thousand Jefferson Drive, S.W., Washington, D.C. witnesseth: 1. The Bank is the owner of a collection of money, coins and other numismatic items, and related library, comprising "The Chase Manhattan Bank Money Collection" (the Collection) more particularly described in schedule 1 annexed hereto. 2. By this Agreement, the Bank does hereby give to the Institution, by way of an absolute gift, an undivided ten percent (10%) interest in and to the Collection. The Institution shall hold such undivided interest subject to the terms and provisions of this Agreement. Upon the execution of this Agreement, the ownership of the Collection shall be as follows: An undivided ninety percent (90%) interest in the Bank, and An undivided ten percent (10%) interest in the Institution.

-75- 3. By this agreement, the Bank does hereby place its undivided ninety percent (90%) interest in the Collection on loan (the Loan) with the Institution for a period of 10 years. 4. It is the expressed intention of the Bank, as witnessed by Resolution of the Executive Committee of its Board of Directors, a copy of which is annexed hereto, to give to the Institution its remaining ninety percent (90%) interest in the Collection by the end of this loan period; however, the Institution recognizes that the Bank shall be under no legal obligation to do so. 5. Should the Bank not give to the Institution its complete remaining ninety percent (90%) interest in the Collection by the end of this loan period, the Collection will be valued by an independent appraiser selected by mutual agreement of the Bank and the Institution (and the fees of which shall be shared equally by the Bank and the Institution) after which the Institution, in its sole discretion will select certain of the items in the Collection, the appraised value of which will correspond to twenty-five (25%) of the total appraised value of the items in the Collection included in this Agreement (or a higher percentage if previously given by the Bank to the Institution). - more -

-76- By appropriate agreements and transfers, the Institution will obtain all right, title and interest in the items from the Collection it has selected; the Bank will obtain all right, title and interest in the items from the Collection that the Institution has not selected, which items will be returned to the Bank. 6. During the term of the Loan, and while the Collection is in transit to and from the Institution, the Institution will procure insurance coverage for the Collection, in the full fair market value of the Collection, satisfactory to the Bank. The Bank will be named as co-insured. The Institution has received a copy of the June 5, 1975 appraisal of Harmer Rooke Numismatists Ltd. appraising the fair market value of the items in the Collection to be included in this Agreement at One Million One Hundred Sixty-Seven Thousand Five Hundred and Seventy Five Dollars ($1,167,575). For insurance purposes, the Institution may rely on this appraisal; however, the Bank reserves the right to conduct other appraisals, in which event the latest such appraisal will be relied on for insurance purposes. The Institution will furnish the Bank with insurance certificates to establish compliance with the foregoing requirements. 7. The delivery of the Collection to the Institution in Washington, D. C., upon the commencement of the Loan, and - more -

-77- the return of that portion of the Collection that is deemed to be the property of the Bank to the Bank in New York City upon the termination of the Loan (should paragraph 5 become operative), shall be made in such manner as shall be mutually agreeable to the parties. The expenses of such delivery and return (but for transit insurance coverage) shall be borne by the Bank. 8. Within one year of the commencement of the Loan, the Institution will mount a special exhibition of those objects in the Collection which it determines to be of significant interest. For all museum purposes (registrar entries, catalogue notations, exhibit labels, etc.), all objects in the Collection (whether donated or on loan) will be described as from "THE CHASE MANHATTAN BANK MONEY COLLECTION." 9. During the loan period, the Institution will not repair, restore or otherwise alter the Collection without the prior written consent of the Bank. 10. At the commencement of the special exhibition described in paragraph 8, the Institution and the Bank will co-sponsor an exhibition opening reception. The Bank and the Institution will have the right to invite guests as deemed appropriate to this reception, and all costs of this reception shall be shared by the Bank and the Institution. - more -

-78- The Special Events Office of the Institution will cooperate with the Bank in all aspects of the reception, which will be conducted in accordance with customary Institution practices. 11. It is the express hope of the Bank that should the Institution determine items in the Collection to be duplications of items already in the Institution's possession and that the Institution does not plan to display, the Institution would then make those duplicate items available to The American Numismatic Society, an association headquartered at Broadway and 155th Street, New York, N.Y. IN WITNESS WHEREOF, the parties, by their duly authorized officers, have hereunto set their hand and seal this [[line for day of month]] day of [[line for month]] 1977. THE CHASE MANHATTAN BANK, N.A. By: [[signature line]] Attest: [[signature line]] (SEAL) SMITHSONIAN INSTITUTION By: [[signature line]] Attest: [[signature line]] (SEAL)

-79- [[underlined]] Publishing General-Interest Books [[/underlined]] Mr. Ripley stated that at the May meeting of the Board of Regents it was reported that the feasibility study for publishing a Smithsonian book had shown very favorable prospects for a large format, highly illustrated book on Smithsonian activities. The Executive Committee asked the task group to proceed with editorial and marketing work, with a view to publication in the fall of 1977. A small test mailing of questionnaires to sample reading habits and subject preferences of the National Associates was followed by a limited mailing in January, 1977, testing the titles of several possible general-interest books to determine the feasibility of such a volume for a Smithsonian publishing venture. A book of this sort would be based on areas of interest to the Smithsonian, published by the Smithsonian under its editorial and aesthetic control, and aimed at a broad adult market which might be expected to welcome such books, primarily the National Associates. The market would be reached basically through the [[underlined]] Smithsonian [[/underlined]] magazine's mailing list, at a reduced cost per book to increase their attraction, and through limited sales in the Museum Shops and general book stores. The most successful of these books in the test mailing was one on the Smithsonian itself, now titled [[underlined]] The Smithsonian Experience.[[/underlined]] The book was tested again in June, in a mailing of promotional

-80- material to a much larger sample of the Associates, some 40,000. The startling success of this test--analysed for us by William H. Kelty, an expert consultant--indicated that 12% of the Associates would buy such a volume. Consequently, the decision was made to proceed with this publication. The book went to the printer, Rand-McNally, on September 16, with first delivery scheduled for September 30. The final promotional mailing to the entire Associates list--some 1.7 million--was made September 6. If the results are accurately predicted by the June test, sales should be in excess of 200,000 copies from this first mailing. A second mailing will be made to the Associates in January or February 1978, to those who had not already ordered the book and to new Associates. Our marketing consultant estimates a favorable return of 5%. A third mailing will go out also early in 1978, this time to other mailing lists similar in composition--income, education, etc.--to the Associates' list, and pretested. The favorable return on this is estimated to be 3.5%. The total net return from the three mailings, after all costs, is estimated at a minimum of $1,000,000 and could substantially exceed that figure. This figure is based on the following budget forecast which is projected on [[underlined]] minimum [[/underlined]] figures. In addition, the book will be sold in our Shops and to the retail trade by W. W. Norton Company to produce additional income.

-81- SMITHSONIAN INSTITUTION PUBLISHING TASK FORCE ($1,000's) BUDGET FORECAST* [[table -- 4 columns]] | [[underline]]FY 1977[[/underline]] | [[underline]]FY 1978[[/underline]] | [[underline]]FY 1979[[/underline]] Revenue | $ - | $2,432 | $1,300 Cost of sales | [[underline]]-[[/underline]] | [[underline]]1,026[[/underline]] | [[underline]]425[[/underline]] Gross profit | $ - | $1,406 | $ 875 Operating Costs** | [[underline]]200[[/underline]] | [[underline]]406[[/underline]] | [[underline]]375[[/underline]] Net Gain (Loss) | [[double underline]]$ (200)[[/double underline]] | [[double underline]]$1,000[[/double underline]] | [[double underline]]$ 500[[/double underline]] [[line]] End of Year Inventory (at cost) | [[double underline]]$ 425[[/double underline]] | [[double underline]]$ 425[[/double underline]] | [[double underline]]$ 300[[/double underline]] [[/table]] * Projected [[underline]]minimum[[/underline]] figures. ** FY 1977 - $70M through 6/30/77 for feasibility study; $130M for commencement of production and direct mail test. FY 1978 & 1979 - Production management; additional testing; publication of second book.

-82- Mr. Ripley recalled that at the Executive Committee meeting some concern was expressed that such a program might involve us in a money-making enterprise which could be viewed as competition by commercial publishing firms. The point at issue is, should the Smithsonian publish its own book or should it contract with a publishing firm to do it for us? In a discussion with James Page, the project director, Mr. Ripley found that in 1976, as part of our research into the feasibility of publishing general-interest books, Mr. Page met with Richard Schmidt, an attorney with the Washington law firm of Cohn and Marks. Schmidt represents the American Association of Publishers. He said he thought the Institution was ideally positioned to enter this kind of publishing. If, Mr. Schmidt said, the Institution produced and distributed books only for its own people (Associates and visitors) the publishing industry might find reason to object, as they do every so often about the case of, for example, the National Geographic Society. However, if we selected a publisher to distribute our books to general bookstores, the industry would feel that "it had a piece of the action," and therefore could not and would not complain no matter how large the program became. Consequently, we offered this book to a number of publishers who were publishing similar books and, after a number of turndowns, W. W. Norton of New York agreed to act as our trade distributor for [[underline]]The Smithsonian Experience[[/underline]]. By doing so we have circumvented potential criticism

-83- by people who might lobby Congressional members and others to say we were exclusively publishing a book. We have also discussed eventual distribution by other [[underlined]] direct mail [[/underlined]] publishers to their lists. Book-of-the-Month Club and Readers' Digest have expressed interest. The books we plan to publish are of a peculiarly Smithsonian nature, books that other organizations would be unlikely to be able to bring off. On the subject of unrelated business taxes, Suzanne Murphy of the General Council's office advises that books relating generally to Smithsonian activities are among the least likely of institutional outreach enterprises to be considered unrelated business. This does not mean that such taxes are out of the question. However, publishing books about Smithsonian knowledge in whatever quantity certainly can be construed as "diffusion of knowledge." The matter of "unseemly" profits from such an activity hardly seems a problem. If this program were successful, it would be perfectly possible to designate percentages of its overage to be used to subsidize less financially interesting but otherwise needed publications or programs. Or, excess earnings from this program could be used to capitalize other publishing efforts that might one day break even. Why not a [[underlined]] Folklife Quarterly, [[/underlined]] a new attempt at a [[underlined]] Technology Quarterly [[/underlined]] and other outlets for scholarly efforts at the Smithsonian? The SI Press could benefit from such earnings as could non-publishing efforts such as intern programs, scholarships and the like.

-84- The marketing experience to date and projections for the future of this book encourage us to move further into the field of publishing general-interest books. (These are distinguished from the special-interest, scholarly publications being offered by the Smithsonian Press.) Although we will be aiming at a broad adult market, that market, since it will primarily be the National Associates and similar mailing lists, can be expected to be interested in the Smithsonian and the subjects which interest us. General-interest books to be published by the Institution will be concerned with subjects in which the Smithsonian is active. Some writers may be engaged from outside the Institution, but most of the writing and the final editing as to accuracy and style will be done in-house. Although we could enter into a co-publishing arrangement with an outside publisher in order to reduce our financial risk, this would seriously reduce our control and our potential financial return. As had been done last January, a very small sample mailing test was conducted last month to test seven titles as candidates for the successor to [[underline]]Experience[[/underline]]. Three of the seven appear to have strong potential: [[underline]]The Smithsonian Book of Invention,[[/underline]] [[underline]]The Smithsonian Book of Time[[/underline]] (possibly retitled [[underline]]Time - The Fourth Dimension[[/underline]]), and [[underline]]Art of the American Landscape[[/underline]]. It is therefore planned to pick one of these, with the concurrence of the Board of Regents, in the next few weeks for an extensive

-85- promotional test early next year. If that test--again by mailing to the Associates--succeeds as we expect, a mailing to the full Associates' list will be made in the fall of 1978. We anticipate conservatively that sales of the second book would be somewhat smaller than [[underlined]] The Smithsonian Experience [[/underlined]] because of the latter's particular attraction to a Smithsonian audience. A second mailing to Associates will be made early in 1979, and another mailing will go out to other mailing lists at the same time, after they are tested. Total net returns for the second book should again be about $1,000,000. Finally, we are beginning to explore the possibility of developing an informative children's book series about areas of Smithsonian interest. This, however, is still very much in the research stage, and will remain so for several more months. These efforts have been undertaken and will continue to be the responsibility of a small but expert staff with extensive experience in book publishing. It was proposed that based on the encouraging marketing estimates received to date, and in accordance with the directive of the Executive Committee to proceed with editorial and marketing work, with a view to publication in the fall of 1977, that the following motion be approved, and it was VOTED that the Board of Regents ratifies the actions taken in accordance with the directive of the Executive Committee on [[underlined]] The Smithsonian [[/underlined]]

-86- [[underline]]Experience[[/underline]], the first book; and authorizes the Secretary to proceed with this program bearing in mind the value of this program to the mission of the Smithsonian, with awareness of the interests and participation, where appropriate, by the Board of Regents and the commercial publishing industry.

-87- [[underlined]] Funds for Research [[/underlined]] Dr. Gell-Mann raised the question of support of scientists who previously received their support from the research awards program but who cannot be funded from this source during fiscal year 1978. He understood that it might be possible for Smithsonian scientists to compete with their peers throughout the country in applying for research grants to the National Science Foundation and other government grantors. He questioned whether specific legislation was necessary to allow Smithsonian scientists to do this or whether only Congressional approval was needed because of the deadlines of the NSF for the submission of grants. Dr. Challinor explained that we have raised the question as to whether the Smithsonian, having heretofore been precluded from requesting NSF grants to federally employed scientists, might resume seeking funds for such research from NSF. During fiscal year 1978 there are no appropriated funds available for new research proposals, which should remove the objection that Congress is funding our research. For fiscal year 1978, then, we propose to ask Congress for permission to go to NSF for such funding as one alternative to replace this loss of research support. We do not think this will require new legislation but simply the concurrence or permission of the appropriate committees.

-88- STATUS REPORT ON LEGISLATION [[underlined]] Barro Colorado Island [[/underlined]] Furthering activity on H.R. 3348, the measure to raise the authorized level of appropriations for the BCI facility, is unlikely until Congressional action on the Panama Canal treaty has been completed. [[underlined]] Hirshhorn Museum Film [[/underlined]] The State Department authorization bill, H.R. 6689, included an amendment to make the film produced by USIA about the Hirshhorn Museum available in the United States. The measure was approved by the President on August 17. [[underlined]] Museum Support Center [[/underlined]] H.R. 6086, a bill to authrize construction of the Museum Support Center at Suitland, Maryland, will be the subject of hearings in October by the Subcommittee on Public Buildings and Grounds of the House Committee on Public Works and Transportation. Senate action is anticipated after the House has completed consideration of the measure.

-89- [[table - 2 columns]] BILL AND AUTHOR | S.1847 (Senator Metcalf of Montana) TITLE | To improve the operation and extend the scope of the Federal Advisory Committee Act COMMITTEE REQUESTING REPORT AND DATE | Senate Committee on Governmental Affairs, July 18, 1977 SUMMARY OF LEGISLATION | The bill would amend P.L. 92-463, the Federal Advisory Committee Act, by bringing the Smithsonian Institution and several legislative branch entities within its purview. In addition, it provides for the annual publication of a comprehensive listing of all advisory committee members and their affiliations; for methods of selection and appointment of advisory committee members, including the public solicitation of nominees and the justification for selection; an expanded congressional reporting system, including a description of the appointment process and conditions of tenure; requirements for meetings closed to the public; and for civil penalties and district court jurisdiction on complaints arising under the Act. DISCUSSION | The bill is successor to one offered for generally similar purposes in the 94th Congress on which hearings were held last year. The earlier versions did not include the Smithsonian within the Act's coverage. Hearings on S.1847 are scheduled for September 27 and 29. The Administration is not opposed to those amendments related to the administration of the Act, but it does not favor the inclusion of entities outside the Executive branch. [[/table]]

-90- [[table - 2 columns]] | There are some anomalies in the proposed language that may negate the intended purpose. The definition of "agency" appears, in fact, to exclude the Smithsonian and the legislative branch organizations. Furthermore, the Smithsonian's boards and commissions do not advise the President, agencies, or officers of the Federal Government, which is a key function of the committees under the Act. Smithsonian boards and commissions exist to advise the Board of Regents and the Secretary with respect to museum-related functions such as collections, acquisitions, and exhibitions. | A companion measure, H.R. 8979 has been introduced in the House by Messrs. Preyer and McCloskey. No action has been scheduled on it. RECOMMENDATION | It is respectfully recommended that, inasmuch as the boards and commissions of the Smithsonian Institution are constituted to provide advice to the Board of Regents rather than to the President, agencies, and other officers of the Federal Government, and that the Smithsonian is not by definition included in the coverage of the Federal Advisory Committee Act, that the Regents direct the Secretary to request elimination of reference to the Institution in the language of S.1847. [[/table]] The Regents approved the above recommendation and authorized the Secretary to seek elimination of the reference to the Institution.

-91- [[underlined]]Proposed Award of the Hodgkins Medal to Professor Alexander Dalgarno[[/underlined]] The Hodgkins Medal, established in 1893 in memory of Thomas George Hodgkins who willed his fortune to the Smithsonian, is awarded "for important contributions to the knowledge of the physical environment bearing upon the welfare of man." Recipients have been: James Dewar, Royal Institution, London, 1899 J.J. Thompson, University of Cambridge, England, 1902 Sydney Chapman, University of Alaska, 1965 Marcel Nicolet, Centre Nationale de Recherche de l'Espace, Brussels, Belgium, 1965 Joseph Kaplan, University of California at Berkeley, 1965 John Grahame Douglas Clark, University of Cambridge, England, 1967 Fritz W. Went, University of Nevada Desert Research Institute, 1967 Jule Gregory Charney, Massachusetts Institute of Technology, 1969 Arie Haagen-Smith, California Institute of Technology, 1969 Lewis Mumford, Edinburgh University, University of Rome, 1971 Walter Orr Robers, Harvard University, 1973 E. Cuyler Hammond, 1976 The nominiation of Professor Alexander Dalgarno for the Hodgkins Medal was presented by the Director of the Smithsonian Astrophysical Observatory, Dr. George Field. Professor Alexander Dalgarno was born in 1928 in the United Kingdom and received his Ph.D. from University College London in 1951. Before coming to Cambridge, he was Assistant Lecturer at

-92- the Queen’s University of Belfast. He later became Professor of Quantum Mechanics and the Director of the Computation Center there. In 1967, he received a joint Harvard-Smithsonian appointment as Professor of Astronomy at Harvard and as physicist at the Smithsonian Astrophysical Observatory. In 1971, he was appointed Acting Director of the Harvard College Observatory and also Chairman of Harvard’s Department of Astronomy, serving as such until 1973 and 1976 respectively. He is currently also Associate Director for Theoretical Astrophysics at SAO. He is the Editor of [[underlined]]The Astrophysical Journal (Letters)[[/underlined]] and a member of the Evaluation Panel, Joint Institute for Laboratory Astrophysics (JILA) at the University of Colorado. He is also a Fellow of the Royal Society, the Physical Society (of London), the American Academy of Arts and Sciences, a member of the American Astronomical Society, the American Geophysical Union, and member of the International Academy of Astronautics. Professor Dalgarno is one of the pioneers in the theory of the upper atmosphere. Professor Dalgarno’s interest in atmospheric physics has extended from 1953, when he published a paper with D.R. Bates, entitled “Altitude of the Luminous Layers in the Earth’s Atmosphere,” up to the present, with his interest in the discoveries of the

-93- Atmospheric Explorer Satellites on earth and the Viking missions to Mars. His main contribution has been in developing a quantitative understanding of planetary ionospheres in terms of basic physical and chemical processes, and identifying processes which need to be included as improved atmospheric and laboratory data become available. The list of problems to which he has made significant contributions is long and varied, including diffusion coefficients, ion-molecule reactions, charge-transfer cross sections, photoionization cross sections, the production of metastable ions, ultraviolet fluorescence, day and night glow, aerosol emissions, twilight phenomena, the absorption of electrons in gases, electron and ion temperatures, thermal conduction electron heating and cooling mechanisms, and the role of vibrationally excited molecules in planetary atmospheres. The Board adopted the following motion: VOTED that the Board of Regents awards the Hodgkins Medal to Alexander Dalgarno in recognition of his important contributions in the field of atmospheric physics.

-94- [[underlined]] Regents Search Committee for Citizen Regent [[/underlined]] Dr. Haskins, Chairman of the Search Committee for a citizen Regent, reported that he would have a proposed slate for consideration at the January 1978 meeting of the Board of Regents. His committee consists of Mrs. Boggs and Senator Goldwater. Suggested additional names for consideration by this committee should be sent to any of the above members. [[underlined]] Museum of African Art [[/underlined]] The [[underlined]] ad hoc [[/underlined]] committee of the Board of Regents deferred further action on this subject pending completion of Mr. Hughes' study and the report of Senator Jackson's Audit Committee. Informal discussions have continued between the staffs of the Smithsonian and the Museum of African Art, and this subject will be mentioned at our oversight hearings in the House on October 3 and 4.

-95- [[underlined]] Folklife Festival [[/underlined]] The Institution's 11th annual Festival of American Folklife will be held from October 5 through 10, over the Columbus Day holiday weekend. It will take place in and around the National Museum of History and Technology, the National Museum of Natural History, the Renwick Gallery, and on the northeast portion of the Washington Monument grounds. As in previous years the Festival will feature entertaining and educational activities pertaining to traditional American folkways in music, dance, crafts and food. This year, however, a principal objective is to relate these activities more closely to museum exhibits and with the research interests and specialties of the museums' professional staffs. Another related objective, made possible by the change in calendar for the Festival from July to October, is the organized involvement of public school groups as coordinated by the Smithsonian's Office of Elementary and Secondary Education. Principal components of this year's Festival include a demonstration of food processing machinery and techniques from pre-colonial times to the present. Funded by the Energy Research and Development Administration, its purpose will be to demonstrate the different types and amounts of energy required to convert produce to table-ready food.

-96- Other major presentations will be Black American "street culture," demonstrations and live presentations within the "Nation of Nations" Bicentennial exhibition, family folklore research techniques, lecture-demonstrations on the music of native Americans and others, presentations on the folkways of the State of Virginia, and a short orientation film together with a question and answer period as a central introduction to these diverse activities. Initial planning has already begun for a 1978 Festival, which will likely adopt and build upon the strong points in this year's revised format.

-97- [[underlined]]OFFICE OF TELECOMMUNICATIONS[[/underlined]] In its first full year as a separate unit, the Office of Telecommunications, as the responsible division for all Smithsonian activities in television, radio and films, moved forward on a number of projects. The Office developed and produced a new official film overview of the Smithsonian with Secretary Ripley as the host/narrator, and completed, in the role of co-producer, a film dealing with the National Museum of Natural History with Orson Welles as narrator. Also, the Office assisted in the production of a CBS-TV network special on the Pyramids and negotiated rebroadcast of the popular Smithsonian Special of the previous year, "Monsters! Mysteries or Myths?", for the NBC-TV network. Two major projects designed for public television progressed to the point where one of them, a new version of "What in the World" moved into the videotape pilot phase and the other, "Smithsonian World," a monthly television magazine, is in the stage of seeking an underwriter. Among other activities, the Office produced a new 30-second television public service announcement patterned after last year's prize-winning Bicentennial "spots" for nationwide distribution; filmed and recorded for archival purposes many Smithsonian events; and fulfilled numerous requests from television, film and radio producers for assistance with coverage of happenings throughout the Institution. "Radio Smithsonian," the Institution's national weekly radio program, continued its growth with a revised, expanded format, at the same time increasing its coverage to more than 50 stations.

-98- LITIGATION REPORT [[underlined]] New Cases [[/underlined]] 1. [[underlined]] Disposition of Old Woman Mountains Meteorite [[/underlined]] In 1976, a 6,000-pound meteorite was located by private individuals on federal land in the Old Woman Mountains of Southern California. The land is under the control of the Bureau of Land Management, Department of the Interior. At the request of the Smithsonian, custody and control of the specimen was transferred to the Institution, and it was accessioned into the national collections. The Smithsonian arranged for the Marine Corps to remove the meteorite by helicopter from its site in June 1977. At that time a suit to obtain legal title to the specimen was filed by the finders, but that suit has now been dismissed with prejudice by the Federal District Court in Los Angeles. At about the same time, the Museum of the County of San Bernardino and the State of California filed separate suits seeking title to the specimen under various theories of law. A temporary restraining order is in effect to keep the meteorite in California, but the judge has not yet rendered a decision on the merits. The Smithsonian Institution and the Department of the Interior are being represented by the Department of Justice. 2. [[underlined] Munger [[/underlined]] v. [[underlined]] United States [[/underlined]] The plaintiff is a minor who was injured in July 1976 while riding the escalator in the National Air and Space Museum. The Smithsonian denied a tort claim filed on behalf of the child because it could not find that the injury was caused by negligence on the part of the Institution. Suit has now been brought in the U.S. District Court against the United States and against the Otis Elevator Company, which manufactured, installed, and serviced the NASM escalators. The Department of Justice is representing the Smithsonian. 3. [[underlined]] United States [[/underlined]] v. [[underlined]] Tougas [[/underlined]] The U.S. Department of Justice has filed a civil action against Charles A. Tougas and Carl Petersen of Tucson, Arizona, to recover the proceeds of sales of federal excess property sold by them in violation of federal statutes. Until 1972 Mr. Tougas was the station manager of the Smithsonian Astrophysical Observatory's facility at Mount Hopkins. He was convicted in an earlier criminal action brought against him and

-99- Mr. Petersen, and served two years in federal prison. Mr. Petersen's conviction was reversed on appeal, but he then pleaded guilty to a lesser offense. In the present civil litigation, Messrs. Tougas and Petersen have filed counterclaims against the Smithsonian Institution and certain, as yet unnamed, individual Smithsonian employees in their respective private capacities, asserting that any illegal conduct on their part was the result of negligence of the Smithsonian and Mr. Tougas' supervisors, and that the proceeds of the sales were used in the construction at Mount Hopkins. Some of the proceeds were used as they assert, but there is no evidence that any Smithsonian management officials were negligent or otherwise responsible for the illegal actions. The Institution and its employees are represented by the Department of Justice. 4. [[underlined]] Bowler [[/underlined]] v. [[underlined]] Ripley [[/underlined]] Plaintiff, formerly an employee in the Protection Division of the Smithsonian, brought suit in the U.S. District Court for the District of Columbia, alleging that his failure to be promoted was a result of racial discrimination, and seeks reinstatement and retroactive promotion, back pay, and adjustments. The Department of Justice is handling the defense of this suit. [[underlined]] Cases Previously Reported [[/underlined]] 1. [[underlined]] Expeditions Unlimited Aquatic Enterprises, Inc. [[/underlined]] v. [[underlined]] Smithsonian Institution [[/underlined]] On September 16, 1977, the U.S. Court of Appeal for the District of Columbia Circuit held unanimously (after rehearsing [[underlined]] en banc [[/underlined]]) that the Smithsonian Institution is immune from suit for libel under the Federal Tort Claims Act and that federal roll employee (Dr. Clifford Evans, Chairman of the Department of Anthropology, National Museum of Natural History, at the time of suit) of the Smithsonian would have absolute immunity from suit if he were acting within the scope of his official duties in making the allegedly libelous statements. The court remanded "the judgment in favor of defendant Evans for limited inquiry whether his letter was within the outer perimeter of his duties." 2. [[underlined]] Winston [[/underlined]] v. [[underlined]] Smithsonian Science Information Exchange [[/underlined]] On September 7, 1977, U.S. District Court Judge John Pratt rendered his decision, finding that plaintiff Winston had failed to make any showing of racial discrimination. Judge Pratt further observed

-100- that the statistical analysis of the entire work force at SSIE was consistent with a "nondiscriminatory, or at least a neutral employment policy." Plaintiff Winston has not yet indicated whether he intends to appeal the decision. [[underlined]] Cases Disposed Of [[/underlined]] 1. [[underlined]] Lacey Act Investigation at the National Zoological Park [[/underlined]] A federal investigation for violation of the Lacey Act (prohibiting the acquiring or receiving of animals improperly or unlawfully exported from their countries or states of origin) and possibly other laws has resulted in criminal indictments of various individuals. No NZP or other Smithsonian personnel were named in the indictments. 2. [[underlined]] Benard [[/underlined]] v. [[underlined]] United States [[/underlined]] The United States was granted summary judgment by the U.S. Court of Claims in this case, which alleged sex discrimination in the administration of the tropical pay differential at STRI. A counterclaim by the United States against a Smithsonian employee/plaintiff for funds owed the United States was settled for $316.73.

-101- [[underlined]] Congratulations to Judge Higginbotham [[underlined]] The Chancellor announced that Judge Higginbotham had moved from the District Court of the United States in Philadelphia and had been appointed to the United States Third Circuit Court of Appeals. He offered his congratulations, as did all the members of the Board. [[underlined]] Gift of the Coca Cola Company to the Smithsonian Institution [[underlined]] Mr. Ripley expressed his appreciation to Paul Austin for his company's generosity in funding the production of a booklet on the Smithsonian Institution. This will be a handsome handout containing basic information on the Smithsonian and will be given to distinguished visitors. [[underlined]] Impact of Panama Canal Treaty on STRI Operations [[underlined]] Mr. Ripley reported that in anticipation of the Panama Canal Treaty, the Smithsonian requested and received from the U.S. Department of State significant assistance in providing for the potential impact of that Treaty on the Smithsonian Tropical Research Institute's operations. Three agreements were drafted by Smithsonian and State Department officials, specifying in detail the future responsibilities of the United States and Panamanian Governments for the

-102- preservation of Barro Colorado Island and the maintenance of STRI's science and research activities. These were signed by United States and Panamanian officials at the signing of the Panama Canal Treaty on September 7, 1977. The combined effect of the three agreements is to allow for the continuation of STRI operations in Panama under circumstances believed to be favorable to the Institution. One of the agreements would declare Barro Colorado Island to be a Nature Monument under the Western Hemisphere Nature Protection and Wildlife Preservation Convention of 1940. A second agreement would designate STRI as the custodian of the Nature Monument for an initial five-year period and for additional five-year periods at the request of STRI. The third agreement confirms and extends the agreement signed last year between STRI and the Government of Panama and provides for the continued exclusive use by STRI of all its present lands and facilities other than Barro Colorado. If the Panama Canal Treaty is ratified, these agreements should permit and assist STRI to continue its scientific programs to the end of the century and probably beyond. [[underlined]] Requests for Opening Regents Meetings to Media [[/underlined]] Mr. Ripley stated that there had been a request from United Press International and U.S. News and World Report to be admitted to this meeting of the Board of Regents. This matter had been discussed at the Executive Committee meeting, and the consensus of the Committee was to have the Secretary brief the press at the conclusion of the meeting.

-103- [[underlined]] Mall Parking [[/underlined]] Mr. Ripley reported that the plan for the construction of visitor parking beneath the Mall continues to be reflected in the Smithsonian's capital improvement program for the next several years. He stated that he had had a favorable reaction to the plan for Mall parking during a visit with Congressman Harold T. (Bizz) Johnson, Chairman of the House Committee on Public Works and Transportation. He had also met with the new Director of the National Park Service, Mr. William Whelan, who has expressed guarded enthusiasm about the project. Mr. Ripley stated that he would continue to keep pushing on this project, aiming at acquiring legislative authority from the Congress as soon as possible. [[underlined]] Suggested Change on Masthead of the Magazine [[/underlined]] The attached proposal for a change to the masthead of [[underlined]] Smithsonian [[/underlined]] has been suggested because the single contents and masthead page was becoming too crowded. These are for style only, and corrections should be made since it has been determined that the introduction to the magazine is not as graceful as it should be. It is planned to publish the two elements on back-to-back pages in the front of an issue. There was no objection to this format.

-104- [[2 columns]] [[column 1]] Secretary of the Smithsonian Institution: S. Dillon Ripley Editor and Publisher: Edward K. Thompson Executive Editor: Ralph Backlund Board of Editors: Don Bronkema, Grace P. Northcross, James K. Page jr., (on leave), Edwards Park, Bennett Schiff, John P. Wiley jr., Richard L. Williams Associate Editors: Marlane A. Liddell, Dana Little, Dee McRae, Jane Scholl, Nancy Seaman Picture Associate: Caroline Despard Assistant Editors: Susan L. Butler, Bonnie Gorden, Joyce McCarten, Donna Reifsnider Associate Publisher: Joseph J. Bonsignore Production: Nannie Shanahan Business: Carey O. Randall Advertising Director: Thomas H. Black Circulation-Promotion Director: Anne Keating [[italics]] Smithsonian [[/italics]] is published monthly by the Smithsonian Associates, 900 Jefferson Drive, Washington, D.C. 20560. [[copyright symbol]]Smithsonian Institution 1977. All rights reserved. Reproduction in whole or in part without permission is prohibited. Subscription price $12 a year in U.S. and possessions. $15.50 elsewhere. Single copy price $1.25. Second-class postage paid at Washington, D.C. Editorial offices, 900 Jefferson Drive, Washington, D.C. 20560. Advertising and circulation offices at 420 Lexington Ave., New York, New York 10017. Please address all subscription correspondence and change of address information to P.O. Box 5300, Greenwich, Conn. 06830 [[/column 1]] [[column 2]] [[italics]] October 1977 [[/italics]] Smithsonian Volume 8, Number 7 [[italics]] Table of Contents [[/italics]] Cover: Beaubourg, France's new cultural center, has an unfinished, transparent look that invites visitors to enjoy its offerings for eye and ear (p. 20) Photograph by Dimitri Kessel 6 The view from the castle: Secretary Ripley's comments 9 Letters to the Editor 14 Phenomena, comment and notes by James K. Page jr. 20 The stunning new national Pompidou center is clearly the rage, literally, and the delight of Paris By Rudolph Chelminski, photographs by Dmitri Kessel 30 A second Coal Age promises to slow our dependence on imported oil, but the rules this time will be different By David Sheridan 38 Expatriate life in decadent Rome: it beats home By Aubrey Menen, photographs by Enrico Ferorelli 44 Roller coaster: king of the park By Robert Cartmell 55 An African village on Capitol Hill By Warren M. Robbins 58 Hold still—don't move a muscle: you're on Mathew Brady's camera! (second of two parts) By Philip B. Kunhardt jr. 68 Admiral Beaufort charted coasts for the world's ships By Alfred Friendly 76 The Woodrow Wilson International Center immerses scholars in a special think tank at the Smithsonian By Edward P. Morgan, photographs by Yoichi Okamoto 85 Waste no pity upon these foxes By James J. Kilpatrick, drawings by Jeff MacNelly 88 Around the Mall and beyond by Edwards Park 92 Picture credits 94 Book reviews 100 Smithsonian tours 101 Additional reading 102 August events at the Smithsonian 104 Cast your car in the pond and reap fish By Mary Hamman [[/column 2]]

-105- Smithsonian Board of Regents, Smithsonian Institution [[italics]] Ex Officio [[/italics]] Chief Justice of the United States Warren E. Burger, Chancellor Vice President of the United States Walter F. Mondale [[italics]] Appointed by the President of the Senate [[/italics]] Honorable Barry M. Goldwater Honorable Henry M. Jackson Honorable Claiborne Pell [[italics]] Appointed by the Speaker of the House [[/italics]] Honorable Elford A. Cederberg Honorable George H. Mahon Honorable Corinne C. (Lindy) Boggs [[italics]] Appointed by Joint Resolution of Congress [[/italics]] Mr. John Paul Austin Dr. John Nicholas Brown Dr. William A. M. Burden Dr. Murray Gell-Mann Dr. Caryl P. Haskins Honorable A. Leon Higginbotham jr. Mr. Thomas J. Watson jr. Mr. James E. Webb National Board of the Smithsonian Associates Hon. George C. McGhee, Chairman, Mr. Robert O. Anderson, Mr. William S. Anderson, Mr. Harry Hood Bassett, Mr. Henry C. Beck jr., Mr. Keith S. Brown, Mr. Richard P. Cooley, Mr. Joseph F. Cullman 3rd, Mr. Thomas M Evans, Hon. Leonard K. Firestone, Mr. Charles T. Fisher III, Mr. Alfred G. Glassell jr., Mrs. David L. Guyer, Mr. Henry J. Heinz II, Mr. William A. Hewitt, Hon. John N. Irwin II, Mr. Lewis A. Lapham, Mrs. Robert A. Magowan, Mrs. Robert S. MacNamara, Mr. Scott McVay, Dr. Ruben F. Mettler, Mr. John R. Norton III, Mrs. Dudley Owen, Mr. Charles M. Pigott, Mr. George S. Pillsbury, Mr. Francis C. Rooney jr., Mr. Merritt Kirk Ruddock, Mr. Authur A. Seeligson jr., Mr. Tomas J. Watson jr., Mr. James O. Wright

-106- [[underlined]] Contemplated Transfer of International Exchange Service Functions [[/underlined]] The Smithsonian's International Exchange Service (IES) is the official U.S. bureau responsible for distributing U.S. Government publications to foreign governments. In return, these governments agree to send IES similar publications for delivery to the Library of Congress. The implementing legislation for this responsibility is contained in 44 U.S.C. 1719. In addition to this statutory responsibility, the IES also distributes scientific and literary publications among learned institutions throughout the world. Recently, the Deputy Librarian of Congress wrote to the Smithsonian Institution suggesting that it would be more efficient if the Government Printing Office distributed the U.S. Government publications that IES disseminates. The Deputy Librarian stated that the GPO Depository Library Program, which already serves some 1,200 domestic libraries, could easily accommodate the addition of 100 foreign addresses to the system. Discussions are now being held with officials of the Library of Congress and GPO to consider this proposal and to work out the details of the possible transfer. At the same time, Smithsonian staff is reviewing the feasibility of discontinuing the distribution by IES of scientific and literary publications among learned institutions. Our review to date has disclosed that the continuation of this service by IES might not be efficient. We have sent a questionnaire to the 200 learned institutions that use the IES to obtain their views on this matter prior to our reaching a position.

-107- A further report will be provided to the Board of Regents at the January 1978 meeting. Should the decision be made to transfer the responsibility for the distribution of the Government publications, legislation deleting the reference to the Smithsonian in 44 U.S.C. 1719 will be proposed.

-108- [[underlined]] PROPOSED ACQUISITION OF U.S. CURRENCY COLLECTION FROM THE U.S. TREASURY [[/underlined]] The U.S. Treasury has one of the world's best collections of U.S. currency which they would now like to transfer to the Smithsonian Institution, subject to the Treasury's continuing right of access to the collection for currency authentication purposes. The face value of the collection is $133,900, but its scarcity and market value far exceeds this figure. There is very little overlap between this currency collection and either our own or the one that we will be acquiring from the Chase Manhattan Bank. It would, therefore, be an extremely desirable acquisition for our National Museum of History and Technology and should serve to give Smithsonian one of the finest numismatic currency collections in the world. Since the currency in this collection is actually an integral part of the Treasury accounts for normal government operations, the Treasury is "financially accountable" for these funds and cannot merely give them away without being reimbursed for their face value or without other measures eliminating the necessity for such payment. Various possibilities for acquisition have been investigated, including merely an indefinite long-term loan, direct or installment purchase by Smithsonian with reprogrammed current or future appropriated funds or trust funds, or special legislation authorizing transfer without payment. After consultation with Congressional Appropriation Sub-committee staffs, including that handling the U.S. Treasury Department appropriation, the simplest and most desirable method currently appears

-109- to be that of including in the latter appropriation special language authorizing transfer of the collection to the Smithsonian. There would, of course, be no cost to the U.S. Government. Thus, it is hoped that the transfer can be accomplished in this way within the fairly near future.

-110- [[underline]] BEQUEST OF GROUCHO MARX [[/underline]] We have been informed by the Executors of the estate of the late Groucho Marx that he has left his "memorabilia" to the Smithsonian. We do not yet know what this collection consists of or whether all or any of it will be of interest to some bureaux of the Institution.

-111- [[underline]] Smithsonian Tax Matter [[/underline]] The Secretary and his staff, in concert with Mr. Webb, Dr. Haskins and outside legal counsel, have been discussing developments concerning the federal tax status of the Smithsonian, primarily relating to whether the Institution is subject to a federal tax which appliees to net revenues from advertising in publications of non-profit organizations. The consensus of the meeting was to continue our efforts to make judicious inquiry as to whether the Institution, as an instrumentality of the United States, is subject to this tax as viewed by the Internal Revenue Service and the Department of the Treasury. The Regents will be kept informed of progress in this matter.

-112- [[preprinted]] NINETY-FIFTH CONGRESS [[line]] LUCIEN N. NEDZI, MICH., CHAIRMAN EDWARD W. PATTISON, N.Y. JOHN BRADEMAS, IND. LEON E. PANETTA, CALIF. JOSEPH S. AMMERMAN, PA. BILL FRENZEL, MINN. DAVE STOCKMAN, MICH. BOB ROYER, COUNSEL 255-0590 COMMITTEE ON HOUSE ADMINISTRATION FRANK THOMPSON, JR., CHAIRMAN Congress of the United States House of Representatives COMMITTEE ON HOUSE ADMINISTRATION SUBCOMMITTEE ON LIBRARIES AND MEMORIALS 2418 RAYBURN HOUSE OFFICE BUILDING Washington, D.C. 20515 [[/preprinted]] September 19, 1977 S. Dillon Ripley, Secretary The Smithsonian Institution 1000 Jefferson Drive Washington, D.C. 20560 Dear Mr. Secretary: As you know, the Subcommittee on Libraries and Memorials and the Government Activities and Transportation Subcommittee of the Committee on Government Operations, in exercise of their oversight responsibilities, have been engaged in a joint review of the Smithsonian Institution's policies and practices. To further aid in that review, a joint hearing has been scheduled for 10:00 A.M. on October 3 and 4, 1977 in Room 2118 of the Rayburn House Office Building. We request that you appear and testify together with any officials you deem appropriate from the Institution. The following topics are of interest to the Subcommittees: the programs, activities, and organization of the Smithsonian Institution, including the Kennedy Center and the National Gallery of Art; statutes pertaining to the Institution, its charter and administration; recent criticisms of the Institution, including those contained in the GAO report of March 31, 1977; the Smithsonian's relationship to the Federal government and its public-private character; and the goals of the Institution, including its plans for growth in programs, collections and support facilities. In accordance with the rules of the Committees and of the House, please submit fifty copies of written statements to the Subcommittee staff 24 hours in advance of the hearing.

-113- September 19, 1977 Page 2 We look forward with pleasure to the appearance of the Smithsonian representatives. If you have any questions concerning the hearing and the subject matter, please contact the Subcommittee staffs. Cordially, [[signature]] J Burton [[/signature]] JOHN L. BURTON Chairman LUCIEN N. NEDZI Chairman

[[page number]] -114- [[/page number]] [[underline]] Pension Building (National Museum of the Building Arts)[[/underline]] At the May 10, 1976, meeting of the Board of Regents it was reported that the historic Pension Building (located at the north end of Judiciary Square at 4th and G Streets in Northwest Washington), currently used by the District of Columbia Courts, would become available for possible transfer by the General Services Administration to the Smithsonian Institution in the spring of 1978. At the May meeting, the Board was was advised that the Institution would conduct an internal survey to determine the probable use and scope and cost of restoration, renovation, and operation of the building. Such a staff review was conducted which indicated that while the building is basically in sound condition, about $10 million in FY 1978 dollars would be required to renovate the building for public purposes and that annual operating costs (not including program costs) might approximate $1,500,000. Neither of these estimates is tailored to a particular public use, although the principal potential use might seem to be a museum of the building arts (the history of architecture and construction). Over the past year, the Committee for a National Museum of the Building Arts, Inc. (not affiliated with the Smithsonian) funded by grants from the National Endowment for the Arts, the Department of Housing and Urban Development, and private sources has been developing a plan for such a use for the Pension Building. Its draft report proposes that the building be devoted to a variety of exhibitions, a

-115- national forum for public and professional discussion and environmental conflict resolution, and an archival and library center for historical and technical information on planning and building. The report suggests that the museum might be administered by the Smithsonian, but proposes participation by the Library of Congress and possibly other federal agencies and nongovernment or quasi-government organizations. The Institution has expressed its appreciation for being allowed to review the draft report and has indicated informally that a role for the Institution appears very uncertain. Specifically, we have called attention to our other capital improvement and program commitments; to the inappropriateness of a conflict resolution role for the Institution; and to the administrative problems associated with the management of a joint venture involving several agencies, a situation quite unlike our present museum management operations. The Committee's final report will be issued later this year and until it has been made public the Smithsonian should not divulge its contents. Further information and recommendations will be provided to the Regents at that time.

-116- [[underlined]] Next Meetings [[/underlined]] The following dates for the next meetings were tentatively agreed to: -- Executive Committee, Monday, January 9, 1978, 4:00 p.m. -- Board of Regents: - Meeting, Monday, January 16, 1978, 4:00 p.m. - Dinner, Monday, January 16, 1978, 6:30 p.m. [[underlined]] Executive Session [/[underlined]] The Chancellor called for an Executive Session of the Board and the Regents discussed the matter of the Secretary's salary and resolved: Effective November 1, 1977 or such other early date as may be decided by the Executive Committee, the salary of the Secretary is fixed at $72,000. [[underlined]] Adjournment [[/underlined]] The meeting was adjourned at 6:45 p.m. Respectfully submitted, [[signed]] S. Dillon Ripley [[/signed]] S. Dillon Ripley Secretary

[[preprinted]] United States Senate WASHINGTON, D.C. 20510 [[/preprinted]] September 27, 1977 Honorable Sidney R. Yates, Chairman Subcommittee on the Department of the Interior and Related Agencies Committee on Appropriations House of Representatives Washington, D.C. 20515 Dear Mr. Chairman: As Chairman of the Audit Review Committee of the Board of Regents of the Smithsonian Institution, I transmit herewith a copy of a report to the Board of Regents prepared by Mr. Phillip S. Hughes and approved by the Audit Review Committee on September 22, 1977. The report discusses the relationship between the Smithsonian and the Congress and advances a number of proposals for improving the Institution's financial accountability to the Congress. It deals specifically with the GAO report of March 31, 1977 and the concerns that report provoked within the Appropriations Committees of the Congress. I think you will agree that this independent study of the Smithsonian's relationship to the Federal Government and the conclusions and recommendations it advances will do much to overcome the confusion that has existed respecting the nature of the Institution and to establish clear ground rules respecting the Smithsonian's accountability to the Congress. The report does so in a manner that will at the same time preserve the unique qualities that have made the Smithsonian Institution such a source of national pride and achievement. The Board of Regents of the Smithsonian Institution approved the Hughes Report at its meeting today. Sincerely, [[signed]] Henry M. Jackson [[/signed]] Henry M. Jackson Chairman Audit Review Committee Enclosure

[[preprinted]] [[image - drawing of the Smithsonian Institute]] SMITHSONIAN INSTITUTION Washington D.C. 20560 U.S.A. [[preprinted]] September 27, 1977 Dear Mr. Secretary: I commend you and your staff at the Smithsonian Institution for the wholehearted cooperation and assistance you have extended to the Audit and Review Committee and to the Committee's consultant, Mr. Phillip S. Hughes. As stated by Mr. Hughes in his report, you and your staff provided fully and promptly the information and discussion requested and gave him substantial assistance in his work. The joint review made by the Executive Committee of the Board of Regents and the Audit and Review Committee disclosed that the report was fully responsive to the request that we study and consider the relationship of the Smithsonian Institution to the Congress. Your valuable services to the objectives of this inquiry are of significant, long-range value to the Institution. Cordially, [[signed]] Warren E. Burger [[/signed]] Chancellor Honorable S. Dillon Ripley Secretary Smithsonian Institution Washington, D.C. 20560

[[preprinted]] [[image - drawing of the Smithsonian Institute]] SMITHSONIAN INSTITUTION Washington D.C. 20560 U.S.A. [[preprinted]] September 27, 1977 My dear Senator Jackson: After careful consideration of the Report prepared by Mr. Phillip S. Hughes, Special Consultant to the Audit and Review Committee which you chair, your committee adopted the Report unanimously. The Executive Committee, after review of the Report, also recommended approval. The Regents this afternoon adopted your Committee Report. The Board of Regents, having approved the report, recommends that it be released for distribution. On behalf of the Board of Regents, I authorize and request that you convey to those Members of Congress who have an interest in this matter the fact of our wholehearted endorsement of the Audit Review Report by the Board of Regents. I believe I express the views of the Regents that this inquiry has been of significant value to the Smithsonian Institution. As you know, historically the presence of three Senators and three House members on the Board was thought to be a means of continuing oversight. Over more than century of its existence, the programs of the Institution have enormously expanded, and at the same time the vast burden that today rests on Members of Congress makes communication less effective. The General Accounting Office Report and now the Report of the Audit and Review Committee have recommended that both the Regents and the staff of the Institution reexamine practices and policies in light of present day conditions, especially the desirability that Committees of Congress, other than the six Congressional Regents, be kept alerted and informed on programs, policies and projects of the Institution. It will be of great value to the public

- 2 - interest to have this renewed interest of the Congress in Smithsonian, and you can assure your colleagues of the Institution's eagerness to have the continuing interest of the Congress in these matters. Your very expeditious and skillful handling of the matter as Chairman of the Audit and Review Committee and the assistance of the members of your committee are deeply appreciated. I look forward to your continuing interest and chairmanship of the Audit and Review Committee. With kind regards and many thanks, I am, Cordially, [[signed]] Warren E. Burger [[/signed]] Chancellor The Honorable Henry M. Jackson Chairman Audit and Review Committee Board of Regents of the Smithsonian Institution United States Senate Washington, D.C. 20510

[[stamped]] 39262 [[/stamped]] [[preprinted]] United States Senate WASHINGTON, D.C. 20510 [[/preprinted]] September 9, 1977 Honorable S. Dillon Ripley Secretary The Smithsonian Institution 1000 Jefferson Drive, S. W. Washington, D. C. 20560 Dear Dillon: As you know, Sam Hughes recently completed his report to the Audit Review Committee of the Board of Regents covering his study of the Smithsonian's relationship to the Federal Government. I have reviewed his work and think he has done a commendable job. His recommendations seem to address the concerns voiced here in the Congress without impairing the Smithsonian's unique place in the Federal establishment or the flexibility needed for its management. I enclose a copy of the Hughes report for your review and comment. As you know, a combined meeting of the Audit Review Committee and the Executive Committee is scheduled for September 22. Your observations on the report will be most helpful and will, of course, receive every consideration. I will appreciate receiving whatever comments you may wish to make by Friday, September 16. Sincerely, [[signed]] Henry M. Jackson [[/signed]] Henry M. Jackson Chairman Audit Review Committee Enclosure

September 1, 1977 The Honorable Henry M. Jackson Chairman, Audit Review Committee Board of Regents Smithsonian Institution Washington, D.C. 20560 Dear Mr. Chairman: Your letter of May 16, 1977 requested me to make a study of certain matters relating to the Smithsonian Institution. A report on this study and a summary are attached for your consideration. I am hopeful that the report and my conclusions and recommendations will be useful to you and the other Regents, as well as to the Secretary and his staff, in carrying out the Smithsonian's mission. Sincerely yours, [[signature]] Phillip S. Hughes [[/signature]] Phillip S. Hughes Attachments

[[underline]] SUMMARY OF REPORT [[underline]] The Audit Review Committee of the Board of Regents of the Smithsonian Institution sought, and the Board of Regents authorized, the employment of a consultant "to conduct and independent study of the Smithsonian's relationship to the Federal Government. Following is a summary of the report prepared persuant to that authorization. Interviews of concerned persons in and outside of Government disclosed a rather overwhelming approbation of the Smithsonian Institution's programs as a whole and a general feeling that their quality was high. However, many of the most knowledgeable commentators expressed concerns about administrative policies, practices, or methods. The interviews re-emphasized concerns similar to those expressed during the course of appropriation hearings with respect to various research awards programs and the Smithsonian Science Information Exchange. Concern was also expressed that the Congress was too often "surprised" by new programs or projects, some started with trust funds and then switched over to Federal funds. The concerns over "surprises" and over the awards programs appeared to have generated a more basic uneasiness over the Smithsonian's management policies and practices and its use of appropriated and trust funds.

THE RELATIONSHIP BETWEEN THE SMITHSONIAN AND THE CONGRESS Of fundamental importance in considering specific steps which can be taken to eliminate Congressional concerns is the definition, in as clear terms as possible, of the relationship between the Smithsonian Institution and the Congress. Examination of the Smithson will, the 1836 and 1846 Acts, the authorization and funding patterns of the Institution, and the administrative relationships which have developed between the Institution and the rest of the Government produce the following highlights of that relationship: (1) Smithson clearly wanted the United States to be involved in the Institution, since he gave his property to the United States of America; (2) Congress accepted this involvement and took statutory action in 1836 to accept the bequest and in 1846 to carry out the trust; (3) growing Federal appropriations over the years have tended to further emphasize the Federal nature of the Institution; and (4) administrative actions involving the use of appropriated funds have followed the prevailing Federal agency pattern and the trust funds, and personnel paid from them, have been covered under several Federal statutes of general application. In the above circumstances, the Smithsonian Institution seems practically and operationally to be a Federal "establishment," which was created to carry out the trust objectives of the Smithson will. The charter and mission of the Institution are broadly set forth in the 1846 Act; later legislation adds detail, but not scope. 11

The confusion as to the nature of the Smithsonian (whether it is "private" or Federal, for example) seems to have come about because the Regents and the Secretary have several kinds of funds at their disposal for achieving the Institution's basic mission. Smithsonian trust and self-generated funds are used by the Regents and the Secretary with wide discretion and with only very general Congressional oversight to insure conformity with the trust. For about 100 years, however, the Institution's largest single source of income has been funds appropriated to it by the Congress in accordance with normal budget and appropriation procedures. These funds are not treated any differently from funds appropriated to Executive or other agencies of the Government. All of the applicable statutes and rules and constraints apply, and the Congress' oversight responsibility is the same as that involved in other expenditures from Federal appropriations. Recognition and general acceptance of the Smithsonian as a Federal establishment spending funds derived from several sources according to differing statutes and operating practices would clarify and simplify relationships between the Smithsonian and the Congress without adversely affecting the interests of either. The Congress' oversight rights and responsibilities with respect to appropriated as well as non-appropriated funds would be preserved. The Smithsonian's unique characteristics would also be preserved, including management by the Regents and the Secretary and the program flexibility derived from having non-Federal funds at their disposal. iii

The table on page 19 of the report deals with certain questions as to the authority of the Smithsonian with respect to real property under its control. RECOMMENDATIONS The recommendations which follow center around the basic question of the accountability of the Smithsonian to the Congress, including aspects of the Institution's internal structure and management processes which affect accountability. I. Improving the accountability of the Institution to the Congress [[line]] 1. The Regents and the Secretary should adopt the policy of seeking specific authorizations for all significant new programs or projects involving the use of Federal funds. While the terms of the 1846 Act frequently have been deemed adequate to encompass new activities that are clearly for the increase and diffusion of knowledge, specific authorization will ensure Congressional awareness. 2. The Regents and the Secretary should adopt a policy of discussing with the Appropriations Committees any proposed use of trust funds which may involve the future expenditure of Federal funds. Such discussion should take place at a timely point before any commitment is made by the Institution. 3. The Regents and the Secretary should establish a 5-year forward planning process for the Institution covering all activities. Such a process should establish the general direction of the Smithsonian program iv

efforts and identify areas for priority and emphasis, but permit flexibility enough to take advantage of ad hoc opportunities. It will be a useful management tool, will provide a basis for periodic oversight hearings by the authorizing committees, and will communicate to those committees and the appropriations committees important information about the forward plans of the Institution. 4. With regard to various research awards programs, in addition to the changes proposed by GAO, the Institution should adopt the practice of a special review by the Regents or the Executive Committee thereof, of any awards which the Secretary believes might be perceived by the Congress or the public as self-serving or inappropriate. II. [[underlined]] Internal management matters [[/underlined]] 1. As an early and fundamental step in the planning process, the Smithsonian Institution should develop a comprehensive list with informative descriptions of activities which it carries on. Administrative and internal management functions should be listed and described separately. Such a list, kept current, will help to describe the Smithsonian to the Congress as well as to the public in a systematic and consistent manner and will permit appropriate note to be taken by the Regents, Congressional committees, and the public, of significant changes in the Institution's activities. As a related matter, the Institution should develop and keep up-to-date an organization chart accurately and completely reflecting the structure of the Institution. v

2. The Institution should develop and issue general policies for the use of its trust funds. Such a policy statement will be extremely useful in communicating to the Congress the intentions of the Regents and the Secretary with respect to trust funds, and in clarifying differences between the use of such funds and appropriated funds. The 1846 Act contemplated that the Regents and the Secretary would have flexibility to use trust funds subject only to general Congressional oversight. The policy statement should be as specific as possible with flexibility afforded by a process for review by the Regents of proposed exceptions. The policies should extend to the identification of the categories of positions which would normally be paid from trust funds. (A draft example of such a statement is appended to this report.) 3. The Institution should fill the permanent position of Under Secretary. The incumbent would be responsible for day-to-day operation and internal management of the Institution. Under the present law, he would be appointed by the Secretary but the selection process should actively involve the Regents. The Under Secretary should be chosen for his managerial training, experience, and skills, rather than for scientific or cultural achievements and interests. With this background, he would not normally be a successor to the Secretary. With the growth of the Institution in recent years, and the great diversity of its programs, its management has become a very complex and difficult task, perhaps as difficult as for any activity of its size. To help cope with this growing complexity, I believe the position of vi

the Under Secretary should be a permanent part of the management structure. His availability will also have the further advantage of permitting the Secretary to concentrate his attention on broad policy matters, substantive leadership and program innovations, and scientific interests which have been the concern of all Smithsonian Secretaries. In addition to giving day-to-day direction to the management and service staffs of the Institution, the Under Secretary should take the lead in identifying and developing solutions (or alternative courses of action) to major policy and program questions at the request of or for consideration by the Secretary. He should also share with the Secretary, along mutually agreeable lines, the day-to-day supervision of the "line" activities of the Institution as they affect established program objectives, sound management practices, and accountability concerns. The Under Secretary should work through existing institutional staff. He should neither duplicate nor supplant existing key staff but should combine his and their efforts to add new strength to the Smithsonian's management team. 4. The Smithsonian's Office of Audits should be augmented by such additional positions as will permit it to maintain a 5-year audit cycle. Also, that Office should make available its audit reports to the Regents' Audit Review Committee at the same time that they are transmitted to the Secretary. III. Recommendations contained in [[underlined]] the GAO's report [[/underlined] The GAO's recommendations appear generally sound, and the report indicates general concurrence in them. However, certain modifications in approach are discussed in the report. vii

[[underlined]] REPORT TO THE AUDIT REVIEW COMMITTEE OF THE BOARD OF REGENTS OF THE SMITHSONIAN INSTITUTION [[/underlined]] by PHILLIP S. HUGHES By his letter of May 16, 1977, Senator Henry M. Jackson, in his capacity as Chairman of the Smithsonian's Audit Review Committee, set forth the circumstances which motivated that Committee to recommend, and the Board of Regents to authorize, my employment "to conduct an independent study of the Smithsonian's relationship to the Federal Government." The letter refers to the Regents' direction to the Audit Review Committee to undertake a review of a report of the Comptroller General of the United States, dated March 31, 1977, on the Smithsonian Institution; it also refers to concerns in the Congress both over matters addressed by the Comptroller General and over fundamental relationships of the Smithsonian to the Federal Government. Senator Jackson indicated that the purpose of my study was "to define the Institution's present charter and its relationship to the Congress and the Executive Branch of the Government, and to recommend whatever changes seem desirable to clarify those relationships and strengthen the Smithsonian's present charter and its accountability to the Congress." The Regents' goal, he indicated, "is to identify opportunities for improvement while, at the same time, preserving the unique qualities that have made the Smithsonian such a source of national pride and achievement."

In my reply of May 20, 1977, I informed Senator Jackson that the framework established by his letter was satisfactory to me and that I would schedule my work so as to complete it by the first of September 1977. By his letter of June 2, 1977, Mr. James E. Webb, Chairman of the Executive Committee of the Regents, confirmed my appointment and set forth the terms of my employment. All three letters are attached as Appendix I (pp. 28-33). This report is the product of my study and is intended to fulfill the terms of my agreement with the Audit Review Committee and the Regents. The study itself and the preparation of the report have been of even greater interest than I had originally anticipated and have afforded me an opportunity to learn a good deal about a fascinating and unique Institution. I am hopeful that the transformation of that knowledge into conclusions and recommendations will be useful to the Regents and the Congress. I am most grateful to the Regents and the Audit Review Committee for affording me this opportunity. I would particularly like to thank Senator Jackson and Mr. Webb for their confidence, advice, and continuing support. I also wish to express my appreciation to those Members of the House and Senate to whom I talked, who gave freely of their time and knowledge, and to the staff of both Members and Congressional committees who shared their knowledge and candidly expressed their views. Finally, I would like to thank Secretary Ripley and members of his staff for their cooperation and assistance which was well above and beyond the - 2 -

call of duty. They made themselves fully available for advice and discussion and have provided fully and promptly information which I requested. The friendly challenges, counsel, and editorial assistance of Wilfred H. Rommel have been invaluable during the latter stages of the preparation of the report, and Mrs. Dolores McCarthy provided the competent and accommodating secretarial help which made it possible to get the report on paper. CONCEPT AND STRUCTURE OF REPORT The General Accounting Office's report contained three recommendations dealing specifically with the [[underlined]] Smithsonian Research Foundation [[/underlined]] and the [[underlined]] Smithsonian Science Information Exchange. [[/underlined]] "We recommend that the Board of Regents dissolve the Smithsonian Research Foundation and the Smithsonian Science Information Exchange. "Further we recommend that their operations be carried out as part of the Smithsonian's regular organizational structure. "We recommend that the Secretary: --propose and justify to the Congress the exemptions from existing legislation the Smithsonian believes it needs to run effectively, and with a minimum of red tape, the programs now funded through the Smithsonian Research Foundation and the Smithsonian Science Information Exchange." The report contained three additional recommendations dealing with the Smithsonian's [[underlined]] accountability [[/underlined]] to the Congress. - 3 -

"We recommend that the Secretary: --Continue to work with the Appropriations Committees to reach a common understanding as to the types of budget reprograming actions the Committees wish to approve in advance. "We recommend that the Board of Regents: --Establish, in conjunction with the appropriate congressional committees, clear policies governing the use of Federal and private funds. --Provide the Appropriations Committees with information on the planned use of private funds at the time appropriation requests are submitted." The GAO's report did not deal with the broader questions of relationship between the Smithsonian and the Federal Government, referred to in Senator Jackson's letter. To give me an adequate information base for considering the GAO's recommendations and to deal with the broader relationship concerns, I did the following: First, I engaged in rather extensive discussions with certain concerned Senators and Congressmen, members of their staffs, staffs of pertinent committees in both Houses, Smithsonian officials and staff members, and persons outside the Government who were interested in and knowledgeable of the Smithsonian Institution. These discussions were intended to identify areas of relationship presenting special problems and to provide a focus for a review of relevant legislation and administrative practices. Attached as Appendix II (pp. 34-36) is a list of those individuals with whom I talked during the course of my two-month study. - 4 -

Second, as these interviews progressed, I reviewed applicable statutes and administrative practices to gain a clearer conception of the Institution and of the basic framework underlying its relationship with the Congress and the Executive Branch. It was my expectation that, by analyzing problem areas in relation to the statutes and administrative practices, it would be possible to recommend improvements which would resolve any significant relationship problems which were identified. AREAS OF MAJOR CONCERN Significantly, my interviews disclosed a rather overwhelming approbation of the Smithsonian's programs as a whole and a general feeling that their quality is high. Nevertheless, many of the most knowledgeable commentators expressed a sometimes vague but often quite specific concern about its administrative policies, practices, or methods. These concerns ranged from a general apprehension that the management of so large and diverse an enterprise was too decentralized to more specific concerns such as those noted below. First, the concerns expressed during the course of appropriation hearings (and dealt with in the GAO's report) with respect to the research awards and foreign currency programs and the Smithsonian Science Information Exchange were reiterated, sometimes with considerable force. Basically, those who commented seemed to feel that, whether or not these programs were in fact self-serving, their structure and administration made them appear to be so. Of particular concern was the financing of the research awards program. - 5 -

Second, there was evident a strong concern that the Congress was too often "surprised" by new programs or projects, some of which were started with trust funds and then switched over to Federal funds. The GAO report's references to greater accountability have obvious relevance here. Third, the concerns over "surprises" and the awards programs appear to have generated a more basic uneasiness concerning Smithsonian policies and practices governing the use of appropriated and trust funds. The view was expressed by some, including the GAO, that there should be firm, specific policies for the uses of Federal and trust funds. Fourth, a few expressed concern that the unusual diversity, decentralization, and flexibility afforded the Smithsonian might permit misuse of funds available to it. As I have made clear, it was not the purpose of my study to investigate this area of concern, and I presume that the investigative staff of the House Appropriations Committee will look into it during the course of its review of Smithsonian activities. However, I have included recommendations which are directed toward the improvement of the management of the Institution and which have relevance to this concern. In summary, the general picture which my interviews have painted is one of friendly concern by interested persons that, despite the tremendous achievements of the Institution, its management operations [[underlined]]may[[/underlined]] need tightening and its accountability to the Congress [[underlined]]does[[/underlined]] need to be improved. - 6 -

THE RELATIONSHIP BETWEEN THE SMITHSONIAN AND THE CONGRESS Of fundamental importance in considering specific steps which might be taken to eliminate Congressional concerns is the definition, in as clear terms as possible, of the relationship between the Smithsonian and the Congress. The purpose of this section is to review briefly the history and nature of this unique establishment as reflected in enabling Acts and other key documents and in its financial and administrative practices. Theories have been advanced that the Institution is "private" not Federal in character; that there are two Smithsonians, a "private" and a Federal; that the Institution is located in the Executive Branch or in the Legislative Branch; or that it is in the Federal Government but outside any of the three branches. For reasons indicated below, I have concluded that the Smithsonian is a [[underlined]] Federal establishment [[/underlined]]. However, the objectives of this report do not require determining where it is located on the spectrum of the Federal Government so long as its relationships to the Congress and to the Executive Branch, as well as its lines of accountability, as defined in the Acts of Congress and in practices, are identified. I believe these relationships and lines can be described with reasonable clarity by examining the Smithson will, the 1836 and 1846 Acts, the authorization and funding patterns of the Institution, and administrative relationships which have developed between the Institution and the Executive Branch and the Congress. - 7 -

With respect to the Smithson will, I believe it is fundamental that Smithson bequeathed the whole of his property "[[underlined]]to the United States of America[[/underline]] to found at Washington, under the name of the Smithsonian Institution, an establishment for the increase and diffusion of knowledge among men." (Underscoring for emphasis.) Since he could more easily have created a totally private institution, had he wished, it seems unavoidable that he wished the Government of the United States to be involved in administering the trust. The 1836 and 1846 Acts indicate the acceptance of the bequest on Smithson's terms. These Acts underline the U.S. Government's involvement in the establishment of the Institution and its consequent responsibilities. They were necessary to effectuate the bequest, since Smithson specifically bequeathed his property "to the United States of America." In this connection, in December 1835, President Jackson transmitted to Congress a report on the bequest, emphasizing the need for legislative action by stating: "The [[underlined]]Executive[[/underlined]] having no authority to take any steps for accepting the [Smithson] trust and obtaining the funds, the papers are communicated with a view to such measures as [[underlined]]Congress[[/underline]] may deem necessary." (Underscoring for emphasis.) There has been no really generic legislation with respect to the Smithsonian since the 1846 Act which, with the 1836 Act, was Congress' response to President Jackson's referral. All later legislation has been for specific and limited purposes. The first report of the first Secretary of the Smithsonian, Joseph Henry, dated December 13, 1847, observed: - 8 -

"That the Institution is not a national establishment, [[begin underline]] in the sense in which institutions dependent on the government for support are so, [[end underline]] must be evident when it is recollected that the money was not absolutely given to the United States, but intrusted to it for a special object, namely the establishment of an institution for the benefit of men, to bear the name of the donor, and, consequently, to reflect upon his memory the honor of all good which may be accomplished by means of the bequest." (Underscoring for emphasis.) Within a few years, however, the Regents sought, and the Congress provided, Federal funds to supplement the trust funds. The Federal funds were intended to carry out purposes consistent with the objectives of the 1846 Act, but beyond the resources provided by Smithson. Generally speaking, they were appropriated to finance the "national collections" which were accumulating at a rapid rate. For about a century, Federal appropriations have provided most of the financial support for Smithsonian activities. The receipt and use of these funds over the years has obviously made the Institution more, rather than less, "national," to use Secretary Henry's term. Relationships between the Smithsonian and the Executive Branch and the Smithsonian and the Congress have not followed a uniform pattern. Under some circumstances, the Institution has been excluded from statutes which normally apply to Federal agencies. Under other circumstances, it has been included in such statutes or has chosen to follow program or administrative procedures which are substantially the same as those relating to Executive agencies. For example, Federal funds appropriated to the Institution are subject to the laws and regulations governing Federal budgets and - 9 -

expenditures, including audit by the GAO. Its employees who are paid from Federal appropriated funds have the benefits and the attendant restrictions of the Civil Service system. It receives assistance from the General Services Administration and may use Federal real and personal property. On the other hand, the uniquely constituted Board of Regents, in whom responsibility for the administration of the Institution is vested by statute, has the duties of a trustee with regard to trust funds of the Institution with independent discretion. On balance, the ad hoc development of the Institution's activities reflects a pronounced Federal tilt, dictated largely by the preponderance of Federal funding. In summary, then: (1) Smithson clearly wanted the United Stated Government to be involved in the Institution since he gave his property to the United States of America; (2) Congress accepted this involvement and took statutory action in 1836 to accept the bequest and in 1846 to carry out the trust; (3) growing Federal appropriations over the years have tended to further emphasize the Federal nature of the Institution; (4) administrative actions involving the use of appropriated funds have followed the prevailing Federal agency pattern; and (5) the trust funds, and the employees paid therefrom, have been covered under several Federal statutes of general application; e.g., the Federal Tort Claims Act, the Federal Employees Compensation Act, the Occupational Safety and Health Act, and the Unemployment Compensation for Federal Employees program. - 10 -

This background leads me to conclude that the Smithsonian Institution is practically and operationally a Federal instrumentality, agency, or "establishment" (to use the term of the Smithson will and the 1846 Act), which was created by Congress to carry out the trust objectives of the Smithson will. Thus, while the Institution does not "govern" in the customary sense and was not intended to be governmental in its basic character, it is a Federal establishment. The charter of the Institution is essentially set forth in the 1846 Act, which incorporates the Institution, sets forth its mission in broad terms, provides for the appointment and terms of office of the administering Board of Regents, provides for the election by the Board of a Secretary and the establishment of an Executive Committee of the Board, and authorizes the Secretary to employ "assistants." All later legislation is essentially within the framework established by that Act and adds detail rather than scope to the charter. The mission of the Institution also is broadly set forth in the 1846 Act, as "the increase and diffusion of knowledge among men." As with the charter, later legislation adds detail but not scope to this very broad mission statement. The Smithsonian Institution is now in its 132nd year of existence, and its programs extend over a substantial part of this mission spectrum. The program and activity listing in the [[underlined]]Smithsonian Year 1976[[underlined]] "Contents" section is illustrative: - 11 -

SCIENCE Center for the Study of Man Chesapeake Bay Center for Environmental Studies Fort Pierce Bureau National Air and Space Museum National Museum of Natural History National Zoological Park Office of International Programs Radiation Biology Laboratory Smithsonian Astrophysical Observatory Smithsonian Science Information Exchange, Inc. Smithsonian Tropical Research Institute HISTORY AND ART Archives of American Art Cooper-Hewitt Museum of Decorative Arts and Design Freer Gallery of Art Hirshhorn Museum and Sculpture Garden Joseph Henry Papers National Collection of Fine Arts National Museum of History and Technology National Portrait Gallery Office of Academic Studies Office of American Studies MUSEUM PROGRAMS Conservation-Analytical Laboratory National Museum Act Program Office of Exhibits Central Office of Horticulture Office of Museum Programs Office of Registrar Smithsonian Institution Archives Smithsonian Institution Libraries Smithsonian Institution Traveling Exhibition Service PUBLIC SERVICE Anacostia Neighborhood Museum Division of Performing Arts International Exchange Service Office of Elementary and Secondary Education Office of Public Affairs Office of Smithsonian Symposia and Seminars Reading is Fundamental, Inc. Smithsonian Associates Smithsonian Institution Press Smithsonian Magazine - 12 -

The question has been raised whether current circumstances make it desirable that the charter or definition of mission be modified. I believe that the broad legislative charter and definition of mission, which have played such an important part in bringing the Institution to its present high level of development, are still suitable and effective. Any problems of mission definition and clarification can be better approached, in my judgment, by means other than statutory changes, and I have made some recommendations later in this report as to such means. I believe that the confusion as to the relationship of the Smithsonian to the Congress does not stem from the scope of its mission and charter, but has come about because the Regents and the Secretary have several kinds of funds at their disposal for achieving the Institution's basic mission--the increase and diffusion of knowledge among men. These several kinds of funds come from different sources and different provisions of law or trust restrictions are applicable to them. First, with respect to the [[underlined]]Smithson trust fund[[/underlined]] and subsequent [[underlined]]unrestricted[[/underlined]] additions to it, the 1846 Act and funding and administrative practices over the years indicate that the Regents and the Secretary have wide discretion in the expenditure of the income from that fund, so long as their actions and consistent with the Institution's basic mission. In recognition of the terms of the 1846 Act and the statutory responsibilities and discretion of the Regents and the Secretary, the Congress has exercised only very general oversight responsibility with respect to these trust funds to ensure consistency with the basic mission of the trust. - 13 -

Second, the Smithsonian also receives [[underlined]] restricted trust funds [[/underlined]] from private sources and [[underlined]] grant and contract monies [[/underlined]] from Federal agencies. Both of these are provided for specific purposes and must be spent in accordance with the stipulated terms of the grant, contract, or restricted trust agreement. Third, for about 100 years, the Institution's largest single source of income has been funds appropriated to it by the Congress in accordance with normal budget and appropriation procedures. These funds have been appropriated by the Congress at the request of, or with the approval of, the Regents. While the purposes for which these appropriations are provided are consistent with the objectives for which the Institution was established, they enable it to do work which could not be accomplished without Federal financial support; for example, to house and display the "national collections." These funds are not treated any differently from funds appropriated to Executive or other agencies of the Government. All of the applicable statutes and rules and constraints apply, and the Congress' oversight responsibility is the same as that involved in other expenditures from Federal appropriations. Finally, the Regents and the Secretary have at their disposal certain funds generated by the Institution itself primarily from [[underlined]] business enterprise type [[/underlined]] activities. This category has increased in importance in recent years because of the growth and vitality of the Institution as a whole. The 1846 Act has been interpreted to authorize the addition of such funds to the corpus of the unrestricted trust funds and to authorize their discretionary use for trust purposes. - 14 -

I believe that recognition and general acceptance of the above facts--that while the Smithsonian Institution is a Federal establishment, it spends funds derived from different sources according to differing statutes and operating practices applicable to each source--would both clarify and simplify relationships between the Smithsonian and the Congress without adversely affecting the interests of either. From the standpoint of the Congress, its oversight rights and responsibilities with respect to both Federal funds and all categories of non-Federal funds would be preserved. From the standpoint of the Smithsonian, its unique characteristics would be preserved, including management by the Regents and the Secretary and the program flexibility derived from having non-Federal funds at their disposal. With respect to Congressional oversight rights and responsibilities, several factors have increased Congressional interest in trust and other funds not appropriated to the Smithsonian, but available to it: (1) the increased size, visibility, and vitality of the Institution inevitably raises questions about how it makes program choices for funding from non-appropriated, as well as appropriated, sources; (2) the total volume of Federal funds provided the Institution has grown steadily for many years and rapidly in recent years; (3) the Congress has been asked to appropriate funds for projects or programs initially financed by funds from non-appropriated sources, and (4) the total volume of self-generated funds has increased substantially in the last few years, increasing the significance of non-appropriated funds in total as well as the purposes - 15 -

for which they are used. This increased Congressional interest is both understandable and warranted in my judgment and can be satisfied by the Smithsonian in a number of ways which are set out in subsequent recommendations. Two rather basic, specific questions with regard to the Smithsonian's "charter" were raised during the course of my discussions: 1. The administrative relationship of the Institution to activities associated with it, including the National Gallery of Art, the John F. Kennedy Center for the Performing Arts, and the Woodrow Wilson International Center for Scholars. 2. The authority of the Regents and the Secretary with regard to real property under the control of the Smithsonian. Certain background information with regard to these two matters is set forth in the next three pages of this report. RELATIONSHIP BETWEEN THE SMITHSONIAN INSTITUTION AND ITS CONSTITUENT ELEMENTS The "Contents" section of the [[underlined]] Smithsonian Year 1976 [[/underlined]] (the Smithsonian's Report for the period July 1, 1975 through September 30, 1976) lists 43 museums, galleries, offices, centers, laboratories, programs, or activities of the Smithsonian. Forty of these are grouped under four major functional categories: Science, History and Art, Museum Programs, and Public Service. Three of them, the Woodrow Wilson International Center for Scholars, the John F. Kennedy Center for the Performing Arts, and the National Gallery of Art, are separately listed. - 16 -

My review of the basic statutes and operating practices of the Smithsonian Institution indicates that the 43 constituent "activities" divide into only two basic administrative categories. The 40 noted above (and some additional programs not specifically listed as major entities in the "Contents" section) are under the direct administrative control of the Regents and the Secretary. There are minor differences in the scope and directness of that control, and in one case (the Joseph H. Hirshhorn Museum and Sculpture Garden) an "advisory" body has important discretionary functions relating to acquisition, retention, and exhibition of works of art in this collection. Basically, however, the Regents and Secretary control budgeting, personnel selection, and program activities. The three other "activities" noted above--the Woodrow Wilson Center, the Kennedy Center, and the National Gallery--are, for all practical purposes, independent of control by the Regents and the Secretary. While their statutes identify them as "bureaus" or "centers" in the Smithsonian and while such statutory language may impose some residual or receivership responsibilities on the Smithsonian, both policy control and day-to-day administration are in the hands of independent boards. The budgets of all three are independently prepared and independently justified before the Congress. The Secretary of the Smithsonian is [[underlined]] ex officio [[/underlined]] a member of all three boards, and the Chancellor also is a member of the board of trustees of the National Gallery. However, this arrangement makes possible only coordination, not control. - 17 -

Thus, while the Regents and the Secretary have the necessary authority to direct and manage the affairs of the great majority of the Institution's constituent elements, they have no such authority with respect to the National Gallery, the Kennedy Center, and the Woodrow Wilson Center. Key portions of the sections of Title 20, U.S.C. applicable to these three organizations are attached as Appendix III (pp. 37-38). - 18 -

REAL PROPERTY UNDER THE CONTROL OF THE SMITHSONIAN INSTITUTION All real property under the control of the Smithsonian is listed below in three categories with brief comment as to the authority of the Regents and the Secretary with respect to each category. [[underlined]]FEDERAL TRUST PROPERTIES[[/underlined]] Smithsonian Institution Building Arts and Industries Building Natural History Building Freer Gallery of Art History and Technology Building Hirshhorn Museum National Air and Space Museum National Zoological Park National Portrait Gallery National Collection of Fine Arts These properties are "appropriated to the Institution" by the terms of the 1846 Act and subsequent legislation (see 20 U.S.C., §52). It appears that such "appropriation" was intended to give the Institution the right to use such federal property for trust purposes, but not the right to mortgage the property, or to dispose of it without the consent of Congress, if no longer needed for trust purposes. [[underlined]]CUSTODY IN THE SMITHSONIAN [[/underlined]] NZP Animal Conservation Center Renwick Gallery Properties at Silver Hill, Maryland Barro Colorado Island The first three properties have been transferred to the custody of the Smithsonian by the General Services Administration for the Institution's use, and at whatever time the Smithsonian ceases using these properties they would be returned to GSA. Barro Colorado Island was transferred to the Smithsonian by the 1946 Reorganization Plan No. 3 (see 20 U.S.C., §79, et seq.), and is subject to United States treaty provisions. [[underlined]]NON-FEDERAL TRUST PROPERTY[[/underlined]] Barney House Belmont Conference Center Chesapeake Bay Center for Environmental Studies Cooper-Hewitt Museum These properties have been purchased with trust funds or received by, or through private donations. To date no facilities have been constructed with appropriated funds on any of these trust fund properties, except for some repairs and minor renovations. Control and disposition of such properties is within the general discretion of the Board of Regents under the 1846 Act (see 20 U.S.C., §§41, 42, and 55). Should appropriated funds be requested for any such construction in the future, consideration will be given at that time to the appropriate protection of the federal interest. ------------ The above categories exclude property under lease or use permit arrangements. - 19 -

RECOMMENDATIONS The recommendations which follow center around the basic question of accountability of the Smithsonian to the Congress, which is of particular concern to those with whom I have talked. Also covered are certain matters relating to aspects of the Institution's internal structure or management processes which affect accountability; however, this coverage was necessarily selective rather than comprehensive. The discussion and conclusions in the report which have to do with the Smithsonian's nature, charter and mission, as well as the processes by which it relates and reports to the Congress, are obviously of fundamental importance to the recommendations. For convenience, the recommendations are divided into three groups: improving the accountability of the Institution to the Congress, internal management matters, and recommendations contained in the GAO's report. I. [[underline]]Improving the accountability of the Institution to Congress[[/underline]] These recommendations are for the purpose of improving the accountability of the Institution to the Congress without jeopardizing its essential character. 1. The Regents and the Secretary should adopt the policy of seeking specific authorizations for all significant new programs or projects involving the use of Federal funds. While the terms of the 1846 Act frequently have been deemed adequate to encompass new activities that - 20 -

are clearly for the increase and diffusion of knowledge, specific authorization will ensure Congressional awareness. Consultation with appropriate committees in specific future cases will permit the development of criteria satisfactory to the committees and the Institution as to what is a "significant" new program or project. 2. The Regents and the Secretary should adopt a policy of discussing with the appropriations committees any proposed use of trust funds which may involve the future expenditure of Federal funds. Such discussion should take place at a timely point before any commitment is made by the Institution. This will avoid "surprises" of the type noted earlier and make advance planning more realistic. 3. The Regents and the Secretary should establish a 5-year forward planning process for the Institution covering all of its activities. Such a process should establish the general direction of the Smithsonian's program efforts and identify areas for priority and emphasis. At the same time, it should permit flexibility enough to take advantage of ad hoc opportunities. If properly designed and executed, it will be a useful management tool for the the Regents and the Secretary, will provide a basis for periodic oversight hearings by the authorizing committees, and will communicate to these committees as well as the appropriations committees important information about the forward plans of the Institution. As a management tool, it will help focus the efforts of the Institution within its broad statutory mission and will establish a framework within which the Regents and the Secretary can decide to do -21-

or not do projects which arise on an ad hoc basis. From an accountability standpoint, I believe a planning process properly carried out is a better approach to mission definition and clarification than to attempt this by statutory means. Discussions of plans and priorities with the Congress will facilitate basic communications between the Institution and the Congress and will improve both the Congress' and the Institution's awareness of each other's priorities and concerns. 4. With regard to various research awards programs, in addition to the changes proposed by GAO, the Institution should adopt the practice of a special review by the Regents or by their Executive Committee of any awards which the Secretary believes might be perceived by the Congress or the public as self-serving or inappropriate. II. [[underlined]] Internal management matters[[/underlined]] These recommendations relate to the selected matters of internal management which in turn affect the Institution's charter and accountability. 1. As an early step in the planning process, the Smithsonian Institution should develop and keep a current a comprehensive [[underline]]list of activities[[/underline]] (programs, projects, etc.) which it carries on. Administrative and internal management functions should be listed and described separately. The list should be more than a simple, "one-line" listing and should include informative descriptions of the activities and functions. Such a list, in addition to being a fundamental step in planning, will help to describe the Smithsonian to the Congress as well as to the public - 22 -

in a systematic and consistent matter and will permit appropriate note to be taken by the Regents, Congressional committees, and the public of significant activity changes which will occur from time to time. As a related matter, the Institution should develop and keep up-to-date an organization chart which accurately and completely reflects the structure of the Institution in standard form and terms. 2. The Institution should develop and set forth in concise written form [[underline]]general policies for the use of its trust funds[[/underline]]. Such a statement will be very useful in communicating to the Congress the intentions of the Regents and the Secretary with respect to trust funds and in clarifying differences between the use of such funds and appropriated funds. The 1846 Act contemplated that the Regents and the Secretary would have flexibility to use trust funds subject only to general Congressional oversight. The policies should be as specific as possible, with flexibility afforded by a process whereby the Regents would review any exceptions to the policies proposed by the Secretary. The policies should include the identification of the categories of positions which would normally be paid from trust funds. Attached as Appendix IV (pp. 39-47) is a draft example of such a statement, which was prepared by Smithsonian staff for presentation to the Secretary and to the Regents. 3. The Institution should fill the permanent position of Under Secretary. The incumbent should be responsible for the day-to-day operation and internal management of the Institution. Under present law, - 23 -

he would be appointed by the Secretary but the selection process should actively involve the Regents. The Under Secretary should be chosen for his managerial training, experience, and skills, rather than for scientific or cultural achievements and interests. With this background, he would not normally be a successor to the Secretary. With the growth of the Institution in recent years, and the great diversity of its programs, its management has become a very complex and difficult task, perhaps as difficult as for any activity of its size. To help cope with this growing complexity, I believe the Under Secretary should be a permanent part of the Smithsonian staff. His availability will have the further major advantage of permitting the Secretary to concentrate his attention on broad policy matters, substantive leadership and program innovations, and scientific and cultural interests which have been the concern of all Smithsonian Secretaries. In addition to giving day-to-day direction to the Institution, the Under Secretary should take the lead in identifying and developing solutions (or alternative courses of action) to major policy and program questions at the request of or for consideration by the Secretary. He should also share with the Secretary, along mutually agreeable lines to be worked out between them, the day-to-day supervision of the "line" activities of the Institution as they affect established program objectives, sound management practices, and accountability concerns. The Under Secretary should work through existing institutional staff. He should neither duplicate nor supplant existing key staff but should combine his and their efforts to add new strength to the Smithsonian's management team. - 24 -

4. The staff of the Auditor of the Smithsonian Institution should be augmented by such additional positions as will permit the Office of Audits to maintain a five-year audit cycle. Also, the Auditor should make available copies of his Office's audit reports to the Audit Review Committee of the Board of Regents at the same time that he transmits them to the Secretary. III. Recommendations contained in the GAO's report [[line]] The GAO recommended that the Smithsonian Research Foundation and the Smithsonian Science Information Exchange (SSIE) be "dissolved" and that their operations be carried out as part of the Smithsonian's regular organizational structure. I concur in the recommendations with respect to the Smithsonian Research Foundation. The GAO also recommended that the Secretary seek legislative exemptions needed to operate the Smithsonian research awards program, provided, of course, that such exemptions prove necessary. The Institution is exploring the need for exemptions. With regard to the SSIE, however, I believe that other organizational locations for it should be explored as an alternative to integrating it into the Smithsonian organization. While the SSIE fits within the broad trust mission of the Smithsonian, its continued operation by the latter is not essential to other Smithsonian activities and it tends to diffuse central management responsibilities. The SSIE may well be more appropriate to, and supportive of, the basic mission of another agency. Under - 25 -

these circumstances, I believe it appropriate to explore the possibility of locating the Exchange in another department or agency. OMB has initiated action to this end; and the Smithsonian Institution has furnished OMB with a discussion paper prepared by Dr. David Hersey, President of the SSIE, which outlines possible alternative organization locations. In addition to the locations discussed in that paper, I believe that the Library of Congress merits consideration. With regard to the GAO's recommendations dealing with the accountability of the Institution, I concur in the general thrust of its recommendation regarding consultation by the Smithsonian with the appropriations committees on reprogramming. I also concur in its recommendation that those committees be provided with information on the planned use of trust funds at the time appropriations requests are submitted. The Secretary and the Smithsonian staff have been working with the committees on both of these matters. It is my understanding that the work on reprogramming is nearing completion. I also understand that the Institution intends to set forth for the committees' information its budget plans for the use of trust and other non-appropriated funds on a combined basis with its budget request for appropriated funds. I have recommended to the Smithsonian staff that its presentation of budget plans be on a gross rather than a net basis to more adequately portray the full scope of the Institution's activities. Gross expenditures, (reflected in the Table numbered Appendix V (p. 48) are about 50 percent greater than net expenditures. They more clearly and completely reflect - 26 -

the increasing importance of self-generated income as well as the significance of grant and contract funds. As reflected in Recommendation II (2) above, I also concur in the thrust of GAO's recommendation that the Regents "Establish, in conjunction with the appropriate congressional committees, clear policies governing the use of Federal and private [sic] funds." Since appropriations are controlled through the authorization and appropriation processes, however, the recommendation appears to be addressed primarily to trust funds. The term "trust" seems more appropriate than "private" to describe such funds. - 27 -

APPENDIX I [[preprinted]] United States Senate WASHINGTON, D.C. 20510 [[/preprinted]] May 16, 1977 Mr. Phillip S. Hughes 3710 Taylor Street Chevy Chase, Maryland 20015 Dear Mr. Hughes: I am writing this letter in my capacity as Chairman of the Audit Review Committee of the Board of Regents of the Smithsonian Institution. As you know, the Audit Review Committee has been directed by the Board of Regents to undertake a review of a Report of the Comptroller General of the United States on the Smithsonian Institution. The Comptroller General's report was released March 31, 1977 and calls for the strengthening of the Smithsonian's financial accountability to the Congress in a number of respects. The report has also provoked considerable concern within the Appropriations Committees of the Congress not only over the specific matters addressed by the Comptroller General but over the fundamental relationships of the Smithsonian Institution to the Federal Government and how that relationship impacts on the Institution's financial and management accountability to the Congress. The concerns now being evidenced in the Congress arise from the fact that Federal support in the form of appropriations and grants now accounts for some 90 percent of the Institution's funding. Yet, the Smithsonian retains its original character as a charitable trust accepted by the Congress and committed to a management framework substantially different from that applied to other Federal Government programs. The current debate in the Congress bespeaks a fundamental concern over the present ability of the Appropriations Committees to insure the Smithsonian's full accountability to the Congress respecting both its Federal funds and its management of the heavy Federal investment in the Institution's assets. - 28 -

APPENDIX I Mr. Phillip S. Hughes May 16, 1977 Page 2 As you know, on May 13, 1977 the Audit Review Committee recommended and the Board of Regents authorized your employment as an outside consultant to conduct an independent study of the Smithsonian's relationship to the Federal Government. The study is to concentrate on a review and assessment of the GAO Report, the concerns that report has raised in the Congress, the Smithsonian's history, the body of laws under which it operates, and related matters. The purpose is to define the Institution's present charter and its relationship to the Congress and the Executive Branch, and to recommend whatever changes seem desirable to clarify those relationships and strengthen the Smithsonian's present charter and its accountability to the Congress. The goal, of course, is to identify opportunities for improvement while, at the same time, preserving the unique qualities that have made the Smithsonian such a source of national pride and achievement. The Audit Review Committee and the Board of Regents are highly pleased that you have made yourself available to perform this important study. As you know, we feel you are specially qualified to bring to the task the kind of experience, impartiality, scholarship and knowledge of government operations needed for the undertaking. The Executive Committee of the Board of Regents has been authorized to take such actions as may be necessary to engage your services, to enter into an appropriate arrangement for your compensation, and to provide such facilities, staff assistance, and additional consultant services as may be necessary. Mr. James E. Webb, the Chairman of the Executive Committee, is available to assist with these matters and will expect to hear from you. Pursuant to our earlier discussions, I understand that you will be available to devote full time to the study commencing July 5, 1977. In the meantime, and while your work proceeds, the Audit Review Committee, the Executive Committee and the Smithsonian staff will be available to assist you in every way possible. - 29 -

APPENDIX I Mr. Phillip S. Hughes May 16, 1977 Page 3 Again, I appreciate your willingness to undertake this review, and will be available throughout to be helpful in any way I can. Please do not hesitate to call me. Sincerely, [[signature]] Henry M. Jackson - 30 -

APPENDIX I May 20, 1977 Senator Henry M. Jackson Chairman, Audit Review Committee Board of Regents, Smithsonian Institution Dear Senator Jackson: Thank you for your letter of May 16, discussing the circumstances surrounding the Audit Review Committee's and Board of Regents' interest in and review of fundamental relationships between the Smithsonian Institution and the Federal Government, and setting forth the general framework for my work as a consultant on these matters. The framework established by your letter is entirely satisfactory with me. I will discuss the specific terms of my employment with Mr. James Webb, Chairman of the Executive Committee of the Board of Regents of the Smithsonian Institution, when he returns to the city. I don't expect any unusual circumstances or problems in this regard. I will schedule my work in such a manner as to enable me to complete it by the first of September, 1977. I look forward to working with you, and the Audit Review Committee on this interesting and important matter and hope that my efforts will be helpful in enabling the Smithsonian Institution to continue to perform its unique functions. Sincerely yours, /s/ Phillip S. Hughes Phillip S. Hughes 3509 Chevy Chase Lake Drive Chevy Chase, Maryland 20015 cc: Gwen Malone James Webb - 31 -

APPENDIX I [[image]] [[preprinted]] SMITHSONIAN INSTITUTION Washington, D.C. 20560 U.S.A. [[/preprinted]] June 2, 1977 Mr. Phillip S. Hughes 3509 Chevy Chase Lake Drive Chevy Chase, Maryland 20015 Dear Mr. Hughes: This is to confirm your appointment as a consultant to the Audit and Review Committee of the Board of Regents of the Smithsonian Institution to conduct an independent study of the Smithsonian's relationship to the Federal government, as requested by the Executive Committee of the Board of Regents. The study is to concentrate on a review and assessment of the GAO Report, the concerns that Report has raised in the Congress, the Smithsonian historical relationship with the Congress and the Executive Branch, and related matters. The purpose is to define the Institution's present charter and its relationship to the Congress and the Executive Branch, and to recommend whatever changes seem desirable to clarify those relationships and strengthen the Smithsonian's present charter and its accountability to the Congress. The goal is to identify opportunities for improvement while, at the same time, preserving the unique qualities that have made the Smithsonian such a source of national pride and achievement. It is my understanding that you plan to devote full time to the study beginning on July 5, 1977 and to present your report on or about September 1, 1977. Since you have stated that you wish to be paid only the difference between your current Federal retirement annuity and what would be paid were you still an Executive Level IV, your grade at the time of retirement, compensation for your services will be in the amount of $5,400, which amount is based on a period of nine weeks. Payment will be made upon presentation of the report. The Smithsonian Institution will provide such facilities, staff assistance, additional consultant services and any other necessary expenses to carry out this assignment. - 32 -

APPENDIX I -2- This letter contract is executed on behalf of the Executive Committee of the Board of Regents as authorized by the Board of Regents at its meeting on May 13, 1977. By copy of this litter the Secretary of the Smithsonian is authorized to administer this contract. Please be assured that the Secretary and the staff of the Smithsonian are available to provide whatever information and assistance you may require. Sincerely yours, /s/ James E. Webb James E. Webb Chairman, Executive Committee Board of Regents - 33 -

APPENDIX II LIST OF PERSONS CONTACTED DURING REVIEW OF THE SMITHSONIAN INSTITUTION [[underlined]] U.S. SENATORS [[/underlined]] The Honorable Henry M. Jackson Chairman, Permanent Subcommittee on Investigations, Governmental Affairs Committee; Chairman, Audit Review Committee, Board of Regents, Smithsonian Institution The Honorable Ted Stevens Ranking Minority Member, Subcommittee on the Department of Interior and Related Agencies, Committee on Appropriations [[underlined]] U.S. REPRESENTATIVES [[/underlined]] The Honorable John L. Burton Chairman, Subcommittee on Government Activities and Transportation, Committee on Government Operations The Honorable Elford A. Cederberg Ranking Minority Member, Committee on Appropriations; Member, Board of Regents, Smithsonian Institution The Honorable Joseph M. McDade Ranking Minority Member, Subcommittee on Interior, Committee on Appropriations The Honorable George H. Mahon Chairman, Committee on Appropriations; Member, Board of Regents, Smithsonian Institution The Honorable Lucien N. Nedzi Chairman, Subcommittee on Libraries and Memorials, Committee on House Administration The Honorable Sidney R. Yates Chairman, Subcommittee on Interior, Committee on Appropriations - 34 -

APPENDIX II [[underlined]] SENATE COMMITTEES' AND MEMBERS' STAFF William McWhorter Cochrane Staff Director, Committee on Rules and Administration Dwight E. Dyer Staff, Committee on Appropriations Owen J. Malone Chief Counsel, Permanent Subcommittee on Investigations, Governmental Affairs Committee Raymond N. Nelson Staff, Committee on Rules and Administration Linda L. Richardson Staff, Committee on Appropriations [[underlined]] HOUSE COMMITTEES' AND MEMBERS' STAFF Michael A. Forgash Administrative Assistant to the Honorable A. Cederberg Helen C. Hudson Staff Director, Subcommittee on Libraries and Memorials, Committee on House Administration Frederick G. Mohrman Staff, Subcommittee on Interior and Related Agencies, Committee on Appropriations Cynthia M. Mora Staff, Subcommittee on Government Activities and Transportation, Committee on Government Operations Byron S. Nielson Staff, Subcommittee on Interior and Related Agencies, Committee on Appropriations Edwin F. Powers Staff, Committee on Appropriations Robert S. Royer Counsel, Subcommittee on Libraries and Memorials, Committee on House Administration - 35 -

APPENDIX II [[underlined]] SMITHSONIAN INSTITUTION [[/underlined]] The Honorable Warren E. Burger Chief Justice of the United States; Chancellor of the Smithsonian Institution The Honorable James E. Webb Chairman, Executive Committee, Board of Regents, Smithsonian Institution The Honorable S. Dillon Ripley Secretary, Smithsonian Institution (and key Smithsonian staff members) [[underlined]] OTHERS--GOVERNMENT AND NON-GOVERNMENT [[/underlined]] The Honorable Elmer B. Staats Comptroller General of the United States (and certain GAO staff members working on the Smithsonian Institution) Mark W. Cannon Administrative Assistant to the Chief Justice of the United States Hugh F. Loweth Deputy Associate Director for Science and Energy Technology, Office of Management and Budget (and staff members working on the Smithsonian Institution) Charles Krause Formerly reporter, now on editorial staff, [[underlined]] The Washington Post [[/underlined]] Rodger A. Mastako Director, Hillwood Museum, Washington, D.C. Robert H. Simmons Consultant, Arlington, Virginia - 36 -

APPENDIX III S 72. Same; establishment; Board of Trustees (a) [[underline]] There is established in the Smithsonian Institution a bureau, which shall be directed by a board to be known as the Trustees of the National Gallery of Art, whose duty it shall be to maintain and administer the National Gallery of Art and site thereof and to execute such other functions as are vested in the board by sections 71, 72 to 74 and 75 of this title. [[/underline]] The board shall be composed as follows: The Chief Justice of the United States, the Secretary of State, the Secretary of the Treasury, and the Secretary of the Smithsonian Institution, ex officio; and five general trustees who shall be citizens of the United States, to be chosen as hereinafter provided. No officer or employee of the Federal Government shall be eligible to be chosen as a general trustee. S 80f. Woodrow Wilson International Center for Scholars: Board of Trustees of the Center. (a) Establishment. [[underline]] There is hereby established in the Smithsonian Institution a Woodrow Wilson International Center for Scholars and a Board of Trustees of the Center (hereinafter referred to as the "Center" and the "Board"), whose duties it shall be to maintain and administer the Center and site thereof and to execute such other functions as are vested in the Board by sections 80e to 80j of this title.[[/underline]] (b) Composition of the Board. The Board of Trustees shall be composed of fifteen members as follows: (1) the Secretary of State; (2) the Secretary of Health, Education, and Welfare; (3) the Chairman of the National Endowment for the Humanities; (4) the Secretary of the Smithsonian Institution; (5) the Librarian of Congress; (6) the Archivist of the United States; (7) one appointed by the President from time to time from within the Federal Government; and (8) eight appointed by the President from private life. - 37 -

APPENDIX III § 76h. Bureau, Board of Trustees, and Advisory Committee-Establishment of bureau; direction by Board of Trustees; composition of Board (a) [[underlined]] There is hereby established in the Smithsonian Institution a bureau, which shall be directed by a board to be known as the Trustees of the John F. Kennedy Center for the Performing Arts (hereafter in sections 76h to 76q of this title referred to as the "Board") whose duty it shall be to maintain and administer the John F. Kennedy Center for the Performing Arts and site thereof and to execute such other functions as are vested in the Board by sections 76h and 76q of this title. [[/underlined]] The Board shall be composed as follows: the Secretary of Health, Education, and Welfare, the Librarian of Congress, the Assistant Secretary of State for Public Affairs, the Chairman of the Commission of Fine Arts, the President of the Board of Commissioners of the District of Columbia, the Chairman of the District of Columbia Recreation Board, the Director of the National Park Service, the Commissioner of the United States Office of Education, the Secretary of the Smithsonian Institution, three Members of the Senate appointed by the President of the Senate, and three Members of the House of Representatives appointed by the Speaker of the House of Representatives ex officio; and thirty general trustees who shall be citizens of the United States, to be chosen as hereinafter provided. ________ Above underscoring provided for emphasis. - 38 -

APPENDIX IV [[underline]] PRELIMINARY DRAFT:[[/underline]] Prepared by the Staff for the approval of the Secretary and the Board of Regents [[line]] September 21, 1977 SMITHSONIAN INSTITUTION POLICIES AND PROCEDURES GOVERNING THE USE OF APPROPRIATED FUNDS; CONTRACTS AND GRANTS; AND TRUST FUNDS [[line]] The Act of August 10, 1846 (20 U.S.C. S41 et seq.), which established the Smithsonian Institution, provided for its governance by an independent Board of Regents. The Regents were given broad authority to receive and disburse funds of the Institution "as they shall deem best suited for the promotion of the purpose of the testator." They were also directed to make provision for collections, exhibitions, library and research functions, and facilities for public education. The funds of the Institution, which originated with the bequest by James Smithson to the United States for "the increase and diffusion of knowledge among men," have been augmented through the years by gifts and bequests, grants and contracts, and the revenue-producing activities of the Institution itself. Many of the activities which implement the trust are substantially funded by Federal appropriations. All funds of the Institution, both public and those held in trust, are administered by the Secretary, under the direction of the Board of Regents, subject to the terms and conditions required by their sources. Status reports on the financial condition of the Smithsonian and on the progress of particular programs or projects funded with trust and other funds are provided to the Regents' Executive Committee and to the full Board at its regular meetings. - 39 -

APPENDIX IV -2- [[underlined]] SOURCES OF SUPPORT [[/underlined]] The Institution has three major sources of support: Federal appropriations, Federal grants and contracts, and non-Federal trust funds. The trust funds are further divided into restricted and unrestricted categories. Federal Appropriations Federal funds are sought and received through the regular budget and appropriations processes, and are expended in compliance with Government regulations. The administration of these funds, delegated by the Board of Regents to the Secretary, includes adherence to specific legislative authority, conformance to standard Government personnel procedures, and observance of Federal procurement and accounting regulations. Traditionally, funds have been requested by the Institution for programs authorized by the Board of Regents, and approval has been received for their use in support of basic research; the acquisition, care, maintenance, exhibition, and study of the national collections; construction, renovation, and repair of facilities; and protection of the buildings and collections under the jurisdiction of the Smithsonian. Funds derived directly from Congressionally approved appropriation are the largest single source of funds available to the Institution. They were initially provided in 1857, at which time they constituted 30% of total operating expenses, and reached their highest proportion, 91%, in 1907. In the current decade, Federal appropriations have ranged between 64% and 76% of the Smithsonian's operating budget, and in 1976 accounted for 66%. - 40 -

APPENDIX IV -3- Federal Grants and Contracts For the past thirty years funds received by means of Federal grants and contracts have been a significant factor in institutional operations. Generally, Smithsonian personnel seek and receive grants and contracts from Government agencies and departments to assist in financing specific research and educational projects that are related to the mission of the Institution and in consonance with programs outlined by the Board of Regents. Occasionally, an agency or department has requested the Smithsonian to perform specific kinds of work because of its expertise in a given area, the availability of key research people, or its ability to respond quickly to certain kinds of needs. Such requests have been honored and carried out by grant or contract when they could be accommodated within the limits of available time, personnel, and existing programmatic priorities. Grant and contract funds are made available to the Smithsonian as an educational institution; administered through the Institution's restricted trust funds accounts; and expended for purposes of the individual grant or contract in accordance with terms and conditions required by law and regulation and as agreed to between the parties. In 1976 Federal grant and contract funds accounted for 9% of the Smithsonian's operating budget. Trust Funds [[underline]] Restricted Trust Funds [[/underline]] consist of gifts, grants, endowments, and other income designated for specific projects and purposes by the donor. The Freer fund is the largest example in this category, being - 41 -

APPENDIX IV -4- strictly controlled under the terms of the original gift and bequest for the sole use of the Gallery. [[underline]] Unrestricted Trust Funds [[/underline]] are made available for the Institution's use from a variety of sources. These sources include interest on the Smithson bequest; income from short and long-term investments; concessions such as food service and parking; royalities from sales of Smithsonian products designed from objects in the collections; the Resident and National Associates' programs (including the Smithsonian Magazine) and activities such as the Muesum Shops. They also include unrestricted gifts or bequests of funds. [[underline]]POLICIES AND PROCEDURES FOR THE USE OF TRUST FUNDS [[/underline]] The policies and procedures which have been developed for the use of trust funds may be summarized as follows. Significant changes in these policies will be approved by the Executive Committee of the Board of Regents, and, if necessary, the full Board, and following such approval will be made known to the Office of Management and Budget and the Congress. --Annual income budgets are prepared in detail for each of the sources of trust funds and expense budgets for all recipient programs, activities, and organizations. The trust fund budgets are consolidated for review by Smithsonian management and approval by the Board of Regents. This budget is developed in coordination with Federal budget planning and allocations, particularly in those instances where both appropriated and trust funds are used to support an organization unit or program. -42-

APPENDIX IV -5- -- Separate financial accounts are maintained, reports prepared, and results monitored and projected to assure that trust funds are used for approved purposes and in an effective manner. Plans and budgets for the current and budget years are communicated in a timely and comprehensive way to the Office of Management and Budget and the Congress for their review as part of the Federal appropriations' process. Special attention will be given to any proposed expenditures of trust funds which may result in a significant requirement for future Federal dollars. Any special unanticipated requirement to use major amounts of trust funds for an activity usually supported with Federal appropriations will be discussed with OMB and the appropriation subcommittees. -- Personnel hiring and employment practices, and the procurement of goods and services financed by trust funds are consonant with sound management policies and procedures, and include where appropriate for administrative consistency and simplicity, the application of guidelines established for the use of Federal funds. As has been customary, trust fund employees are paid at rates commensurate with those of Federal employees. Funding for employment is determined through the budget process and employees are paid from the source(s) of funds available to their parent organization units or programs with the few exceptions specifically approved by the Secretary. -- Management and administrative services units of the Institution, such as legal counsel, accounting, payroll, personnel, supply, and others, are staffed and otherwise supported in part from - 43 -

APPENDIX IV -6- Federal funds, and in part from trust funds, including funds resulting from overhead recovery on grants and contracts and from administrative fees. This procedure produces a ratio of Federal and trust fund administrative support approximately in proportion to the operating program expenditures of the Institution as a whole. -- The auxiliary activities staff, and other operating expenses, such as those of the Smithsonian Magazine and the Museum Shops, are met from the earned income of these activities. Where losses are budgeted for certain of these activities, they are more than offset by the gains of others. Other activities, such as the Traveling Exhibition Service and Performing Arts, usually included in the "auxiliary" category of the trust funds budget because they also have earned income, receive appropriated funds specifically provided by the Congress. In the past decade the trust funds of the Institution have ranged between 8% and 25% of its total operating budget. Only in 1975 and 1976 have they exceeded 20%. This has been due in substantial measure to the wide acceptance of Smithsonian Magazine by subscribers and advertisers which has generated sums of unrestricted funds previously unavailable. [[underlined]] USES OF NET UNRESTRICTED TRUST FUND INCOME [[/underlined]] With the approval of the Board of Regents, the unrestricted trust fund income remaining after meeting the expenses of the auxiliary activities and a share of general administration shall be allocated to purposes and programs on the basis of carefully - 44 -

APPENDIX IV -7- considered needs and opportunities, fund availability, and projections of future economic and other conditions. A portion of the net income of certain of the auxiliary activities, such as the shops, concessions, and product development programs, is allocated to the museums and galleries in recognition of their participation in the planning, development, and administration of these efforts. Although these are unrestricted funds in the broad sense, their use is limited primarily to purchases for the collections, exhibitions, and publications, and their expenditure is determined in consultation with the individual bureau director and annual budgets for such funds are prepared for the approval of Smithsonian management. Other funds available to the bureaux result from activities such as the operation of the parking facility at the National Zoological Park and the film and planetarium showings at the National Air and Space Museum. These funds are dedicated to particular needs such as parking improvements, replacement films, and educational publications. The Regents first priority for the allocation of remaining trust funds is the development of the Institution's relatively small unrestricted endowment fund. Income from that fund will be used to strengthen the financial position of the Smithsonian against continuing inflation and unpredictable economic change. The Regents anticipate adding to this endowment each year to produce investment income sufficient to offset increased costs of program operations which are dependent on trust funds. - 45 -

APPENDIX IV -8- After provision for endowment growth, funds are made available for projects in the areas of major purchases for the collections, research opportunities, and the extension of popular education activities, including public television, publications, and regional Associate presentations. Such allocations take into account the appropriated funds, if any, available for particular activities or projects. Other trust fund allotments, usually of small amounts, are made to the bureaux and offices for special events associated with exhibit openings and similar public presentations, or other purposes where it is determined that there are special needs or opportunities. Physical plant improvements are funded with appropriated funds except on infrequent occasions where it is determined that the nature of the property, type of improvement, or the urgency of the need makes it appropriate to use trust funds. [[underlined]] ACCOUNTABILITY [[/underlined]] Preservation of the Smithsonian's unique characteristics and its program flexibility derived from having a number of important sources of funds requires that the Institution account fully for the funds available to it and the activities entrusted to it. A report is submitted annually to the Congress on the activities and the condition of the Institution and includes complete financial reports on all funding sources. Federal funds are subject to audit by the General Accounting Office, and the trust funds are audited each year by certified public accountants whose findings - 46 -

APPENDIX IV -9- are included in the annual report to Congress. The Defense Contract Audit Agency reviews the Smithsonian's management of and accounting for Federal grants and contracts and approves the allocation of related administrative expenses. In addition to these regular reports and reviews the Board of Regents, as a matter of policy, makes available to the Congress and to officers of appropriate Executive Branch agencies budget documents and materials related to the trust funds of the Institution for review and consideration. -47-

APPENDIX V [[underlined]] Smithsonian Institution Income 1850-1977 (Est.) [[/underlined]] (in thousands) [[8-column table]] [[headers]] [[underlined]]YEAR[[/underlined]] | | | [[span 4 columns]]TRUST FUNDS[[/span 4 columns]] | | | | | [[span 2 columns]]Auxiliary Activities[[/span 2 columns]] | | | Total* | Federal S&E** | Unrestricted | Gross Inc. | Expenses | Restricted | Federal Agency Gr. & Contracts [[/headers]] | | | | | | | 1850 | 51 | -0- | 51 | - | | - | -0- | | | | | | | 1860 | 43 | 4 | 39 | - | - | - | -0- | | | | | | | 1870 | 49 | 4 | 45 | - | # - | - | -0- | | | | | | | 1880 | 97 | 55 | 42 | - | # - | - | -0- | | | | | | | 1890 | 341 | 285 | 46 | - | # - | 10 | -0- | | | | | | | 1900 | 453 | 392 | 53 | - | # - | 8 | -0- | | | | | | | 1910 | 885 | 779 | 60 | - | # - | 46 | -0- | | | | | | | 1920 | 814 | 692 | 69 | - | # - | 53 | -0- | | | | | | | 1930 | 1,813 | 1,251 | 80 | - | - | 482 | -0- | | | | | | | 1940 | 1,758 | 1,295 | 99 | - | - | 364 | -0- | | | | | | | 1950 | 3,787 | 3,190 | 119 | 34 | 34 | 427 | 17 | | | | | | | 1960 | 14,415 | 9,005 | 364 | 123 | 123 | 766 | 4,157 1965 | 30,686 | 17,516 | 400 | 464 | 464 | 1,242 | 11,064 1966 | 35,525 | 20,974 | 523 | 660 | 660 | 1,805 | 11,563 1967 | 44,415 | 24,989 | 987 | 781 | *** 781 | 1,726 | 15,932 1968 | 42,377 | 26,784 | 468 | 2,175 | 2,471| 1,428 | 11,522 1969 | 47,430 | 29,150 | 790 | 3,035 | 3,491 | 2,929 | 11,526 1970 | 50,835 | 32,679 | 854 | 4,052 | 5,093 | 3,457 | 9,793 1971 | 55,990 | 36,895 | 1,858 | 4,706 | 5,240 | 3,214 | 9,317 1972 | 66,174 | 46,301 | 1,411 | 6,445 | 6,586 | 4,169 | 7,848 1973 | 76,947 | 53,233 | 843 | 8,483 | 8,313 | 5,361 | 9,027 1974 | 89,520 | 60,563 | 1,987 | 12,735 | 10,965 | 4,267 | 9,968 1975 | 112,602 | 72,511 | 2,407 | 18,802 | 16,494 | 6,537 | 12,345 1976 & Trans. Qtr. | 168,545 | 106,654 | 4,112 | 34,483 | 29,946 | 7,788 | 15,508 1977 (E) | 143,956 | 85,236 | 2,780 | 39,440 | 32,640 | 5,300 | 11,200 [[/8-column table]] * Includes Auxiliary Activities Cost of Sales. ** Includes SSIE; Excludes Foreign Currency, R&R, Construction Appropriations. *** Prior to 1968 expenses allocable to Auxiliary Activities cannot be readily identified; breakeven is assumed. # Not included in total -48-

SMITHSONIAN INSTITUTION Proceedings of the Meeting of the Board of Regents September 25, 1978 SUMMARY OF PROCEEDINGS Report of Executive Committee Careful advance review of agenda items by Executive Committee as matters strongly affect future operations of Regents. Consideration of financial reports resulted in decision to prepare a consolidated budget of all resources of Institution; clarification of nomenclature used in financial reports; review of federal appropriations enactment and authority of the Secretary to expend funds; review by Regents of budget allocations from nonappropriated funds showing support recommended by Secretary from all other funds and Regents' approval of substantial reprogramming of funds; and consideration of the level of endowment funds of the Institution. These matters discussed in detail as indicated below. Financial Report -- Set forth in detail for fiscal years 1977-1980 summaries of all funds provided and applied as well as consolidated budgets for fiscal years 1978-1980. (Schedules A to G) -- Federal Supplemental Appropriation requests for pay raise 95% approved ($4,900,000) and $580,000 of $1,100,000 request approved for increased utility costs. -- Nonappropriated trust funds results projected at higher level based on increased level of auxiliary activities income. Institution can provide for full approved $2 million acquisition-research-educational outreach program, addition of $1 million to tax reserve, plus $3 million to unrestricted endowment funds. -- Sale of Seidell bequest property resulted in transfer of $1,165,000 to restricted purpose endowment fund. -- Congressional Joint Conference Committee action on f.y. 1979 appropriations indicates total Salaries & Expenses appropriation of $108,577,000, compared to $104,500,000 in f.y. 1978. Previous cuts in appropriation restored by Senate action included $390,000 for Research Awards Program, $150,000 for Chesapeake Bay Center Laboratory construction, $75,000 for acquisition of books and publications, and $57,000 for National Collection of Fine Arts exhibits. -- Termination of the corporate status of Smithsonian Science Information Exchange and its transfer to Department of Commerce (NTIS) underway with deadline of July 1, 1979.

-ii- --Nonappropriated funds budget provides for assumption of $1 million of operating expenses currently paid by appropriated funds. --Overhead rates expected to increase in fiscal year 1979 reflecting higher administrative costs caused by legislated pay increases, administrative staff additions and added rental charges. --Resolutions regarding appropriated and nonappropriated funds budgets: VOTED that the Board of Regents authorizes the Secretary to expend fiscal year 1979 Federal appropriations as approved by the President on October 17, 1978 (P.L. 95-465). VOTED that the Board of Regents approves the budget of the nonappropriated funds for fiscal year 1979 as outlined above, and authorizes expenditures by the Secretary in accordance therewith; any material changes in program plans incorporated in the budget, together with any changes of more than 10% or $250,000 in any line item or in the total administrative expenditures shall be made only with the approval of the Board of Regents or its Executive Committee. Subsequent to the meeting, the Chairman of the Executive Committee and the Secretary concluded that the intent of the Board as expressed at the meeting would be best served by the following: 1. transfer to unrestricted endowment limited to $3 million. Remaining $2 million set aside for $1 million pledge toward Stuart portraits, should funds be needed; additional funding toward Board's five-year commitment for collections acquisitions; 2. reduction to $2 million of fiscal year 1979 transfer to endowment to permit funding of $1 million of expenses currently funded by federal appropriations. --Fiscal year 1980 federal budget estimates and nonappropriated fund estimates reviewed. Detail included major items such as Museum Support Center construction, NMHT sixth floor library, and foreign currency Moenjodaro project. Resolution adopted:

-iii- VOTED that the Board of Regents approves the Smithsonian Institution budget for fiscal year 1980 for presentation to the Office of Management and Budget in September 1978. [[underlined]] Five-Year Perspective: Income and Expenditure Projections [[/underlined]] Budget projection supporting five-year perspective review indicated no major programs contemplated. Narrative document not to be transmitted at this time. VOTED that the Board of Regents approves the submission of the projected federal and trust fund income and expenditures for fiscal years 1980 to 1984 as requested by the Office of Management and Budget and by the Senate and House Appropriations Subcommittees, to be used in conjunction with the fiscal year 1980 appropriation request. [[underlined]] Nonappropriated Funds Policy [[/underlined]] Policy statement on Use of Nonappropriated Funds revised in accordance with views expressed by Regents. Subsequent review and concurrence received from Regents. Resolution approved: VOTED that the foregoing statement of use of nonappropriated funds shall be transmitted to the Office of Management and Budget, and the Committees on Appropriations of the House of Representatives and the Senate. [[underlined]] Transfer of NASM Lindbergh Chair Funds [[/underlined]] Financing for Lindbergh Chair of Aerospace History to be obtained from net revenues from the National Air and Space Museum shop and cafeteria. Resolution approved as follows: VOTED that the Secretary is authorized to establish, as a part of the Institution's endowment funds, a designated fund to be known as the Lindbergh Chair of Aerospace History Endowment; that the transfer into this endowment fund of monies currently set aside for this purpose is authorized; and that such further transfers as may be possible from National Air and Space Museum discretionary trust funds into this endowment fund may be made, until the principal attains a level of $900,000.

-iv- [[underlined]]Purchase of Stuart Portraits[[/underlined]] In recognition of unique opportunity to purchase the Stuart portraits of George and Martha Washington from the Athenaeum, the Executive Committee approved the following motion: VOTED that the Executive Committee of the Board of Regents authorizes the Secretary to pledge $1 million of currently available unrestricted trust funds toward the purchase of the portraits of George and Martha Washington by Gilbert Stuart. Agreeing with the Executive Committee's resolution, the Regents stated that conditions of the sale are expected to pose no unworkable requirements on the Institution. [[underlined]]Opening Meetings of Board of Regents to Public[[/underlined]] Discussion concerning public open meetings of the Board of Regents, as suggested by the press and members of Congress, disclosed differing points of view of Regents. Consensus of meeting was to continue present policy for now and to give detailed consideration to this matter at next meeting of Regents in January 1979. [[underlined]] Smithsonian Experience Books [[/underlined]] Regents Executive Committee confirmed proceeding with the publications [[underlined]] The Smithsonian Book of Inventions [[/underlined]] and [[underlined]] The Magnificent Foragers [[/underlined]]. Financial forecasts included. Plans for future publications approved in following resolution. VOTED that the Board of Regents authorizes the Secretary to proceed with preparation of appropriate material in order to test the books on The American Land and The National Zoo. Authority for final approval of the publication of these titles is contingent upon the satisfactory market analysis presentation to be received and approved by the Executive Committee of the Board of Regents. [[underlined]] Smithsonian Support of Outside Scientific and Cultural Organizations [[/underlined]] Smithsonian for many years has collaborated with various organizations in pursuance of research, some of which have been given subventions by the Institution. Organizations listed receive varying amounts of funds. A request was approved by the Regents, as described in the following motion, to add another such organization: VOTED that the Board of Regents approved an annual trust fund subvention of $5,000 to the International Council for Bird Preservation, subject to review at the end of five years.

-v- [[underlined]] Hirshhorn Trustees Resolution of Appreciation and Gift of Securities [[/underlined]] The Board of Trustees of the Hirshhorn Museum and Sculpture Garden unanimously adopted the following resolution of appreciation in the Regents: [[block indent]] WHEREAS the Board of Trustees of the Joseph H. Hirshborn Museum and Sculpture garden is deeply appreciative of the action taken by the Board of Regents on January 16, 1978 in establishing a Collections Acquisitiion Program to enable the Museum to acquire important works of art that will add significantly to the quality and comprehensiveness of its collection and which would otherwise be beyond its available means to acquire; be it RESOLVED that the Board hereby expresses its gratitude to the Board of Regents for its establishment of this Program and for its welcome encouragement of the Museum's effort to deepen and strengthen its collection. [[/block indent]] A number of members of the Board of Trustees have given grants of funds to the Hirshhorn which will serve as matching funds for the acquisition program. One of the gifts required approval of the Regents to accept restricted securities. The following motion was approved: [[block indent]] VOTED that the Board of Regents authorizes the Secretary to accept a gift of restricted securities from Mr. and Mrs. Sydney Lewis for the programs of the Hirshhorn Museum, and further authorizes the Secretary to take appropriate steps to sell said securities in full compliance with the Securities Act of 1933, in order to carry out the terms of the gift. [[/block indent]] [[underlined]] Acquisition of Privately Owned Land at National Zoological Conservation and Research Centre in Front Royal, Virginia [[/underlined]] A 52-acre privately owned enclave at the National Zoo Conservation and Research Center at Front Royal is sought to be purchased by the Smithsonian to avoid development of homesites adjacent to our preserve. The various owners are amenable to selling and the Institution is requiring that certain conditions be met. The Regents approved the following motion:

-vi- [[block indent]] VOTED that the Board of Regents authorizes the Secretary to negotiate with the present owners of 52 acres of land at Front Loyal, Virginia, as described above, and to buy the land at a cost not to exceed $110,000, provided that the Congress be appropriately informed of these purchase plans and given an opportunity to respond prior to any final commitment being made. [[/block indent]] [[underlined]] Court Case Pending [[/underlined]] The status of the pending [[underlined]] Petition for Instruction [[/underlined]] was included for information. [[underlined]]Smithsonian Administrative Matters[[/underlined]] -- Role of Under Secretary defined and position description attached. -- Organization review resulted in transfer of three units to Assistant Secretary for Administration. [[underlined]]Status Reports[[/underlined]] Reports on ongoing projects sent to Regents in advance of meeting. Included: -- Status of Smithsonian Television Program (discussed at meeting -- Sale of Seidell Building -- Mail Order Fulfillment Center, Newington, Va. -- Allocation of Collection Acquisition, Research, and Outreach Program Trust Funds -- Collections Management Study -- Status of Legislation -- Trade (Tariff) Commission Building -- Mall Underground Parking -- Status of Personnel Recruitments -- Litigation Report -- Construction Projects -- Selected Studies Program of the National Associates -- Smithsonian Symposia and Seminars -- New Research Vessel for STRI [[underlined]] New Business [[/underlined]] -- Establishment of fixed meeting dates -- Consideration of limitation of terms of citizen Regents [[underlined]] Citation to Congressman George H. Mahon [[/underlined]] Mr. Mahon, who is retiring from the House of Representatives at the end of this session, was presented a gift and citation for his distinguished service as a dedicated member of the Board of Regents since 1964 and for the profound effect his leadership has had on our Nation through 44 years in the Congress of the United States.

-vii- [[underlined]] Chancellor's Dinner [[/underlined]] The Chancellor held a dinner on evening preceding Regents' meeting at the Supreme Court in honor of James E. Webb, whose dedication as a Regent has been so noteworthy. The Regents at this meeting voted unanimously to send the Chancellor a special message, as follows: VOTED that the Board of Regents expresses its gratitude to the Chancellor of the Smithsonian Institution for an historic reception and dinner at the Supreme Court. This occasion was particularly fitting in honoring the exceptional services of James E. Webb, Chairman of the Executive Committee. [[underlined]]Next Meetings[[/underlined]] Executive Committee: Monday, December 18, 1978 Regents Dinner: Sunday, January 21, 1979, at home of the Vice President Regents Meeting: Monday, January 22, 1979, Regents Room, 8:30 a.m.

[[underlined]] ADMINISTRATIVELY CONFIDENTIAL [[/underlined]] [No part of these minutes is to be divulged unless specifically authorized by the Secretary.] SMITHSONION INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS September 25, 1978 [[underlined]] INDEX [[/underlined]] [table, 2 columns]] [[blank]] | [[underlined]]Page[[/underlined]] Summary of Proceedings | i - vii Attendance | 1 Minutes of Meeting May 5, 1978 | 2 Report of the Executive Committee | 2 Financial Report | 7 Five-Year Perspective: Income and Expenditure Projections | 29 Use of Nonappropriated Funds | 68 Lindbergh Chair of Aerospace History | 77 Stuart Portraits of George and Martha Washington | 79 Opening Meetings of the Board of Regents | 83 Smithsonian Exposition Books | 85 Smithsonian Support of other Scientific Organizations | 89 Resolution of Appreciation to Board of Regents | 94 Gift of Securities to the Hirshhorn Museum | 95 Opportunity to acquire private land surrounded by the National Zoo Conservation and Research Center in Front Royal, Virginia | 97 Seward Johnson--Smithsonian Institution: Petition for Instruction | 100 Smithsonian Administrative Matters | 103 Update of Status Reports | 106 Status of Smithsonian Television Program | 108 Sale of Seidell Building | 109 Mail Order Fulfillment Center | 111

SMITHSONIAN INSTITUTION Proceedings of the Meeting of the Board of Regents September 25, 1978 [[underlined]] SUMMARY OF PROCEEDINGS [[/underlined]] [[underlined]]Report of Executive Committee [[/underlined]] Careful advance review of agenda items of Executive Committee as matters strongly affect future operations of Regents. Consideration of financial reports resulted in decision to prepare a consolidated budget of all resources of Institution; clarification of nomenclature used in financial reports; review of federal appropriations enactment and authority of the Secretary to expend funds; review by Regents of budget allocations from nonappropriated funds showing support recommended by Secretary from all other funds and Regents' approval of substantial reprogramming of funds; and consideration of the level of endowment funds of the Institution. These matters discussed in detail as indicated below. [[underlined]] Financial Report [[/underlined]] -- Set forth in detail for fiscal years 1977-1980 summaries of all funds provided and applied as well as consolidated budget for fiscal years 1978-1980. (Schedules A to G) -- Federal Supplemental Appropriation requests for pay raise 95% approved ($4,900,000) and $580,000 of $1,100,000 request approved for increased utility costs. -- Nonappropriated trust funds results projected at higher level based on increased level of auxiliary activities income. Institution can provide for full approved $2 million acquisition-research-educational outreach program, addition of $1 million to tax reserve, plus $3 million to unrestricted endowment funds. -- Sale of Seidell bequest property resulted in transfer of $1,165,000 to restricted purpose endowment fund. -- Congressional Joint Conference Committee action on f.y. 1979 appropriations indicates total Salaries & Expenses appropriation of $108,577,000, compared to $104,500,000 in f.y. 1978. Previous cuts in appropriation restored by Senate action included $390,000 for Research Awards Program, $150,000 for Chesapeake Bay Center Laboratory construction, $75,000 for acquisition of books and publications, and $57,000 for National Collection of Fine Arts exhibits. -- Termination of the corporate status of Smithsonian Science Information Exchange and its transfer to Department of Commerce (NTIS) underway with deadline of July 1, 1979.

-ii- -- Nonappropriated funds budget provides for assumption of $1 million of operating expenses currently paid by appropriated funds. -- Overhead rates expected to increase in fiscal year 1979 reflecting higher administrative costs caused by legislated pay increases, administrative staff additions and added rental charges. -- Resolutions regarding appropriated and nonappropriated funds budgets: VOTED that the Board of Regents authorizes the Secretary to expend fiscal year 1979 Federal appropriations as approved by the President on October 17, 1978 (P.L. 95-465). VOTED that the Board of Regents approves the budget of the nonappropriated funds for fiscal year 1979 as outlined above, and authorizes expenditures by the Secretary in accordance therewith; any material changes in program plans incorporated in the budget, together with any changes of more than 10% or $250,000 in any line item or in the total administrative expenditures shall be made only with the approval of the Board of Regents or its Executive Committee. Subsequent to the meeting, the Chairman of the Executive Committee and the Secretary concluded that the intent of the Board as expressed at the meeting would be best served by the following: 1. transfer to unrestricted endowment limited to $3 million. Remaining $2 million set aside for $1 million pledge toward Stuart portraits, should funds be needed; additional funding toward Board's five-year commitment for collections acquisitions; 2. reduction to $2 million of fiscal year 1979 transfer to endowment to permit funding of $1 million of expenses currently funded by federal appropriations. -- Federal year 1980 federal budget estimates and nonappropriated fund estimates reviewed. Detail included major items such as Museum Support Center construction, NMHT sixth floor library, and foreign currency Moenjodaro project. Resolution adopted:

-iv- [[underlined]] Purchase of Stuart Portraits [[/underlined]] In recognition of unique opportunity to purchase the Stuart portraits of George and Martha Washington from the Athenaeum, the Executive Committee approved the following motion: VOTED that the Executive Committee of the Board of Regents authorizes the Secretary to pledge $1 million of currently available unrestricted trust funds toward the purchase of the portraits of George and Martha Washington by Gilbert Stuart. Agreeing with the Executive Committee's resolution, the Regents stated that conditions of the sale are expected to pose no unworkable requirements on the Institution. [[underlined]] Opening Meetings of Board of Regents to Public [[/underlined]] Discussion concerning public open meetings of the Board of Regents, as suggested by the press and members of Congress, disclosed differing points of view of Regents. Consensus of meeting was to continue present policy for now and to give detailed consideration to this matter at next meeting of Regents in January 1979. [[underlined]] Smithsonian Experience Books [[/underlined]] Regents Executive Committee confirmed proceeding with the publications [[underlined]] The Smithsonian Book of Inventions [[/underlined]] and [[underlined]] The Magnificent Foragers [[/underlined]]. Financial forecasts included. Plans for future publications approved in following resolution: VOTED that the Board of Regents authorizes the Secretary to proceed with preparation of appropriate material in order to test the books on The American Land and The National Zoo. Authority for final approval of the publication of these titles is contingent upon the satisfactory market analysis presentation to be received and approved by the Executive Committee of the Board of Regents. [[underlined]] Smithsonian Support of Outside Scientific and Cultural Organizations [[/underlined]] Smithsonian for many years has collaborated with various organizations in pursuance of research, some of which have been given subventions by the Institution. Organizations listed receive varying amounts of funds. A request was approved by the Regents, as described in the following motion, to add another such organization: VOTED that the Board of Regents approves an annual trust fund subvention of $5,000 to the International Council for Bird Preservation, subject to review at the end of five years.

-v- [[underlined]] Hirshhorn Trustees Resolution of Appreciation and Gift of Securities [[/underlined]] The Board of Trustees of the Hirshhorn Museum and Sculpture Garden unanimously adopted the following resolution of appreciation to the Regents: WHEREAS the Board of Trustees of the Joseph H. Hirshhorn Museum and Sculpture Garden is deeply appreciative of the action taken by the Board of Regents of the Smithsonian Institution on January 16, 1978 in establishing a Collections Acquisition Program to enable the Museum to acquire important works of art that will add significantly to the quality and comprehensiveness of its collection and which would otherwise be beyond its available means to acquire; be it RESOLVED that the Board hereby expresses its gratitude to the Board of Regents for its establishment of this Program and for its welcome encouragement of the Museum's effort to deepen and strengthen its collection. A number of members of the Board of Trustees have given grants of funds to the Hirshhorn which will serve as matching funds for the acquisition program. One of the gifts required approval of the Regents to accept restricted securities. The following motion was approved: VOTED that the Board of Regents authorizes the Secretary to accept a gift of restricted securities from Mr. and Mrs. Sydney Lewis for the programs of the Hirshhorn Museum, and further authorizes the Secretary to take appropriate steps to sell said securities in full compliance with the Securities Act of 1933, in order to carry out the terms of the gift. [[underlined]] Acquisition of Privately Owned Land at National Zoological Conservation and Research Center in Front Royal, Virginia [[/underlined]] A 52-acre privately owned enclave at the National Zoo Conservation and Research Center at Front Royal is sought to be purchased by the Smithsonian to avoid development of homesites adjacent to our preserve. The various owners are amenable to selling and the Institution is requiring that certain conditions be met. The Regents approved the following motion:

-vi- VOTED that the Board of Regents authorizes the Secretary to negotiate with the present owners of 52 acres of land at Front Royal, Virginia, as described above, and to buy the land at a cost not to exceed $110,000, provided that the Congress be appropriately informed of these purchase plans and given an opportunity to respond prior to any final commitment being made. [[underlined]] Court Case Pending [[/underlined]] The status of the pending [[underlined]] Petition for Instruction [[/underlined]] was included for information. [[underlined]] Smithsonian Administrative Matters [[/underlined]] -- Role of Under Secretary defined and position description attached. -- Organization review resulted in transfer of three units to Assistant Secretary for Administration. [[underlined]] Status Reports [[/underlined]] Reports on ongoing projects sent to Regents in advance of meeting. Included: -- Status of Smithsonian Television Program (discussed at meeting) -- Sale of Seidell Building -- Mail Order Fulfillment Center, Newington, Va. -- Allocation of Collection Acquisition, Research, and Outreach Program Trust Funds -- Collections Management Study -- Status of Legislation -- Trade (Tariff) Commission Building -- Mall Underground Parking -- Status of Personnel Recruitments -- Litigation Report -- Construction Projects -- Selected Studies Program of the National Associates -- Smithsonian Symposia and Seminars -- New Research Vessel for STRI [[underlined]] New Business [[/underlined]] -- Establishment of fixed meeting dates -- Consideration of limitation of terms of citizen Regents [[underlined]] Citation to Congressman George H. Mahon [[/underlined]] Mr. Mahon, who is retiring from the House of Representatives at the end of this session, was presented a gift and citation for his distinguished service as a dedicated member of the Board of Regents since 1964 and for the profound effect his leadership has had on our Nation through 44 years in the Congress of the United States.

-vii- [[underlined]] Chancellor's Dinner [[/underlined]] The Chancellor held a dinner on evening preceding Regents' meeting at the Supreme Court in honor of James E. Webb, whose dedication as a Regent has been so noteworthy. The Regents at this meeting voted unanimously to send the Chancellor a special message, as follows: VOTED that the Board of Regents expresses its gratitude to the Chancellor of the Smithsonian Institution for an historic reception and dinner at the Supreme Court. The occasion was particularly fitting in honoring the exceptional services of James E. Webb, Chairman of the Executive Committee. [[underlined]] Next Meetings [[/underlined]] Executive Committee: Monday, December 18, 1978 Regents Dinner: Sunday, January 21, 1979, at home of the Vice President Regents Meeting: Monday, January 22, 1979, Regents Room, 8:30 a.m.

SMITHSONIAN INSTITUTION PROCEEDINGS OF THE MEETING OF THE BOARD OF REGENTS September 25, 1978 [[underlined]] Attendance [[/underlined]] The meeting of the Board of Regents was held in the Regents Room of the Smithsonian Institution Building and was called to order by Mr. Webb, Chairman of the Executive Committee at 8:30 a.m. on September 25, 1978. Present were: James E. Webb, Chairman, Executive Committee Anne L. Armstrong J. Paul Austin John Nicholas Brown Caryl P. Haskins Judge A. Leon Higginbotham Thomas J. Watson, Jr. Senator Henry M. Jackson Senator Barry Goldwater Senator Robert B. Morgan Representative Elford A. Cederberg Representative George H. Mahon Representative Leo J. Ryan S. Dillon Ripley, Secretary The Vice President, Walter F. Mondale, the Chancellor, Chief Justice Warren E. Burger, William A.M. Burden and Murray Gell-Mann were unable to attend as had been indicated in advance. Also present were Under Secretary Michael Collins, Assistant Secretaries John F. Jameson, Charles Blitzer, David Challinor, Paul Perrot, Julian Euell; Treasurer T. Ames Wheeler and Assistant Treasurer Christian C. Hohenlohe; General Counsel Peter G. Powers; Director of

-2- Support Activities Richard L. Ault; Executive Assistant to the Secretary Dorothy Rosenberg, Coordinator of Public Information Lawrence E. Taylor; Director of Membership and Development James Symington; Special Assistant to the Secretary James M. Hobbins; Counsel and Deputy Chief of Staff, Office of the Vice President, Michael S. Berman; Assistant to Senator Jackson, Owen Malone, Assistant to Senator Morgan, Carroll Leggett; and Consultant of the Board of Regents, Hermann P. Bretsch. Mr. Webb welcomed the newly appointed Regent from Texas, Mrs. Armstrong, and Representative Leo J. Ryan replacing Mrs. Lindy Boggs who had recently reluctantly resigned from the Board. [[underlined]] Minutes of Meeting of May 5, 1978 [[/underlined]] It was noted that the minutes of the May 5, 1978, meeting of the Board of Regents had been sent to the members of the Board in draft form and, having received no changes, the Executive Committee recommended their approval. The following motion was approved: VOTED that the Board of Regents approves the Minutes of the Meeting of May 5, 1978, as previously circulated on July 13, 1978. [[underlined]] Report of the Executive Committee [[/underlined]] Mr. Webb reported that the Executive Committee of the Board of Regents met on August 2, 1978, at the Smithsonian Institution Building at 12:30 p.m. Present were:

-3- Warren E. Burger, Chancellor James E. Webb, Chairman S. Dillon Ripley, Secretary Michael Collins, Under Secretary John F. Jameson, Assistant Secretary for Administration T. Ames Wheeler, Treasurer Dorothy Rosenberg, Executive Assistant to the Secretary Hermann P. Bretsch, Consultant to the Board of Regents Messrs. Haskins and Burden were unable to attend because of prior commitments. Mr. Webb stated the Executive Committee reviewed these matters very carefully because there were a number of items that affect strongly the future operations of the Regents. The items on the agenda were reviewed and particular attention was directed to the financial reports, which included the pending federal appropriation request for FY 1979, the proposed federal appropriation request for FY 1980, and the proposed trust funds budgets for FYs 1979 and 1980 all requiring the approval of the Board of Regents. A question was raised concerning nomenclature used in the financial reports, including the references to various funds of the Institution. Mr. Wheeler will provide a definition of th terms used in the reports as well as clarification of the purposes of the various funds in order to have a clearer understanding of the contents of the reports. The Executive Committee recommended that the actions of the Regents cover both appropriated and nonappropriated funds budgets and

-4- authorize their subsequent use by the Secretary in accordance with the programs and projects as shown in such approved budgets. The Executive Committee recommended: 1. That the Institution work toward a unified or consolidated budget for all the activities of the Institution, with activities and funding divided into sections best suited to consideration by the Office of Management and Budget, the Congress and the Regents. To initiate this procedure the Executive Committee recommends that the budget estimates for the budget year (fiscal year 1980) as submitted by the Secretary be approved for presentation to OMB and the Congress; 2. That the Regents review the federal appropriations enactment for the current year (fiscal year 1979) and authorize the Secretary to expend such funds in accordance with the approved budget; 3. That the Secretary review for the Regents the budget allocations he considers proper for nonappropriated funds, showing under each section of the consolidated budget the support he recommends from both the appropriated and non-appropriated funds available; the Secretary also recommend for Regents' approval all substantial reprogramming of funds he considers desirable and notify the appropriate Congressional committee of such actions.

-5- The resolutions needed to accomplish these moves are recommended in the attached report of the Executive Committee to the Regents. The Executive Committee reported that the Secretary and the Institution staff have undertaken a long-range planning perspective which will require consideration by the Regents. To provide additional program and financial data to Congress as requested in committee reports, the Institution's use of nonappropriated funds in previous years has been incorporated in the attachments to these minutes. In response to Congressional committee requests that the Regents consider reducing the level of the endowment the Institution has considered necessary ($50 million) and using a larger portion of trust funds to pay for current programs, the draft of a policy statement has been prepared, revised by the Executive Committee, and is recommended for Regents'consideration. The matter of requests that meetings of the Board of Regents be open to the public was discussed. The House Appropriations Committee made such a recommendation in its report on the fiscal year 1978 budget. The Senate Appropriation Subcommittee in its report on our fiscal year 1979 budget has also urged that open meetings be held. The Executive Committee requests that the Regents consider this matter at the September meeting. The remainder of the items on the agenda contain revisions incorporated by the Executive Committee for consideration by the Board.

-6- A major effort is being made to send the Regents the agenda and background papers three weeks in advance of the Regents meeting in order to provide ample time for review of the material. The meeting adjourned at 5:00 p.m. /s/ James E. Webb Chairman, Executive Committee Board of Regents

-7- [[underlined]] FINANCIAL REPORT [[/underlined]] [[underlined]] NEW FORMAT [[/underlined]] Mr. Wheeler reported that, reflecting the wishes of the Executive Committee of the Board of Regents, a number of changes have been incorporated in the Institution's financial report. Whereas, previously, Federal appropriations were discussed separately from non-appropriated trust funds, it is the present intent to treat all funds provided for a given fiscal year--Federal appropriations, Federal grants and contracts and non-appropriated trust funds--as a part of the total consolidated budget for that year. This treatment, as explained in detail by Mr. Wheeler, sets forth more clearly the sources and restrictions, if any, of funds utilized by the Institution. Accordingly, in Schedule A (attached) there is set forth for fiscal years 1977-1980 inclusive, a summary of all funds provided and applied. This summary deals principally with Smithsonian operations exclusive of the Smithsonian Science Information Exchange, the Foreign Currency Program, and Construction. Federal appropriations for these latter three elements are, however, set forth at the bottom of Schedule A. Overall consolidated budgets for the years FY 1978, FY 1979 and FY 1980, are presented individually and in more detail in Schedules B, C, and D, with operating income and expenditures for Federal appropriations, Federal grants and contracts, unrestricted general and special purpose trust funds and for restricted trust funds, as well as detail on construction projects set forth separately. In Schedule E and F further detail is added for (1) revenues and expenditures of revenue-generating auxiliary activities and (2) special purpose funds and restricted funds. Finally, in Schedule G there are set forth balance sheets for the Institution's

-8- non-appropriated trust finds, including those for endowment funds, plant funds and agency funds. [[underlined]] FISCAL YEAR 1978 - STATUS REPORT (SCHEDULE B) [[/underlined]] As shown on both Schedules A and B, total Institutional revenues, including Federal appropriations, Federal grants and contracts and non-appropriated trust funds, are estimated at $166,666,000, on a gross revenue basis, or $123,159,000 net after deduction of expenditures incurred for the auxiliary activities with self-generated revenues. The estimated application of these funds to major programmatic categories is also set forth in Schedules A and B. The House and Senate acted on our FY 1978 Supplemental Appropriation request, approving 95% of the estimated $4,900,000 for the October 1977 pay raises, and $580,000 of the $1,100,000 for increased utility costs. This raised the FY 1978 appropriation for Salaries and Expenses to $93,393,000, and the total appropriation, including SSIE, Foreign Currency and Construction, to $104,500,000 (see Schedule A). With respect to non-appropriated trust funds, results for FY 1978 are projected at a higher level than at the last Regents meeting. For reasons outlined at that time, results should be better than originally budgeted (higher interest income, favorable developments in auxiliary activities, particularly in sales of Smithsonian Exposition Books, music records and the Shops, partially offset by higher administrative costs and operating allotments). In addition, the estimated net income for the [[underlined]] Smithsonian [[/underlined]] magazine has now been increased to $7,400,000 (from $6,600,000) since advertising and circulation income are both currently at high levels, while expenses are below budgeted figures.

-9- Thus, it is currently indicated that the Institution can provide in Fiscal Year 1978 for the full approved $2 million Acquisition-Research-Educational Outreach Program, as well as an addition of $1 million to the Magazine advertising tax reserve plus the $3,000,000 already transferred this year to the Endowment Funds and still retain $2,000,000 in current operating funds for future Institutional purposes. [[underlined] Balance Sheet and Endowment Funds[[/underlined]]-- In Schedule G may be seen balance sheets for non-appropriated trust funds and divided between those for current funds (including both unrestricted purpose and restricted purpose funds), endowment funds, plant funds and agency funds. The current funds balance sheet continues to indicate a strong financial position; the unusually large cash and investment balances on June 30th have since been reduced by seasonal operating requirements. These current investments are represented by very high grade, short-term securities, with an average maturity of about one year (average yield of 7.3%), the longest maturity being four years. With a $3,000,000 transfer from current funds this year to unrestricted purpose endowment funds, the total of such unrestricted endowment funds as of September 30, 1978, should approximate $17.0 million. Another $1,165,000 resulting from the recent sale of the Seidell bequest property is being transferred to [[underlined]]restricted[[/underlined]] purpose endowment funds in FY 1978 along with $250,000 from NASM Special Purpose Funds for the Lindbergh Chair endowment (Agenda Item 6) and reinvestment of about $200,000 of Restricted Fund income. The book value of total endowment funds at year end, including all restricted and unrestricted purpose funds, should then approximate $52 million. Market values of these endowment funds as of June 30, 1978 were approximately 4% higher than book values.

-10- Plant funds show a total of $10,617,000 as of June 30, 1978, and include only the value of land and buildings acquired by private gift or paid for from trust funds; they do not include fixed assets (furniture and fixtures) used in connection with revenue-producing activities since these are included among Current Fund fixed assets and are depreciated as a charge against revenue-producing activities. Agency funds totaling $1,358,000 as of June 30, 1978, represent funds held by the Smithsonian on behalf of Woodrow Wilson International Center for Scholars, Reading Is Fundamental and a few other minor funds being administrated by the Institution. ****** [[underlined]]FISCAL YEAR 1979 BUDGET (SCHEDULE C)[[/underlined]] As shown in Schedules A and C, the Institution's total operating funds in FY 1979 are estimated to approximate $176,100,000 on a gross basis, or $122,500,000 net of expenditures for activities generating revenues. While gross revenues should thus exceed those of the previous year by nearly $10 million, it is estimated that the net income will be roughly the same as that of FY 1978, as explained below. [[underlined]]Federal Appropriations[[/underlined]]-- Mr. Wheeler pointed out that the Financial Report previously furnished to the Regents had been updated to include the Joint Conference Committee action on September 12, 1978 on the Smithsonian FY 1979 appropriation. The following table shows the House, Senate and Conference Committee (not yet final as of this meeting) actions on the FY 1979 appropriations, together with the FY 1978 actual and FY 1980 requested appropriation, for comparative purposes:

-11- FY 1979 [[line]] [[table - 7 columns]] ($000's) | |[[underlined]] FY 1978 | SI Request | House Mark | Senate Mark | Joint Conference | FY 1980 Request to OMB [[/underlined]] Salaries & Expenses | 93,393 | 96,307 | 96,841 | 95,540 | 96,302 | 103,397 SSIE | 1,857 | 2,218 | 2,000 | 2,000 | 2,000 | 2,218* Spec. Foreign Currency Pgm. | 4,000 | 3,700 | 3,700 | 3,700 | 3,700 | 7,700 Construction: Nat'l Zoo. Park | 2,500 | 3,900 | 3,900 | 3,900 | 3,900 | 6,550 Restoration and Renovation of Buildings | 2,425 | 3,100 | 2,100 | 1,950 | 2,100 | 11,600 Museum Support Center | [[underlined]] 325 | 575 | 575 | 575 | 575 | 20,600 [[/underlined]] Total | 104,500 | 109,800 | 109,116 | 107,665 | 108,577 | 152,065 [[/table]] *To be included in budget request of Department of Commerce, as noted below. A further FY 1979 supplemental appropriation will undoubtedly be required to cover increased pay to be legislated in October 1978, as was the case in the current year. On an overall basis the Institution was very well treated. This was especially true of the House which added a number of items to our request, as indicated in the following table: [[underlined]] CONGRESSIONAL ACTIONS ON FY 1979 REQUESTS[[/underlined]] [[table]] | [[underlined]] House Additions | Subsequent Senate Action [[/underlined]] Increase SAO multi-mirror telescope base | $300,000 | Approved Increase for Conserv. Analytical Lab. | 31,000 | Approved For National Art Bank | 500,000 | Disallowed For Inventory of Collections | 500,00* | Disallowed [[/table]] On the other hand, the House also cut a number of requests: [[table]] | [[underlined]] Reductions Made by House | Subsequent Senate Action [[/underlined]] NASM - Exhibits | $260,000 | Restored on appeal NMNH - Support for Scientists | 165,000 | Concurred with cut SSIE | 218,000 | Concurred with cut Cooper-Hewitt Museum | 25,000 | Concurred with cut Necessary Pay | 333,000 | Concurred with cut Construction Restor. & Renovation | 1,000,000 | Concurred with cut [[/table]] _____ *Restored on appeal to the House-Senate Conference.

-12- In addition, the Senate disallowed certain items previously approved by the House: [[table]] Research Awards Program (total) | $390,000* Restor. & Renov. - Maintenance Bldg. at Chesapeake Bay Center | 150,000* Libraries - Acquisition of books and publications | 75,000* Other - NCFA exhibits* ($57,000); AAA Journal ($19,000); DPA ($20,000) | 96,000 [[/table]] _____ *Restored on appeal to the House-Senate Conference. As noted above, all four items on which the Institution had appealed to the Joint Committee from cuts made in the Senate were restored in full, totaling $672,000, including $390,000 for the Research Awards Program, and $150,000 for the Chesapeake Bay Center Laboratory construction. The Conference Committee also restored the $500,000 appropriation to allow a speed-up of the inventorying of our collections; this item had been added to our original request by the House, and later deleted by the Senate. The reports of both the House and Senate Committees question the need for the Smithsonian to build a $50,000,000 endowment fund, and suggested that the Regents budget a portion of such funds to pay for current programs (this will be discussed later). In addition, the Senate report directs the Smithsonian to consult immediately with the Department of Commerce and OMB regarding termination of the corporate status of SSIE, the conversion of its employees to civil service status and consolidation of its operations within the National Technical Information System; it is further directed that transfer to the Commerce Department be made "not later than July 1, 1979," The Conference Committee concurred with the Senate on this point, and discussions have already taken place with the Department of Commerce and the Office of Management and Budget

-13- to bring about this transfer as soon as possible. The Commerce Department has now assumed responsibility for the FY 1980 appropriation request for the Exchange. Finally, the Senate report again calls for "a detailed and specific policy" governing the use of Federal and trust funds "that meets the approval of both the Senate and House Committees." [[underlined]]Non-appropriated Trust Funds - Unrestricted Purposes[[/underlined]] As part of the overall FY 1979 budget authorization, formal approval by the Board of Regents is now sought for the FY 1979 non-appropriated trust funds budgets, included in Schedule C. For the Unrestricted Trust Funds portion, projected results are less favorable than those for the current year (FY 1978). After providing for continuation of the $2 million Acquisition-Research-Educational Outreach Program, and after reducing provisions for the Magazine advertising tax reserve (to $500,000 from $1,000,000), and for plant transfers (to $100,000 from $725,000), the surplus available for transfer to endowment funds may be $2,500,000. Mr. Wheeler pointed out that the Regents had before them the recommendation (see Tab 5 - "Use of Non-Appropriated Funds") that the Institution finance from self-generated funds up to $1,000,000 of activities previously covered by appropriated federal funds. The FY 1979 non-appropriated funds budget already provides $400,000 for rental costs currently charged to appropriations and an additional $100,000 of unallocated monies which can be directed to this commitment; if the recommendation is approved, however, the budget will be revised to provide the necessary funds by reducing the previously proposed $2,500,00 transfer to the Endowment Funds to $2,000,000.

-14- The principal factors accounting for this less favorable result in FY 1979 compared with FY 1978 are: (1) Estimated reduction in magazine income (rising costs including higher charges for Institutional overhead and new charges for space rental) $1,180,000 (2) Reduced income from Smithsonian Exposition Books (success of "Smithsonian Experience" unlikely to be repeated) 1,020,000 (3) A 25% ($1,050,000) increase in administrative costs and resulting increases in amount unrecovered through charges to activities and grants and contracts 400,000 (4) Allowance for renovation of Arts and Industries auditorium, Chesapeake Bay Center Laboratory Wing equipment, and other allotments 390,000 (5) Provision for absorption of possible SSIE operating deficit and termination costs in transfer to federal agency [[underlined]] 200,000[[/underlined]] Subtotal - Major income decreases above - $3,190,000 [[underlined]]LESS COST DECREASES[[/underlined]] (1) Reduced provision for tax on magazine advertising ($500,000 instead of $1,000,000) 500,000 (2) Reduced provision for plant construction [[underlined]] 625,000[[/underlined]] Subtotal - Reduced Expenditures $1,125,000 REDUCTION IN FY 1979 NET INCOME vs. FY 1978 (Approx.) $2,065,000 This budget calls for overhead rates to rise to 25% on Federal grants and contracts and 18% on auxiliary activities (compared to the present overall 15% rate). Overhead rate increases reflect the higher administrative costs caused by (1) legislated pay increases, (2) normal salary actions, (3) administrative staff additions in both FY 1978 and FY 1979, and (4) the additions of rental charges.

-15- Estimated Shop, Mail Order and Product Development net gain of $360,000 in FY 1979 (See Schedule E--reduced from $590,000 in FY 1978) may be unduly conservative. However, this estimate reflects higher depreciation, rent and start-up costs for the new and larger warehouse. Trust fund budget support for Cooper-Hewitt Museum is being continued at $325,000. Trust fund income in the amount of $300,000 (increase of $180,000) is included for the October 1978 Folklife Festival and related work, and $92,000 is recommended for library bookbinding needs and two one-time cataloging projects for (1) our dispersed photo collections and (2) widely-held print collections. Sharing with NASM of some $50,000 of income of that bureau's garage fees is eliminated. Also, this budget makes no provision for further construction at the Chesapeake Bay Center or added expenditures for the South Yard or the garden for the handicapped. [[underlined]] Special Purpose Trust Funds [[/underlined]] Special Purpose Funds, summarized at the top of Schedule F, are unrestricted purpose funds derived from bureaux operations (principally NASM) or from shop, product development and concession revenues (which are shared by the participating bureaux. The reserve for magazine advertising taxes is also included in these fund balances, accounting for $2,400,000 of the total projected for the end of FY 1979. Income and expense (including revenue sharing transfers from Unrestricted Funds) run close to $2 million per year, although they can vary widely depending upon bureau programs, purchases for collections, etc.

-16- The NASM film theatre and spacearium admission fees are the largest source of revenues and these are devoted largely to theatre costs for attendants, replacement films and related equipment. Programs of laser shows in the spacearium in FY 1979 and GAT trainer demonstrations account for next year's indicated increases in both revenues and expenditures. In FY 1978, NASM began a newsletter supported by these Special Purpose Funds; the FY 1979 budget continues this support. In addition, the FY 1979 budget contemplates a further $100,000 transfer to the Institution's Endowment Funds to provide for the Lindbergh Chair of Aerospace History (Agenda Item No. 6). "Fluid Research" allotments, on the other hand, will no longer be transferred from unrestricted funds to these Special Purpose funds beginning in FY 1979. Instead, they will be budgeted by the Board of Regents as allotments from the Unrestricted Trust Funds. [[underlined]] Restricted Trust Funds [[/underlined]] Restricted Trust funds include the four major "restricted operating funds" (Freer Gallery, Fort Pierce Bureau for Oceanography, Archives of American Art and Cooper-Hewitt Museum of Design). They also include the income from a number of restricted purpose endowment funds that provide income and related expenditures therefrom in support of activities of Smithsonian scientists, plus a large number of other restricted funds for diverse purposes held by the Institution. Data on these funds is shown in the bottom half of Schedule F. Income from endowment investments is projected for FY 1979 at the same payout level per endowment funds unit as in FY 1978. As to estimated receipts of other income from gifts,

-17- grants and miscellaneous sources (Cooper-Hewitt and Archives of American Art memberships, classes, auctions, etc.) it must be understood that these are difficult to predict in advance and are, therefore, subject to considerable variation. Balances in these funds tend to remain fairly constant, but the Freer Gallery funds are expected to be drawn down somewhat in the next two years to complete purchase commitments already outstanding. Research expenditures at Fort Pierce are estimated at conservative levels pending disposition of the current court case. [[underlined]]Regents Budget Approval[[/underlined]] -- Based on Congressional actions and current estimates of non-appropriated trust fund income outlined above, a revised budget for FY 1979 is recommended. The recommended budgets cover both appropriated and non-appropriated trust funds (including self-generated funds) as well as expenditures in these categories. Accordingly, the Board of Regents approved the following motions: VOTED: that the Board of Regents authorizes the Secretary to expend FY 1979 Federal appropriations as approved by the President on October 17, 1978, (P.L. 95-465) VOTED: that the Board of Regents approves the budget of the nonappropriated funds for FY 1979 as outlined above, and authorizes expenditures by the Secretary in accordance therewith; any material changes in program plans incorporated in the budget, together with any changes of more than 10% or $250,000 in any line item or in the total administrative expenditures shall be made only with the approval of the Board of Regents or its Executive Committee. [[line]] Subsequent to the meeting of the Board of Regents, the Chairman of the Executive Committee and the Secretary met to discuss (1) the exact

-18- amount of the transfer to endowment in FY 1978, in view of possible funding needs in FY 1978 for collection acquisition needs, and (2) the amount to be transferred to endowment in FY 1979, after assumption by the Institution's non-appropriated Trust Funds of certain expenses currently met from appropriated funds. They concluded that the intent of the Board as expressed at the meeting would be best served by the following actions: (1) The transfer to unrestricted endowment in FY 1978 would be limited to the $3.0 million already transferred as of June 30, 1978, representing a $1.0 million decrease from original budget. The remaining $2.0 million of unallocated FY 1978 net unrestricted income would be set aside for the following two collection acquisition needs: (a) Provision for the $1.0 million pledge toward the Gilbert Stuart portraits, should these funds prove to be needed; (b) Additional funding toward the Board's five-year commitment of $5.0 million for collection acquisitions (part of the $2.0 million per year program for Collection Acquisitions, Research and Educational Outreach approved in January 1978); this will make it possible for the Institution to take advantage of major purchase opportunities, should they become available before sufficient funds have been set aside at the rate of $1.0 million annual allotments. (2) A reduction to $2.0 million (from $2.5 million) of the FY 1979 transfer to endowment would be budgeted to permit the Institution to absorb a full $1.0 million of expenses currently funded by federal appropriations. Candidates for such support

-19- have not yet been identified, beyond some $400,000 of rental costs to be charged to auxiliary and other trust fund activities, but will be determined in consultation with the Executive Committee of the Regents and the Committees of the Congress. These changes, subsequently approved by poll of the Regents, have not been incorporated into the Attached financial schedules. [[line]] [[underlined]] Fiscal Year 1980 Budget (Schedule D)[[/underlined]] [[underlined]] Federal Appropriations[[/underlined]]-- As shown in Schedule A and in the table on page 1, our proposed FY 1980 appropriation request calls for a large overall increase--from $108.0 million to $151.7 million (subject to change for SSIE's elimination, per above). Major unusual items included in the FY 1980 appropriation request are: [[3 column table]] [[headings are underlined]] Item | Amount | Remarks Museum Support Center Constr. | $20,600,000 | Authorization now being sought NMHT Sixth Floor Library and Study Center Construction | 6,200,000 | FY 78 Request approved by OMB but rejected by Congress Foreign Currency-Moenjodaro Project in Pakistan | 4,000,000 | To preserve ancient site from further decay (P.L. 480 funds) In addition, $6.5 million is requested to continue work on the Zoo's Master Plan (versus $3.9 million in FY 1979 ), plus $5.4 million for restoration and renovation needed to assure the integrity and security of the total physical plant and safety.

-20- The recommended increase for Salaries and Expenses (S&E) budget is $6.7 million, bringing the total to $103.4 million. This consists of $3.6 million of program increases to meet the needs, listed here in priority order, of Collections Management ($1.0 million), Facilities, Protection and Management Services ($1.2 million), Research ($.9 million) and Exhibits and Education ($.5 million). Collections Management is our top program priority this year especially as the Museum Support Center project progresses. Another $1 million of the S&E budget is designed to meet the costs of Congressionally initiated program changes, specifically the expenses associated with the acquisition of the Museum of African Art ($700,000) and with the Panama Canal Treaties ($327,000 for the Tropical Research Institute). These latter expenses may be met through a supplemental request in FY 1979, depending upon the timing of the acquisition of the Museum and upon the Panama Canal Treaty implementing legislation. The final portion ($2.1 million) of the S&E request will cover necessary pay, such as within-grade increases, and utilities expenses. [[underlined]] Non-appropriated Trust Funds[[/underlined]]-- The figures for the FY 1980 non-appropriated trust funds on Schedules A and D represent a preliminary budget estimate which will be refined in FY 1979. Approval of this budget by the Board of Regents, however, is requested at this time for submission to OMB and the Congress. Net income of Unrestricted Trust Funds in FY 1980 is projected to total $8,383,000 a reduction of approximately $675,000 from FY 1979. Although investment income will increase $150,000 due to planned transfers to endowment and a buildup of short-term investments, the net income

-21- from auxiliary activities is expected to decrease some $825,000 (see Schedule E). This decrease is attributable primarily to lower margin in the magazine ($600,000 reduction) and to a decrease in Smithsonian Exposition Book sales ($300,000 reduction). Expenditure of Unrestricted trust funds are shown to remain relatively constant in FY 1980, with increased costs of administration offset by corresponding overhead recovery. A further $2,000,000 should be available for transfer to endowment. Special Purpose Funds are budgeted to show a somewhat lower level of income in FY 1980 than in FY 1979, due to discontinuation of the NASM laser shows. Planned NASM Theatre projection equipment purchases, however, will increase Bureau activity expenditures to a level of $1,087,000. In addition, a further transfer of $100,000 to the Lindbergh Chair will be possible. Restricted Purpose Trust funds income is projected at $500,000 higher in FY 1980 than FY 1979. This increase assumes inclusion of various fund-raising activities of the Museum of African Art into the Smithsonian accounts by that date, and expenditures shown in the History and Art section of Schedule D are likewise increased. Other restricted funds of the Institution are expected to remain at about the FY 1979 level. Although difficult to project, grants and contracts from Federal agencies are shown as decreasing from $12,000,000 in FY 1979 to $11,500,000 in FY 1980. The following motion was approved: VOTED: that the Board of Regents approves the Smithsonian Institution budget for FY 1980 for presentation to the Office of Management and Budget in September 1978.

-22- Schedule A [[underlined]] SMITHSONIAN INSTITUTION - FINANCIAL SUMMARY [[/underlined]] ($1,000's) Fiscal Years 1977 - 1980 [[table, 5 columns]] [[blank]] | [[underlined]] FY 77 Actual | FY 78 Est. Act. (Sch. B) | FY 79 Budget (Sch. C) | FY 80 Proj. (Sch D)[[/underlined]] [[underlined]] SI OPERATING FUNDS [[/underlined]] [[underlined]] FUNDS PROVIDED: [[/underlined]] [[underlined]] FEDERAL APPROP. - S&E [[superscript]]1[[/superscript]] [[/underlined]] | 85,235 | 93,393 | 96,302 | 103,397 [[underlined]] FEDERAL GRANTS & CONTRACTS [[/underlined]] | 10,515 | 10,953 | 12,000 | 11,500 [[underlined]] NON-APPROP. TRUST FUNDS [[/underlined]] Investment Income -Unrestr. Gen. & Spec. Purpose | 1,157 | 1,663 | 1,814 | 1,974 -Restricted | 1,690 | 1,894 | 1,974 | 2,020 Gifts & Grants (Ex. Gifts to Endow.) -Unrestr. Gen. & Spec. Purpose [[superscript]]2[[/superscript]] | 103 | 189 | 145 | 148 -Restricted | 1,724 | 3,315 | 1,429 | 1,366 Self-Generated Revenues Institutional (Gen. Unrestricted) -Gross Revenues | 40,202 | 53,025 | 59,986 | 63,804 -Less Related Expenses | (32,221) | (42,710) | (52,676) | (57,321) [[lines for totals]] -Net Income | 7,981 | 10,316 | 7,310 | 6,483 Bureaux (Spec. Purpose) -Gross Revenues | 1,721 | 1,021 | 1,240 | 1,003 -Less Related Expenses | (617) | (797) | (910) | (1,087) [[lines for totals]] -Net Income | 1,104 | 224 | 330 | (84) Other Misc.-Unrestricted | 377 | 313 | 224 | 247 -Restricted | 993 | 900 | 987 | 1,494 [[lines for totals]] Total Non-Approp. Tr. Funds - Gross | 47,967 | 62,320 | 67,799 | 72,056 -Net of Exps. of Self-Gen. Revs. | 15,129 | 18,813 | 14,213 | 13,648 [[underlined]]TOTAL ALL OPER. FUNDS PROVIDED: [[/underlined]] -Gross | 143,718 | 166,666 | 176,101 | 186,953 -Net | [[double-underlined]] 110,880 | 123,159 | 122,515 | 128,545 [[/double-underlined]] [[underlined]]FUNDS APPLIED:[[/underlined]] Science | 45,682 | 49,641 | 51,404 | 53,872 History & Art | 18,688 | 19,397 | 20,208 | 22,508 Public Service | 2,807 | 2,756 | 2,633 | 2,671 Museum Programs | 6,820 | 7,592 | 8,407 | 8,385 Collec. Acq., Research, Educ.Outreach | - | 2,000 | 2,000 | 2,000 Support Activities | 22,523 | 25,676 | 26,452 | 28,188 Administration -Federal Approp. | 5,644 | 6,272 | 6,798 | 7,341 -Trust Funds | 5,018 | 5,658 | 6,452 | 6,864 Less Overhead Chg. Recovery | (4,592) | (5,352) | (6,025) | (6,504) [[lines for totals]] Net Trust Fund Admin. Exp. | 426 | 306 | 427 | 360 Gen. Purp. Trust Fund Allotments | 355 | 519 | 1,819 | 1,270 [[lines for totals]] [[underlined]]TOTAL OPERATIG FUNDS APPLIED[[/underlined]] | [[double-underlined]] 102,954 [[superscript]]3[[/superscript]] | 114,159 | 120,148 | 126,595 [[/double-underlined]] [[underlined]]TRANSFERS (Non-Approp. Trust Funds) [[/underlined]] To Plant Funds | 554 | 860 | 100 | 60 To Endowment Funds/Reserves Unrestricted Purpose | 5,500 | 3,250 | 2,100 | 2,100 Restricted Purpose | 192 | 1,365 | 200 | 200 [[lines for totals]] Total Transfers | 6,246 | 5,475 | 2,400 | 2,360 [[underlined]]CHANGE IN NON-APPROP. TR.FUND BAL.[[/underlined]] Unrestr. & Spec. Purpose | 1,883 | 2,983 | 347 | 91 Restricted (Inc.Fed. Gr. & Contr.) | (194) | 542 | (380) | (501) [[lines for totals]] Total | [[double-underlined]] 1,689 | 3,525 | (33) | (410) [[/double-underlined]] [[underlined]]NON-APPROP. TR. FUND BALS.-END OF YR.[[/underlined]] Unrestricted & Spec. Purpose | 8,374 | 11,357 | 11,704 | 11,795 Restricted (Incl.Fed.Grants & Contr) | 3,560 | 4,102 | 3,722 | 3,221 [[lines for totals]] Total Oper. Fund Balances | [[double-underlined]] 11,934 | 15,459 | 15,426 | 15,016 [[/double-underlined]] ************************ [[underlined]]OTHER FEDERAL APPROPRIATIONS[[/underlined]] -Smithsonian Science Information Exchange [[superscript]]4[[/superscript]] | 1,972 | 1,857 | 2,000 | 2,218 -Foreign Currency Program | 3,481 | 4,000 | 3,700 | 7,700 -Construction | 9,530 | 5,250 | 6,575 | 38,750 [[underlined]]TOTAL FEDERAL APPROPRIATION[[/underlined]] | [[double-underlined]] 100,219 | 104,500 | 108,577 | 152,065 [[/double-underlined]] ************************ [[superscript]]1[[/superscript]] FY 1978 includes House and Senate action on supplemental request; FY 1979 reflects Congressional appropriations; FY 1980 reflects OMB request. [[superscript]]2[[/superscript]] Excluding gifts to Associates (included under Self-Generated Revenues. [[superscript]]3[[/superscript]] Includes $150 Unobligated Funds returned to U.S. Treasury. [[superscript]]4[[/superscript]] Figures do not include earned revenue to SSIE from outside sources of approx. $1.3 to $1.5 million.

-23- Schedule B SMITHSONIAN INSTITUTION ($1,000's) Projected FY 1978 (Excluding SSIE & Foreign Currency Program) [[table, 7 columns]] [[double-underlined]] OPERATING FUNDS [[/double-underlined]] | Federal Approps. | Federal Gr. & Cont. | Unrest. Trust Funds General | Unrest. Trust Funds Sp.Purp. | Restricted Trust Fds. | Total Op.Funds [line]] [[underlined]] Funds Provided: [[/underlined]] Federal Appropriation | 93,393 | - | - | - | - | 93,393 Investments | - | - | 1,550 | 113 | 1,894 | 3,557 Gifts, Grants & Contracts | - | 10,953 | 135 | 54 | 3,315 | 14,457 Self-generated - Gross Rev: Auxiliary Acts (Sched. E) | - | - | 53,025 | - | - | 53,025 Bureaux (Sched. F) | - | - | - | 1,021 | - | 1,021 Other Misc. | - | - | 15 | 298 | 900 | 1,213 [[line]] Total Income | 93,393 | 10,953 | 54,725 | 1,486 | 6,109 | 166,666 Less Expenses - Self Gener. Auxiliary Acts. (Sched. E) | - | - | 42,710 | - | - | 42,710 Bureaux (Sched. F) | - | - | - | 797 | - | 797 [[line]] Net Funds Provided | 93,393 | 10,953 | 12,015 | 689 | 6,109 | 123,159 [[underlined]] Funds Applied: [[/underlined]] (Net of S-G Exps) Science | 36,839 | 10,440 | 580 | 507 | 1,275 | 49,641 History & Art | 15,339 | 355 | 732 | 355 | 2,616 | 19,397 Public Service | 2,347 | 89 | 104 | 16 | 200 | 2,756 Museum Programs | 7,350 | 15 | 165 | 57 | 5 | 7,592 Collect.Acq., Research, Educ. | - | - | 2,000 | - | - | 2,000 Support Activities | 25,246 | - | 335 | 75 | 20 | 25,676 Administration - Gross | 6,272 | 116 | 5,443 | 30 | 69 | 11,930 -Overhead Recovery | - | - | (5,352) | - | - | (5,352) -Other Allotments | - | - | 319 | 200 | - | 519 [[line]] Total Funds Applied | 93,393 | 11,015 | 4,326 | 1,240 | 4,185 | 114,159 [[underlined]] Transfers: [[/underlined]] Out/(In) Current Funds -Mag.Tax/Coll.Acq | - | - | 3,000 | (3,000) | - | - -Bureau Revenue Sharing | - | - | 394 | (394) | - | - -Other | - | (20) | 245 | (200) | (25) | - Plant Funds | - | - | 860 | - | - | 860 Endowment Funds/Reserves | - | - | 3,000 | 250 | 1,365 | 4,615 [[line]] Total Transfers | - | (20) | 7,499 | (3,344) | 1,340 | 5,475 [[underlined]] Change in Fund Balances [[/underlined]] | -0- | (42) | 190 | 2,793 | 584 | 3,525 [[double line]] [[underlined]] Ending Fund Balance [[/underline]]| -0- | -0- | 4,272 | 7,085 | 4,102 | 15,459 [[double line]] [[/table]] [[table, 3 columns]] [[double-underlined]] CONSTRUCTION FUNDS [[/double-underlined]] | [[underlined]] Federal Appropriations | Nonfederal Funds [[/underlined]] National Zoological Park | 2,500 | [[blank]] Museum Support Center | 325 | [[blank]] Restoration & Renovation of Bldgs | 2,425 | [[blank]] [[underlined]] From Transfers [[/underlined]] of Trust Funds -Chesapeake Bay Center - Lab Bldg. | [[blank]] | 300 -Land Payments | [[blank]] | 66 -South Garden Fencing | [[blank]] | 225 -SI Building - East Door Area | [[blank]] | 100 -Barney House Renovation | [[blank]] | 69 -Cooper-Hewitt surplus | [[blank]] | (10) -Front Royal Land Purchase | [[underlined]] [[blank]] | 110 [[/underlined]] Total Construction Funds | 5,250 | 860 [[/table]]

-24- Schedule C SMITHSONIAN INSTITUTION ($1,000's) Budget - FY 1979 (Excluding SSIE & Foreign Currency Program) [[table, 7 columns]] [[double-underlined]] OPERATING FUNDS [[/double-underlined]] | Federal Approps. | Federal Gr. & Cont. | Unrest. Trust Funds General | Unrest. Trust Funds Sp.Purp. | Restricted Trust Fds. | Total Op.Funds [[line]] [[underlined]] Funds Provided: Federal Appropriation | 96,302 | - | - | - | - | 96,302 Investments | - | - | 1,650 | 164 | 1,974 | 3,788 Gifts, Grants & Contracts | - | 12,000 | 85 | 60 | 1,429 | 13,574 Self-generated - Gross Rev: Auxiliary Acts. (Sched. E) | - | - | 59,986 | - | - | 59,986 Bureaux (Sched. F) | - | - | - | 1,240 | - | 1,240 Other Misc. | - | - | 15 | 209 | 987 | 1,211 [[line]] Total Income | 96,302 | 12,000 | 61,736 | 1,673 | 4,390 | 176,101 Less Expenses - Self. Gener. Auxiliary Acts. (Sched. E) | - | - | 52,676 | - | - | 52,676 Bureaux (Sched. F) | - | - | - | 910 | - | 910 [[line]] Net Funds Provided | 96,302 | 12,000 | 9,060 | 763 | 4,390 | 122,515 [[underlined]] Funds Applied [[/underlined]]: (Net of S-G Exps) Science | 37,359 | 11,381 | 367 | 717 | 1,580 | 51,404 History & Art | 15,824 | 481 | 786 | 325 | 2,792 | 20,208 Public Service | 2,342 | 77 | 102 | 5 | 107 | 2,633 Museum Programs [[superscript]] 1 [[/superscript]] | 8,060 | 44 | 219 | 38 | 46 | 8,407 Collect.Acq., Research, Educ. | - | - | 2,000 | - | - | 2,000 Support Activities | 25,919 | - | 552 | (19) | - | 26,452 Administration - Gross | 6,798 | 27 | 6,335 | 20 | 70 | 13,250 -Overhead Recovery | - | - | (6,025) | - | - | (6,025) -Other Allotments | - | - | 1,819 | - | - | 1,819 [[line]] Total funds Applied | 96,302 | 12,010 | 6,155 | 1,086 | 4,595 | 120,148 [[underlined]] Transfers [[/underlined]]: Out/(In) Current Funds - Mag. Tax | - | - | 500 | (500) | - | - -Bureau Revenue Sharing | - | - | 240 | (240) | - | - -Other | - | (10) | 35 | - | (25) | - Plant Funds | - | - | 100 | - | - | 100 Endowment Funds/Reserves | - | - | 2,000 | 100 | 200 | 2,300 [[line]] Total Transfers | - | (10) | 2,875 | (640) | 175 | 2,400 [[underlined]] Change in Fund Balances [[/underlined]] | -0- | -0- | 30 | 317 | (380) | (33) [[double line]] [[underlined]] Ending Fund Balance [[/underlined]] | -0- | -0- | 4,302 | 7,402 | 3,722 | 15,426 [[double line]] [[/table]] [[table, 3 columns]] [[double-underlined]] CONSTRUCTION FUNDS [[/double-underlined]] | [[underlined]] Federal Appropriations | Nonfederal Funds [[/underlined]] National Zoological Park | 3,900 | [[blank]] Museum Support Center | 575 | [[blank]] Restoration & Renovation of Bldgs. | 2,100 | [[blank]] [[underlined]] From Transfers [[/underlined]] of Trust Funds -Chesapeake Bay Center - Land Acq. | [[underlined]] [[blank]] | 100 [[/underlined]] Total Construction Funds | 6,575 | 100 [[/table]] [[superscript]] 1 [[/superscript]] Incudes $500,000 appropriated for collections inventory.

-25- Schedule D SMITHSONIAN INSTITUTION ($1,000's) Estimated FY 1980 (Excluding SSIE & Foreign Currency Programs) [[table, 7 columns]] [[double-underlined]] OPERATING FUNDS [[/double-underlined]] | Federal Approps. | Federal Gr. & Cont. | Unrest. Trust Funds General | Unrest.Trust Funds Sp.Purp | Restricted Trust Fds. | Total Op.Funds [[line]] [[underlined]]Funds Provided:[[/underlined]] Federal Appropriation | 103,397 | - | - | - | - | 103,397 Investments | - | - | 1,800 | 174 | 2,020 | 3,944 Gifts, Grants & Contracts | - | 11,500 | 85 | 63 | 1,366 | 13,014 Self-generated - Gross Rev: Auxiliary Acts. (Sched. E) | - | - | 63,804 | - | - | 63,804 Bureaux (Sched. F) | - | - | - | 1,003 | - | 1,003 Other Misc. | - | - | 15 | 232 | 1,494 | 1,741 [[line]] Total Income | 103,397 | 11,500 | 65,704 | 1,472 | 4,880 | 186,953 Less Expenses - Self. Gener. Auxiliary Acts. (Sched. E) | - | - | 57,321 | - | - | 57,321 Bureaux (Sched. F) | - | - | - | 1,087 | - | 1,087 [[line]] Net Funds Provided | 103,397 | 11,500 | 8,383 | 385 | 4,880 | 128,545 [[underlined]] Funds Applied [[/underlined]]: (Net of S-G Exps) Science | 40,222 | 11,240 | 262 | 522 | 1,626 | 53,872 History & Art | 17,668 | 219 | 817 | 379 | 3,425 | 22,508 Public Service | 2,451| - | 110 | 16 | 94 | 2,671 Museum Programs | 8,106 | 11 | 211 | 25 | 32 | 8,385 Collect.Acq., Research, Educ. | - | - | 2,000 | - | - | 2,000 Support Activities | 27,609 | - | 566 | 13 | - | 28,188 Administration - Gross | 7,341 | 40 | 6,777 | 18 | 29 | 14,205 -Overhead Recovery | - | - | (6,504) | - | - | (6,504) -Other Allotments | - | - | 1,270 | - | - |1,270 [[line]] Total Funds Applied | 103,397 | 11,510 | 5,509 | 973 | 5,206 | 126,595 [[underlined]] Transfers [[/underlined]]: Out/(In) Current Funds - Mag. Tax | - | - | 500 | (500) | - | - -Bureau Revenue Sharing | - | - | 222 | (222) | - | - -Other | - | (10) | 35 | - | (25) | - Plant Funds | - | - | 60 | - | - | 60 Endowment Funds/Reserves | - | - | 2,000 | 100 | 200 | 2,300 [[line]] Total Transfers | - | (10) | 2,817 | (622) | 175 | 2,360 [[underlined]] Change in Fund Balances [[/underlined]] | -0- | -0- | 57 | 34 | (501) | (410) [[double line]] [[underlined]] Ending Fund Balance [[/underlined]] | -0- | -0- | 4,359 | 7,436 | 3,221 | 15,016 [[double line]] [[/table]] [[table, 3 columns]] [[double-underlined]] CONSTRUCTION FUNDS [[/double-underlined]] | [[underlined]] Federal Appropriations | Nonfederal Funds [[/underlined]] National Zoological Park | 6,500 | [[blank]] Museum Support Center | 20,600 | [[blank]] Restoration & Renovation of Bldgs. | 11,600 | [[blank]] [[underlined]] From Transfers [[/underlined]] of Trust Funds -Chesapeake Bay Center - Land Acq. | [[underlined]] [[blank]] | 100 [[/underlined]] Total Construction Funds | 38,750 | 60 [[/table]]

-26- [[underlined]] SMITHSONIAN INSTITUTION - AUXILIARY ACTIVITIES [[/underlined]] ($1,000's) Schedule E [[5 column table]] [[blank]] | FY 1977 Actual | FY 1978 Projected | FY 1979 Budget | FY 1980 Estimated [[line]] [[underlined]] Associates - Magazine [[/underlined]] Gross Income | 24,510 | 28,350 | 29,825 | 31,617 Less Expenses | (18,142) | (20,950) | (24,005) | (26,417) [[line]] Net Income | 6,368 | 7,400 | 5,820 | 5,200 [[underlined]] Associates - Other [[/underlined]] Gross Income | 5,222 | 5,370 | 7,546 | 8,184 Gifts | 352 | 344 | 476 | 620 Less Expenses | (5,526) | (5,929) | (8,522) | (9,322) [[line]] Net Income | 48 | (215) | (500) | (518) [[underlined]] Shops, Mail Order, Prod. Dev. [[/underlined]] Gross Income | 6,935 | 10,040 | 12,399 | 13,819 Less Expenses | (6,177) | (9,450) | (12,039) | (13,396) [[line]] Net Income | 758 | 590 | 360 | 423 [[underlined]] Concessions [[/underlined]] Gross Income | 1,717 | 1,670 | 1,681 | 1,783 Less Expenses | (66) | (120) | (141) | (156) [[line]] Net Income | 1,651 | 1,550 | 1,540 | 1,627 [[underlined]] Smithsonian Exposition Books [[/underlined]] Gross Income | - | 4,000 | 4,190 | 3,643 Less Expenses | (131) | (2,300) | (3,410) | (3,177) [[line]] Net Income | (131) | 1,700 | 780 | 466 [[underlined]] Smithsonian Press [[/underlined]] Gross Income | 241 | 359 | 499 | 551 Less Expenses | (349) | (584) | (629) | (692) [[line]] Net Income | (108) | (225) | (130) | (141) [[underlined]] Telecommunications [[/underlined]] Gross Income | 39 | 25 | 31 | 41 Less Expenses | (189) | (300) | (311) | (359) [[line]] Net Income | (150) | (275) | (280) | (318) [[underlined]] Performing Arts [[/underlined]] Gross Income | 407 | 2,025 | 2,090 | 2,100 Less Expenses | (736) | (1,850) | (2,090) | (2,125) [[line]] Net Income | (329) | 175 | - | (25) [[underlined]] Traveling Exhibition Service [[/underlined]] Gross Income | 439 | 437 | 460 | 536 Less Expenses | (518) | (552) | (595) | (684) [[line]] Net Income | (79) | (115) | (135) | (148) [[underlined]] Photo Services [[/underlined]] Gross Income | 137 | 160 | 525 | 635 Less Expenses | (128) | (350) | (535) | (626) [[line]] Net Income | 9 | (190) | (10) | 9 [[underlined]] Belmont Conference Center [[/underlined]] Gross Income | 216 | 245 | 264 | 275 Less Expenses | (258) | (325) | (399) | (367) [[line]] Net Income | (42) | (80) | (135) | (92) [[underlined]] Total Auxiliary Activities [[/underlined]] Gross Income | 39,863 | 52,681 | 59,510 | 63,184 Gifts | 352 | 344 | 476 | 620 Less Expenses | (32,220) | (42,710) | (52,676) | (57,321) [[line]] Net Income | 7,995 | 10,315 | 7,310 | 6,483 [[double line]] Less Bureau Revenue Sharing | 400 | 394 | 240 | 222 Net Income After revenue Sh'g | 7,595 | 9,921 | 7,070 | 6,261 [[double line]] [[/table]]

-27- ($1,000's) Special Purpose & Restricted Trust Funds Schedule F [[table, 5 columns]] [[blank]] | FY 1977 Actual | FY 1978 Projected | FY 1979 Budget | FY 1980 Estimate [[line]] [[underlined]] Special Purpose Funds Income: [[/underlined]] Gifts | $ 55 | $ 54 | $ 60 | $ 63 [[underlined]] Revenues [[/underlined]]: -NASM Theatres | 1,249 | 742 | 947 | 684 -Other | 199 | 285 | 271 | 278 All other Bureaux | 608 | 292 | 231 | 273 Interest | [[underlined]] 95 | 113 | 164 | 174 [[/underlined]] Total Income | [[underlined]] $2,206 | $1,486 | $1,673 | $1,472 [[/underlined]] [[underlined]] Funds Applied [[/underlined]] NASM - Theatres | $ 334 | $ 483 | $ 904 | $ 777 -Newsletter & other NSAM | 168 | 332 | 287 | 358 [[underlined]] All other Bureaux [[/underlined]] Collection purchases | 20 | 30 | 176 | 299 Travel and Other | [[underlined]] 542 | 1,192 | 629 | 626 [[/underlined]] Total Funds Applied | [[underlined]] $1,064 | $2,037 | $1,996 | 2,060 [[/underlined]] Transfers In(Out)-Mag.Tax/Col.Acq. | $ 270 | $3,000 | $ 500 | $ 500 -Lindbergh Chair Endowment | - | (250) | (100) | (100) -Fluid Research Awards | 63 | 200 | - | - -Revenue Sharing | [[underlined]] 400 | 394 | 240 | 222 [[/underlined]] Ending Balance | [[double-underlined]] $4,292 | $7,085 | $7,402 | $7,436 [[/double-underlined]] [[underlined]]Restricted Funds Income: [[/underlined]] Investments & Interest | $1,809 | $1,894 | $1,974 | $2,020 Gifts & Grants | 1,724 | 3,315 | 1,429 | 1,366 Miscellaneous | [[underlined]] 993 | 900 | 987 | 1,494 [[/underlined]] Total Income | $4,526 | $6,109 | $4,390 | $4,880 Expenses and Other Transfers | [[underlined]] $4,666 | $5,525 | $4,770 | $5,381 [[/underlined]] Ending Balances | [[double-underlined]] $3,518 | $4,102 | $3,722 | $3,221 [[/double-underlined]] [[underlined]]Detail: [[/underlined]] Freer Operating - Income | $ 979 | $ 944 | $ 917 | $ 917 -Expenses | [[underlined]] 960 | 849 | 1,067 | 994 [[/underlined]] -Ending Balance | $ 213 | $ 308 | $ 158 | $ 81 Cooper-Hewitt Operating -Income | $ 568 | 548 | $ 583 | $ 657 -Expenses | 917 | 548 | 583 | 657 -Allotment of Unrest. Funds | [[underlined]] (349) | (261) | (287) | (261) [[/underlined]] -Ending Balance | $ -0- | $ -0- | $ -0- | $ -0- Arch. Am. Art Oper. - Income | $ 256 | $ 205 | $ 236 | $ 253 -Expenses | [[underlined]] 288 | 270 | 236 | 253 [[/underlined]] -Ending Balance | $ 177 | $ 112 | $ 112 | $ 112 Ft. Pierce Oper. - Income | $ 594 | $ 600 | $ 600 | $ 600 -Expenses | 423 | 400 | 478 | 483 -Net Transfers (In) Out | [[underlined]] 138 | 200 | 122 | 117 [[/underlined]] -Ending Balance | $ 121 | $ 121 | $ 121 | $ 121 All Other Funds - Income | $2,027 | $2,647 | $2,054 | $2,453 -Expenses | 2,313 | 2,118 | 2,231 | 2,819 -Net Transfers (In) Out | [[underlined]] (126) | 29 | 53 | 58 [[/underlined]] -Ending Balance | [[double-underlined]] $3,007 | $3,561 | $3,331 | $2,907 [[/double-underlined]]

-28- [[underlined]] TRUST FUNDS COMPARATIVE BALANCE SHEET CURRENT FUNDS [[/underlined]] ($1,000's) Schedule G [[table, 5 columns]] [[underlined]] Assets: | 6/30/76 | 9/30/76 | 9/30/77 | 6/30/78 [[/underlined]] Cash | $ 994 | $ 1,515 | $ 1,223 | $ 3,720 Investments (Book Values)* | 11,712 | 8,150 | 11,689 | 17,054 Receivables | 5,184 | 7,489 | 7,650 | 6,019 Inventories | 1,766 | 1,938 | 2,456 | 3,184 Prepaid & Deferred Expense | 351 | 1,115 | 1,332 | 333 Deferred Magazine Expense | 2,049 | 2,318 | 3,266 | 3,827 Capital Improvements/Equipment | [[underlined]] 893 | 1,070 | 1,284 | 1,191 [[/underlined]] Total Assets | [[double-underlined]] $22,949 | $23,595 | $28,900 | $35,327 [[/double-underlined]] [[underlined]] Liabilities and Fund Balances [[/underlined]]: Due to other Funds | $ 1,776 | $ 968 | $ 1,934 | $ 1,588 Deferred Magazine Subscr. Income | 7,704 | 7,856 | 9,972 | 12,145 Other current liabilities | 3,467 | 4,125 | 5,059 | 3,298 Fund balances: Unrestricted Funds: General Purpose | 3,909 | 4,074 | 4,082 | 8,406 Special Purpose | 1,375 | 2,488 | 4,292 | 5,764 Restricted Funds: | [[underlined]] 4,718 | 4,084 | 3,561 | 4,126 [[/underlined]] Total Liabilities & Fund Bal. | [[double-underlined]] $22,949 | $23,595 | $28,900 | $35,327 [[/double-underlined]] *Market Values | [[underlined]] $11,643 | $8,094 | $11,600 [[/underlined]] | $16,962 [[dashed line]] [[underlined]] ENDOWMENT FUNDS Assets: [[/underlined]] Cash & Notes Receivable | $ (228) | $ 483 | $ 264 | $ 31 Due from current funds | 712 | 554 | 374 | 240 Investments (Book Values)* | 40,150 | 40,297 | 46,340 | 49,439 Loan to U.S. Treasury | [[underlined]] 1,000 | 1,000 | 1,000 | 1,000 [[/underlined]] Total Assets | [[double-underlined]] $41,634 | $42,334 | $47,978 | $50,710 [[/double-underlined]] [[underlined]] Endowment Fund Balances: [[/underlined]] Endowment | $32,704 | $32,654 | $32,879 | $34,979 Quasi-endowment | [[underlined]] 8,930 | 9,680 | 15,099 | 15,731 [[/underlined]] Total Endow. Fund Balances | [[double-underlined]] $41,634 | $42,334 | $47,978 | $50,710 [[/double-underlined]] *Market Values | [[underlined]] $41,602 | $42,668 | $46,308 | $52,657 [[/underlined]] [[dashed line]] [[underlined]] PLANT FUNDS Assets: [[/underlined]] Due from Current Funds | $ 708 | $ 42 | $ 38 | $ - Real Est.-Cost or Appraised Value | [[underlined]] 8,948 | 9,875 | 10,343 | 10,617 [[/underlined]] Total Assets | [[double-underlined]] $9,656 | $9,917 | $10,381 | 10,617 [[/double-underlined]] [[underlined]] Liabilities & Fund Balances [[/underlined]] Liabilities | $ 235 | $ 208 | $ 135 | $ 97 Acquisition Fund Balance | 703 | 38 | 33 | - Investment in Plant | [[underlined]] 8,718 | 9,671 | 10,213 | 10,520 [[/underlined]] Total Liabil. & Fund Bals. | [[double-underlined]]$9,656 | $9,917 | $10,381 | $10,617 [[/double-underlined]] [[dashed line]] [[underlined]] AGENCY FUNDS Assets: [[/underlined]] Due from Current Funds | $ 433 | $ 372 | $ 1,521 | $ 1,348 Investment at Cost | [[underlined]] 10 | 10 | 10 | 10 [[/underlined]] Total Assets | [[double-underlined]] $ 443 | $ 382 | $ 1,531 | $ 1,358 [[/double-underlined]] [[underlined]]Fund Balance:[[/underlined]] Due to Current Funds | $ 209 | $ - | $ 123 | $ 291 Deposits Held in Custody | [[underlined]] 234 | 382 | 1,408 | 1,067 [[/underlined]] Total Funds | [[double-underlined]] $ 443 | $ 382 | $ 1,531 | $1,358 [[/double-underlined]] [[/table]]

-29- [[underlined]] Five-Year Perspective: Income and Expenditure Projections [[/underlined]] Mr. Ripley reported that the Congress and the Regents' Audit and Review Committee have suggested that the Smithsonian undertake longer-range planning and in connection with a submission of our FY 1980 appropriation request to the Office of Management and Budget, that office has asked for a projection of the Institution's total funds through FY 1984 in a manner somewhat similar to that presented last year for the fiscal years 1977-1979. Mr. Ripley reported that Mr. Webb provided significant assistance in reviewing this document and appreciated his help. The five-year perspective (attached as Appendix A) begins with an introduction of the unique characteristics of the Institution and summarizes our plans for the next five years. Of particular note is the importance of improvement of our services to the public, as well as the important research, and its support, we conduct. Mr. Ripley stated that for years we have demonstrated that the research support to each individual research scientist lags far behind that given in the major Government agencies. It is our hope to build gradually research support for our scientists in those areas of study which are of crucial importance for the future of America. Accordingly, the attached budget projection has been prepared, and, with the approval of the Regents, will be presented to OMB and later to the Congress with a clear understanding that these budgets and projections are necessarily subject to extensive uncertainties and modifications. The Regents approved the following motion:

-30- VOTED that the Board of Regents approves the submission of the projected Federal and Trust Funds income and expenditures for fiscal years 1980 to 1984 as requested by the Office of Managment and Budget and by the Senate and House Appropriations subcommittees, to be used in conjunction with the FY 1980 Appropriation request Mr. Ripley stated that as we review the text of the narrative of the Five Year Perspective, you will see that we are trying to build up support for our research activities, support for our outreach in an appropriate way, and at the same time to lessen the heavy obligation that we owe for Federal appropriations and match then more and more with continued fund-raising efforts. It was pointed out that before the staff assembled the perspective we had discussions with the House and Senate Appropriations Committee staffs who thought the arrangement of the document appropriate and they asked us to hold down the text. The text is arranged by broad groupings of the Institution's programs, but the tables break down into line items of the organization and details which the appropriations committee staffs like to see. Mr.Webb remarked that the Regents were not being requested to approve the written document but to approve submission of the projected budgets to OMB and the Congress in connection with our next year's (FY 1980) budget request. He suggested that through examination of the total Five

-31- Year Perspective we will have better knowledge of the next five-year objectives of the Institution. Mr. Webb complimented the Secretary and the staff for what he considered to be a fine presentation of what the Secretary is proposing for the future. NOTE: The following tables are estimates as of September 1, 1978, and have not been amended to reflect changes resulting from enactment of Appropriations legislation. These will be incorporated in the next refinement of the estimates.

TABLE 1 SMITHSONIAN INSTITUTION SOURCE OF OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 ($000's) [[table - 8 column]] Source of Operating Funds | FY 1978 | FY 1979 | FY 1980 | FY 1981 | FY 1982 | FY 1983 | FY 1984 [[line]] [[underlined]Federal Salaries & Expenses[[\underlined] | 93,393| 96,307 | 103,397 | 109,094 | 114,598 | 118,090 | 118,545 [[underlined]Unrestricted Trust[[/underlined] .Investments | 1,538 | 1,814 | 1,974 | 2,025 | 2,080 | 2,125 | 2,170 .Gifts | 139 | 145 | 148 | 175 | 170 | 150 | 150 .Auxiliary and Bureau Activities, Gross Revenues | 53,761 | 61,226 | 64,807 | 68,605 | 73,525 | 79,595 | 85,195 .Miscellaneous | 313 | 224 | 247 | 250 | 250 | 275 | 230 [[lines for totals]] Subtotal | 55,751 | 63,409 | 67,176 | 71,055 | 76,025 | 82,145 | 87,745 [[underlined]Restricted Trust[[/underlined] .Investments | 1,894 | 1,974 | 2,020 | 2,100 | 2,200 | 2,300 | 2,400 .Gifts, Grants & Contracts | 3,315| 1,429 | 1,366 | 1,500 | 1,800 | 1,800 | 1,800 .Miscellaneous | 900 | 987 | 1,494 | 1,500 | 1,400 | 1,400 | 1,400 [[lines for totals]] Subtotal | 6,109 | 4,390| 4,880 | 5,100 | 5,400 | 5,500 | 5,600 [[underlined]Federal Grants & Contracts[[/underlined] | 10,953 | 12,000 | 11,500 | 13,450 | 14,700 | 13,650 | 13,700 Total Income | 166,206 | 176,106 | 186,953 | 198,699 | 210,723 | 219,385 | 225,590 Less Expenses of Auxiliary and Bureau Activities | [[underlined]] (43,512) | (53,586) | (58,408) | (62,105) | (66,100) | (71,170) | (75,895) [[/underlined]] [[double-underlined]Net Funds Provided | 122,694 | 122,520 | 128,545 | 136,594| 144,623 | 148,215 | 149,695 [[/double-underlined]] [[/table]] 15 [[marginalia: -32-]]

TABLE 2 SMITHSONIAN INSTITUTION APPLICATION OF OPERATING FUNDS FY 1978 and PROJECTED THROUGH FY 1984 ($000's) [[table, 8 columns]] Application of Operating Funds | FY 1978 | FY 1979 | FY 1980 | FY 1981 | FY 1982 | FY 1983 | FY 1984 [[line]] [[underlined]] Science [[/underlined]] -Federal Salaries & Expenses | 36,839 | 37,636 | 40,222 | 41,723 | 43,246 | 43,957 | 43,432 -Unrestricted Trust | 1,079 | 1,084 | 784 | 861 | 882 | 908 | 920 -Restricted Trust | 1,275 | 1,580 | 1,626 | 1,600 | 1,525 | 1,500 | 1,625 -Federal Grants & Contracts | [[underlined]] 10,440 | 11,381 | 11,240 | 13,200 | 14,400 | 13,350 | 13,450 [[/underlined]] Subtotal | 49,633 | 51,681 | 53,872 | 57,384 | 60,053 | 59,715 | 59,427 [[underlined]] History & Art [[/underlined]] -Federal Salaries & Expenses | 15,339 | 15,928 | 17,668 | 19,405 | 21,396 | 21,813 | 21,367 -Unrestricted Trust | 1,007 | 1,111 | 1,196 | 1,196 | 1,230 | 1,256 | 1,279 -Restricted Trust | 2,616 | 2,792 | 3,425 | 3,803 | 3,753 | 3,803 | 3,953 -Federal Grants & Contracts | [[underlined]] 355 | 481 | 219 | 225 | 275 | 275 | 225 [[/underlined]] Subtotal | 19,317 | 20,312 | 22,508 | 24,629 | 26,654 | 27,147 | 26,824 [[underlined]] Museum Programs [[/underlined]] -Federal Salaries & Expenses | 7,350 | 7,559 | 8,106 | 8,794 | 9,483 | 10,106 | 10,500 -Unrestricted Trust | 240| 257 | 236 | 243 | 233 | 248 | 259 -Restricted Trust | 5 | 46 | 32 | 50 | 50 | 50 | 25 -Federal Grants & Contracts | [[underlined]] 15 | 44 | 11 | 50 | 50 | 50 | 50 [[/underlined]] Subtotal | 7,610 | 7,906 | 8,385 | 9,137 | 9,816 | 10,454 | 10,834 [[underlined]] Public Service [[/underlined]] -Federal Salaries & Expenses | 2,347 | 2,372 | 2,451 | 2,603 | 2,643 | 2,713 | 2,743 -Unrestricted Trust | 121 | 142 | 165 | 185 | 192 | 203 | 217 -Restricted Trust | 200 | 107 | 94 | 100 | 100 | 100 | 50 -Federal Grants & Contracts | [[underlined]] 89 | 77 | - | - | - | - | - [[/underlined]] Subtotal | 2,757 | 2,698 | 2,710 | 2,888 | 2,935 | 3,016 | 3,010 [[/table]] 16 [[marginalia: -33-]]

TABLE 2 SMITHSONIAN INSTITUTION APPLICATION OF OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 ($000's) [[table, 8 columns]] Application of Operating Funds | FY 1978 | FY 1979 | FY 1980 | FY 1981 | FY 1982 | FY 1983 | FY 1984 [[line]] [[underlined]]Membership, Development and Auxiliary Activities[[/underlined]] -Federal Salaries & Expenses | - | - | - | - | - | - | - -Unrestricted Trust | 219 | 245 | 256 | 270 | 282 | 295 | 310 -Restricted Trust | 5 | 5 | 5 | 5 | 15 | 15 | 65 -Federal Grants & Contracts | [[underlined]] 66 | 27 | 40 | 50 | 50 | 50 | 50 [[/underlined]] Subtotal | 290 | 277 | 301 | 325 | 347 | 360 | 425 [[underlined]]Administrative, Financial & Other Support Services[[/underlined]] -Federal Salaries & Expenses | 31,518 | 32,812 | 34,950 | 36,569 | 37,830 | 39,501 | 40,503 -Unrestricted Trust | 358 | 598 | 591 | 870 | 1,046 | 1,231 | 1,399 -Restricted Trust | 84 | 65 | 24 | 25 | 35 | 35 | 35 -Federal Grants & Contracts | [[underlined]] 50 | - | - | - | - | - | - [[/underlined]] Subtotal | 32,010 | 33,475 | 35,565 | 37,464 | 38,911 | 40,767 | 41,937 [[underlined]]Allotment for Research, Acquisitions, and Outreach[[/underlined]] -Unrestricted Trust | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 | 2,000 [[underlined]]Other Allotments[[/underlined]] - Fluid Research, James Smithson Society and Other -Unrestricted Trust | 531 | 1,304 | 1,254 | 1,305 | 1,290 | 1,594 | 1,916 [[/table]] 17 [[marginalia: -34-]]

SMITHSONIAN INSTITUTION APPLICATION OF OPERATING FUNDS TABLE 2 ( FY 1978 AND PROJECTED THROUGH FY 1984 ($000'S) [[table, 8 columns]] Application of Operating Funds | FY 1978 | FY 1979 | FY 1980 | FY 1981 | FY 1982 | FY 1983 | FY 1984 | [[underlined]] Transfers: [[/underlined]] -Current Funds: .Unrestricted Trust | 45 | 35 | 35 | 100 | 100 | 100 | 100 .Restricted Trust | (25) | (25) | (25) | (25) | (25) | (25) | (25) | (25) .Federal Grants & Contracts | (20) | (10 | (10) | (75) | (75) | (75) | (75) | (75) -Plant Improvements: .Unrestricted Trust | 725 | 100 | 60 | 100 | 500 | 700 | 800 -Endowment: .Unrestricted Trust | 4,750 | 2,600 | 2,100 | 2,100 | 2,100 | 2,100 | 2,100 .Restricted Trust | [[underlined]] 1,365 | 200 | 200 | 200 | 200 | 200 | 200 [[/underlined]] Subtotal | 6,840 | 2,900 | 2,360 | 2,400 | 2,800 | 3,000 | 3,100 [[underlined]] Net Changes in Fund Balance [[/underlined]] - Increase (Decrease) .Unrestricted Trust | 1,164 | 347 | 91 | (280) | 70 | 340 | 550 .Restricted Trust | 584 | (380) | (501) | (658) | (253) | (178) | (328) .Federal Grants & Contracts | [[underlined]] (42) | - | - | - | - | - | - [[/underlined]] Subtotal | 1,706 | (33) | (410) | (938) | (183) | 162 | 222 [[double-underlined]] Net Funds Applied | 122,694 | 122,520 | 128,545 | 136,594 | 144,623 | 148,215 | 149,695 [[/double-underlined]] [[marginalia: -35-]]

-36- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF SCIENCE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 TABLE 3(1) [[table, 15 columns]] Science | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Assistant Secretary .Federal S&E | 7 | 288 | 7 | 291 | 7 | 297 | 7 | 297 | 7 | 297 | 7 | 297 | 7 | 297 .Unrestricted Trust | - | 58 | - | 47 | - | 17 | - | 115 | - | 115 | - | 115 | - | 115 .Restricted Trust | - | 75 | - | 60 | 1 | 53 | 1 | 50 | 1 | 50 | 1 | 50 | 1 | 50 .Federal Grants & Contracts | [[underlined]] 12 | 375 | 13 | 504 | 13 | 541 | 11 | 500 | 10 | 500 | 10 | 500 | 10 | 500 [[/underlined]] Subtotal | 19 | 796 | 20 | 902 | 21 | 908 | 19 | 962 | 18 | 962 | 18 | 962 | 18 | 962 Center for the Study of Man .Federal S&E | 15 | 852 | 7 | 575 | 14 | 585 | 16 | 635 | 21 | 735 | 21 | 735 | 21 | 735 .Unrestricted Trust | - | 4 | - | 2 | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | 50 | 2 | 86 | - | 119 | - | 100 | - | 100 | - | 100 | - | 100 .Federal Grants & Contracts | [[underlined]] 1 | 80 | - | 73 | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 16 | 986 | 9 | 736 | 14 | 704 | 16 | 735 | 21 | 835 | 21 | 835 | 21 | 835 Chesapeake Bay Center for Environmental Studies .Federal S&E | 21 | 624 | 22 | 666 | 22 | 881 | 26 | 969 | 29 | 1043 | 31 | 1143 | 31 | 1143 .Unrestricted Trust | 1 | 181 | 1 | 109 | 1 | 71 | 1 | 72 | 1 | 80 | 1 | 80 | 1 | 85 .Restricted Trust | - | 20 | - | 11 | - | - | 1 | 25 | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] 19 | 422 | 33 | 865 | 20 | 416 | 10 | 200 | 10 | 200 | 10 | 200 | 15 300 [[/underlined]] Subtotal | 41 | 1,247 | 56 | 1,651 | 43 | 1,368 | 38 | 1,266 | 40 | 1,323 | 42 | 1,423 | 47 | 1,528 [[line]] [[/table]] 31

-37- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF SCIENCE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 TABLE 3 (2) [[table, 15 columns]] Science | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Fort Pierce Bureau .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | 7 | 400 | 7 | 478 | 7 | 483 | 7 | 500 | 7 | 500 | 8 | 525 | 8 | 550 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 7 | 400 | 7 | 478 | 7 | 483 | 7 | 500 | 7 | 500 | 8 | 525 | 8 | 550 International Environmental Science Program .Federal S&E | 2 | 380 | 2 | 384 | 2 | 435 | - | 485 | - | 565 | - | 610 | - | 610 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 2 | 380 | 2 | 384 | 2 | 435 | - | 485 | - | 565 | - | 610 | - | 610 National Air & Space Museum .Federal S&E | 230 | 6,018 | 229 | 5,859 | 229 | 5,854 | 231 | 6,054 | 233 | 6,104 | 233 | 6,104 | 233 | 6,104 .Unrestricted Trust | 17 | 813 (581) | 17 | 1,271 (728) | 17 | 1,227 (892) | 17 | 1,291 (950) | 18 | 1,300 (960) | 18 | 1,300 (955) | 18 | 1,300 (955) .Restricted Trust | 1 | 20 | 2 | 79 | 1 | 85 | 1 | 50 | 1 | 50 | 1 | 50 | 1 | 50 .Federal Grants & Contracts | [[underlined]] 11 | 227 | 9 | 250 | 9 | 139 | 5 | 200 | 5 | 250 | 5 | 250 | 5 | 250 [[/underlined]] Subtotal | 259 | 7,078 (581) | 257 | 7,459 (728) | 256 | 7,305 (892) | 254 | 7,595 (950) | 257 | 7,704 (960) | 257 | 7,704 (955) | 258 | 7,704 (955) [[line]] [[/table]] 32

-38- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF SCIENCE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 TABLE 3 (3) [[table, 15 columns]] SCIENCE | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] National Museum of Natural History .Federal S&E | 498 | 12,381 | 506 | 13,129 | 509 | 14,118 | 513 | 14,440 | 523 | 15,000 | 523 | 15,000 | 523 | 14,300 .Unrestricted Trust | 2 | 395 (5) | 2 | 149 (2) | 1 | 156 | 1 | 150 | 1 | 170 | 1 | 175 | 1 | 175 .Restricted Trust | 1 | 245 | 3 | 384 | 2 | 374 | 2 | 350 | 2 | 350 | 2 | 300 | 2 | 300 .Federal Grants & Contracts | [[underlined]] 33 | 976 | 39 | 1,015 | 49 | 1,155 | 45 | 1,100 | 50 | 1,200 | 50 | 1,200 | 50 | 1,200 [[/underlined]] Subtotal | 534 | 13,997 (5) | 550 | 14,677 (2) | 561 | 15,803 | 561 | 16,040 | 576 | 16,720 | 576 | 16,675 | 576 | 15,975 National Zoological Park .Federal S&E | 325 | 7,607 | 324 | 7,662 | 324 | 7,975 | 336 | 8,263 | 341 | 8,463 | 344 | 8,563 | 344 | 8,563 .Unrestricted Trust | - | 71 | - | 70 | - | 72 | - | 60 | - | 55 | - | 60 | - | 60 .Restricted Trust | - | 30 | - | 52 | - | 54 | - | 40 | - | 50 | - | 50 | - | 50 .Federal Grants & Contracts | [[underlined]] 4 | 112 | 3 | 70 | 3 | 78 | 3 | 100 | 4 | 150 | 3 | 100 | 3 | 100 [[/underline]] Subtotal | 329 | 7,820 | 327 | 7,854 | 327 | 8,179 | 339 | 8,463 | 345 | 8,718 | 347 | 8,773 | 347 | 8,773 Office of Fellowships and Grants .Federal S&E | 11 | 712 | 10 | 641 | 10 | 701 | 10 | 775 | 10 | 850 | 10 | 950 | 10 | 1,025 .Unrestricted Trust | 1 | 19 | 1 | 21 | 1 | 21 | 1 | 21 | 1 | 22 | 1 | 23 | 1 | 25 .Restricted Trust | - | 10 | - | 14 | 1 | 13 | - | 10 | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 12 | 741 | 11 | 676 | 12 | 735 | 11 | 806 | 11 | 872 | 11 | 973 | 11 | 1,050 [[line]] [[/table]] 33

-39- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF SCIENCE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 TABLE 3 (4) [[table, 15 columns]] SCIENCE | FY 1978 F/T EMPL. | $(000) | FY 1979 F/T EMPL. | $(000) | FY 1980 F/T EMPL. | $(000) | FY 1981 F/T EMPL. | $(000) | FY 1982 F/T EMPL. | $(000) | FY 1983 F/T EMPL. | $(000) | FY 1984 F/T EMPL. | $(000) [[line]] Research Awards Program .Federal S&E | - | 110 | - | 390 | - | 450 | - | 600 | - | 700 | - | 800 | - | 900 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | - | 110 | - | 390 | - | 450 | - | 600 | - | 700 | - | 800 | - | 900 Radiation Biology Laboratory .Federal S&E | 48 | 1,730 | 48 | 1,750 | 49 | 1,875 | 51 | 1,905 | 52 | 1,925 | 52 | 1,975 | 52 | 1,975 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | 25 | 1 | 32 | - | 15 | - | 25 | - | 25 | - | 25 | - | 25 .Federal Grants & Contracts | [[underlined]] 3 | 99 | 3 | 108 | 3 | 101 | 3 | 100 | 3 | 100 | 3 | 100 | 3 | 100 [[/underlined]] Subtotal | 51 | 1,854 | 52 | 1,890 | 52 | 1,991 | 54 | 2,030 | 55 | 2,050 | 55 | 2,100 | 55 | 2,100 [[line]] [[/table]] 34

-40- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF SCIENCE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 TABLE 3 (5) [[table, 15 columns]] SCIENCE | FY 1978 F/T EMPL. | $(000) | FY 1979 F/T EMPL. | $(000) | FY 1980 F/T EMPL. | $(000) | FY 1981 F/T EMPL. | $(000) | FY 1982 F/T EMPL. | $(000) | FY 1983 F/T EMPL. | $(000) | FY 1984 F/T EMPL. | $(000) [[line]] Smithsonian Astrophysical Observatory .Federal S&E | 73 | 4,508 | 73 | 4,546 | 78 | 4,847 | 83 | 5,000 | 86 | 5,209 | 89 | 5,325 | 89 | 5,325 .Unrestricted Trust | 72 | 1,890 | 74 | 1,920 | 74 | 1,959 | 74 | 2,105 | 74 | 2,255 | 74 | 2,405 | 74 | 2,605 (Overhead Recovery) | | (1,850) | | (1,870) | | (1,946) | | (2,100) | | (2,250) | | (2,400) | | (2,600) .Restricted Trust | - | 375 | 3 | 311 | 3 | 355 | 4 | 350 | 3 | 300 | 3 | 300 | 5 | 400 .Federal Grants & Contracts | [[underlined]] 149 | 8,137 | 158 | 8,496 | 127 | 8,810 | 137 | 11,000 | 144 | 12,000 | 135 | 11,000 | 135 | 11,000 [[/underlined]] Subtotal | 294 | 14,910 | 308 | 15,273 | 282 | 15,971 | 298 | 18,455 | 307 | 19,764 | 301 | 19,030 | 303 | 19,330 | | (1,850) | | (1,870) | | (1,946) | | (2,100) | | (2,250) | | ( 2,400) | | (2,600) Smithsonian Tropical Research Institute .Federal S&E | 65 | 1,629 | 67 | 1,743 | 74 | 2,204 | 79 | 2,300 | 82 | 2,355 | 85 | 2,455 | 85 | 2,455 .Unrestricted Trust | 3 | 113 | 3 | 127 | 3 | 133 | 3 | 130 | 3 | 125 | 3 | 140 | 3 | 145 | | (29) | | (32) | | (34) | | (33) | | (30) | | (35) | | (35) .Restricted Trust | - | 25 | 1 | 73 | 1 | 75 | 1 | 100 | 1 | 100 | 1 | 100 | 1 | 100 .Federal Grants & Contracts | [[underlined]] 1 | 12 | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 69 | 1,779 | 71 | 1,943 | 78 | 2,412 | 83 | 2,530 | 86 | 2,580 | 89 | 2,695 | 89 | 2,700 | | (29) | | (32) | | (34) | | (33) | | (30) | | (35) | | (35) [[line]] [[/table]] 35

-41- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF SCIENCE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 TABLE 3 (6) [[table, 15 columns]] SCIENCE | FY 1978 F/T EMPL. | $(000) | FY 1979 F/T EMPL. | $(000) | FY 1980 F/T EMPL. | $(000) | FY 1981 F/T EMPL. | $(000) | FY 1982 F/T EMPL. | $(000) | FY 1983 F/T EMPL. | $(000) | FY 1984 F/T EMPL. | $(000) [[line]] SCIENCE - TOTAL .Federal S&E | 1,295 | 36,839 | 1,295 | 37,636 | 1,318 | 40,222 | 1,352 | 41,723 | 1,384 | 43,246 | 1,395 | 43,957 | 1,395 | 43,412 .Unrestricted Trust | 96 | 3,544 | 98 | 3,716 | 97 | 3,656 | 97 | 3,944 | 98 | 4,122 | 98 | 4,298 | 99 | 4,510 .Restricted Trust | 9 | 1,275 | 19 | 1,580 | 16 | 1,626 | 17 | 1,600 | 15 | 1,525 | 16 | 1,500 | 18 | 1,625 .Federal Grants & Contracts | [[underlined]] 233 | 10,440 | 258 | 11,381 | 224 | 11,240 | 214 | 13,200 | 226 | 14,400 | 216 | 13,350 | 221 | 13,450 [[/underlined]] Gross Support | 1,633 | 52,098 | 1,670 | 54,313 | 1,655 | 56,744 | 1,680 | 60,467 | 1,723 | 63,293 | 1,725 | 63,105 | 1,733 | 63,017 (Less Overhead Recovery and Portion of Expenses Related to Auxiliary and Bureau Activities) | | (2,465) | | (2,632) | | (2,872) | | (3,083) | | (3,240) | | (3,390) | | (3,590) [[lines for totals]] Net Support | 1,633 | 49,633 | 1,670 | 51,681 | 1,655 | 53,872 | 1,680 | 57,384 | 1,723 | 60,053 | 1,725 | 59,715 | 1,733 | 59,427 [[line]] [[/table]] 36

-42- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF HISTORY AND ART OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 TABLE 4 (1) [[table, 15 columns]] HISTORY & ART | FY 1978 F/T EMPL. | $(000) | FY 1979 F/T EMPL. | $(000) | FY 1980 F/T EMPL. | $(000) | FY 1981 F/T EMPL. | $(000) | FY 1982 F/T EMPL. | $(000) | FY 1983 F/T EMPL. | $(000) | FY 1984 F/T EMPL. | $(000) [[line]] Assistant Secretary .Federal S&E | 4 | 136 | 4 | 133 | 4 | 190 | 4 | 190 | 4 | 190 | 4 | 190 | 4 | 190 .Unrestricted Trust | 1 | 78 | 1 | 135 | 1 | 64 | 1 | 66 | 1 | 67 | 1 | 68 | 1 | 71 .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 5 | 214 | 5 | 268 | 5 | 254 | 5 | 256 | 5 | 257 | 5 | 258 | 5 | 261 American & Folklife Studies .Federal S&E | 4 | 269 | 4 | 350 | 7 | 530 | 8 | 558 | 8 | 530 | 8 | 530 | 8 | 530 .Unrestricted Trust | 8 | 130 | 8 | 304 | 8 | 374 | 8 | 420 | 8 | 425 | 8 | 420 | 8 | 420 .Restricted Trust | - | 10 | 2 | 31 | - | 50 | - | 50 | - | 50 | - | 50 | - | 50 .Federal Grants & Contracts | [[underlined]] - | 123 | - | 44 | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 12 | 532 | 14 | 729 | 15 | 954 | 16 | 1,028 | 16 | 1,005 | 16 | 1,000 | 16 | 1,000 Archives of American Art .Federal S&E | 17 | 425 | 17 | 478 | 17 | 523 | 19 | 590 | 20 | 620 | 21 | 651 | 21 | 662 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | 10 | 270 | 10 | 269 | 10 | 253 | 10 | 253 | 10 | 253 | 10 | 253 | 10 | 253 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 27 | 695 | 27 | 747 | 27 | 776 | 29 | 843 | 30 | 873 | 31 | 904 | 31 | 915 [[line]] [[/table]] 48

-43- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 4 (2) APPLICATION OF HISTORY AND ART OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] HISTORY & ART | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Cooper-Hewitt Museum .Federal S&E | 19 | 353 | 20 | 560 | 22 | 638 | 23 | 665 | 24 | 717 | 24 | 742 | 25 | 777 .Unrestricted Trust | 12 | 327 | 12 | 300 | 12 | 320 | 12 | 320 | 12 | 335 | 12 | 350 | 12 | 370 .Restricted Trust | 21 | 748 | 24 | 783 | 23 | 857 | 23 | 900 | 23 | 950 | 23 | 1,000 | 23 | 1,000 .Federal Grants & Contracts | [[underlined]] - | 56 | 3 | 61 | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 52 | 1,484 | 59 | 1,704 | 57 | 1,815 | 58 | 1,885 | 59 | 2,002 | 59 | 2,092 | 60 | 2,147 Freer Gallery of Art .Federal S&E | 30 | 583 | 30 | 588 | 29 | 626 | 31 | 791 | 32 | 884 | 33 | 947 | 33 | 997 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | 17 | 947 | 20 | 1,070 | 22 | 1,098 | 22 | 1,100 | 22 | 1,450 | 22 | 1,450 | 22 | 1,200 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 47 | 1,530 | 50 | 1,658 | 51 | 1,724 | 53 | 1,891 | 54 | 2,334 | 55 | 2,397 | 55 | 2,197 Hirshhorn Museum .Federal S&E | 83 | 2,043 | 80 | 2,055 | 80 | 2,118 | 85 | 2,371 | 86 | 2,544 | 86 | 2,744 | 88 | 2,628 .Unrestricted Trust | - | 26 | - | 33 | - | 80 | - | 63 | - | 64 | - | 64 | - | 64 .Restricted Trust | 2 | 76 | - | 108 | - | 350 | - | 50 | - | 50 | - | 50 | - | 50 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 85 | 2,145 | 80 | 2,196 | 80 | 2,548 | 85 | 2,484 | 86 | 2,658 | 86 | 2,858 | 88 | 2,742 [[line]] [[/table]] 49

-44- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 4 (3) APPLICATION OF HISTORY AND ART OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] HISTORY & ART | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Joseph Henry Papers .Federal S&E | 4 | 112 | 5 | 143 | 5 | 150 | 6 | 180 | 8 | 222 | 9 | 264 | 9 | 287 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | 5 | - | 1 | - | 1 | 1 | 50 | 1 | 50 | 1 | 50 | 1 | 50 .Federal Grants & Contracts | [[underlined]] 2 | 45 | 1 | 18 | 1 | 19 | 1 | 25 | 1 | 25 | 1 | 25 | 1 | 25 [[/underlined]] Subtotal | 6 | 162 | 6 | 162 | 6 | 170 | 8 | 255 | 10 | 297 | 11 | 339 | 11 | 362 Museum of African Art .Federal S&E | - | - | - | - | 30 | 700 | 31 | 800 | 32 | 900 | 33 | 950 | 34 | 1,000 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | 10 | 350 | 10 | 350 | 12 | 400 | 12 | 400 | 12 | 400 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | - | - | - | - | 40 | 1,050 | 41 | 1,150 | 44 | 1,300 | 45 | 1,350 | 46 | 1,400 National Collection of Fine Arts .Federal S&E | 106 | 2,814 | 106 | 2,996 | 106 | 3,133 | 107 | 3,357 | 107 | 3,581 | 108 | 3,805 | 108 | 4,029 .Unrestricted Trust | - | 265 | - | 101 | - | 87 | - | 66 | - | 67 | - | 67 | - | 67 .Restricted Trust | - | 70 | - | 85 | - | 42 | - | 550 | - | 50 | - | 50 | - | 50 .Federal Grants & Contracts | [[underlined]] - | 37 | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 106 | 3,186 | 106 | 3,182 | 106 | 3,262 | 107 | 3,973 | 107 | 3,698 | 108 | 3,922 | 108 | 4,146 [[line]] [[/table]] 50

-45- [[landscape orientation]] SMITHSONIAN INSTITUTION APPLICATION OF HISTORY AND ART OPERATING FUNDS TABLE 4 (4) FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] HISTORY & ART | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] National Museums of History & Technology .Federal S&E | 274 | 6,497 | 274 | 6,408 | 279 | 6,784 | 285 | 7,387 | 291 | 8,637 | 299 | 8,371 | 301 | 7,600 .Unrestricted Trust | 1 | 158 | 1 | 210 | 1 | 244 | 1 | 250 | 1 | 255 | 1 | 275 | 1 | 275 | | (16) | | (10) | | (9) | | (10) | | (10) | | (10) | | (10) .Restricted Trust | 1 | 380 | - | 349 | 1 | 336 | 1 | 300 | 1 | 300 | 1 | 300 | 1 | 300 .Federal Grants & Contracts | [[underlined]] - | 10 | 1 | 358 | 1 | 200 | 1 | 200 | 2 | 250 | 1 | 250 | 1 | 200 [[/underlined]] Subtotal | 276 | 7,045 | 276 | 7,325 | 282 | 7,564 | 288 | 8,137 | 295 | 9,442 | 302 | 9,196 | 304 | 8,375 | | (16) | | (10) | | (9) | | (10) | | (10) | | (10) | | (10) National Portrait Gallery .Federal S&E | 75 | 2,107 | 78 | 2,217 | 76 | 2,276 | 77 | 2,516 | 80 | 2,571 | 81 | 2,619 | 81 | 2,667 .Unrestricted Trust | - | 39 | - | 38 | - | 36 | - | 21 | - | 27 | - | 22 | - | 22 .Restricted Trust | - | 110 | 2 | 96 | 2 | 88 | 2 | 200 | 2 | 200 | 2 | 200 | 1 | 600 .Federal Grants & Contracts | [[underlined]] 3 | 84 | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 78 | 2,340 | 80 | 2,351 | 78 | 2,400 | 79 | 2,737 | 82 | 2,798 | 83 | 2,841 | 82 | 3,289 [[line]] [[/table]] 51

-46- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 4 (5) APPLICATION OF HISTORY AND ART OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] HISTORY & ART | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] History & Art - Total .Federal S&E | 616 | 15,339 | 618 | 15,928 | 655 | 17,668 | 676 | 19,405 | 692 | 21,396 | 706 | 21,813 | 712 | 21,367 .Unrestricted Trust | 22 | 1,023 | 22 | 1,121 | 22 | 1,205 | 22 | 1,206 | 22 | 1,240 | 22 | 1,266 | 22 | 1,289 .Restricted Trust | 51 | 2,616 | 58 | 2,792 | 68 | 3,425 | 69 | 3,803 | 71 | 3,753 | 71 | 3,803 | 70 | 3,953 .Federal Grants & Contracts | [[underlined]] 5 | 355 | 5 | 481 | 2 | 219 | 2 | 225 | 3 | 275 | 2 | 275 | 2 | 225 [[/underlined]] Gross Support | 694 | 19,333 | 703 | 20,322 | 747 | 22,517 | 769 | 24,639 | 788 | 26,664 | 801 | 27,157 | 806 | 26,834 (Less Portion of Expenses Related to Auxiliary and Bureau Activities) | | (16) | | (10 ) | | (9) | | (10) | | (10) | | (10) | | (10) [[lines for totals]] Net Support | 694 | 19,317 | 703 | 20,312 | 747 | 22,508 | 769 | 24,629 | 788 | 26,654 | 801 | 27,147 | 806 | 26,824 [[line]] [[/table]] 52

-47- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 5 (1) APPLICATION OF MUSEUM PROGRAMS OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MUSEUM PROGRAMS | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Assistant Secretary .Federal S&E | 7 | 228 | 7 | 244 | 7 | 251 | 7 | 291 | 7 | 311 | 7 | 331 | 7 | 331 .Unrestricted Trust | - | 63 (41) | - | 6 | - | 7 | - | 3 | - | 3 | - | 3 | - | 3 .Restricted Trust | - | 5 | - | 9 | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 7 | 296 (41) | 7 | 259 | 7 | 258 | 7 | 294 | 7 | 314 | 7 | 334 | 7 | 334 Conservation Analytical Laboratory .Federal S&E | 23 | 656 | 23 | 667 | 25 | 728 | 28 | 785 | 34 | 910 | 50 | 1,200 | 50 | 1,200 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 23 | 656 | 23 | 667 | 25 | 728 | 28 | 785 | 34 | 910 | 50 | 1,200 | 50 | 1,200 National Museum Act .Federal S&E | 3 | 794 | 3 | 795 | 3 | 798 | 3 | 1,000 | 3 | 1,000 | 3 | 1,000 | 3 | 1,000 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 3 | 794 | 3 | 795 | 3 | 798 | 3 | 1,000 | 3 | 1,000 | 3 | 1,000 | 3 | 1,000 [[line]] [[/table]] 64

-48- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 5 (2) APPLICATION OF MUSEUM PROGRAMS OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MUSEUM PROGRAMS | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Office of Museum Programs .Federal S&E | 11 | 291 | 12 | 288 | 13 | 322 | 14 | 334 | 15 | 349 | 16 | 364 | 16 | 379 .Unrestricted Trust | - | 14 | - | 19 | - | 21 | - | 10 | - | 10 | - | 10 | - | 10 .Restricted Trust | - | - | - | 9 | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 11 | 305 | 12 | 316 | 13 | 343 | 14 | 344 | 15 | 359 | 16 | 374 | 16 | 389 Office of the Registrar .Federal S&E | 4 | 102 | 4 | 105 | 4 | 108 | 4 | 108 | 7 | 171 | 7 | 171 | 7 | 171 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 4 | 102 | 4 | 105 | 4 | 108 | 4 | 108 | 7 | 171 | 7 | 171 | 7 | 171 Office of Exhibits Central .Federal S&E | 50 | 1,149 | 47 | 1,131 | 47 | 1,149 | 48 | 1,162 | 56 | 1,286 | 56 | 1,286 | 56 | 1,286 .Unrestricted Trust | 1 | 31 | 1 | 21 | - | 6 | - | 5 | - | 5 | - | 5 | - | 5 | | (31) | | (21) | | (2) | | | | | | | | .Restricted Trust | - | - | - | 26 | - | 30 | - | 50 | - | 50 | - | 50 | - | 50 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 51 | 1,180 | 48 | 1,178 | 47 | 1,185 | 48 | 1,217 | 56 | 1,341 | 56 | 1,341 | 56 | 1,316 | | (31) | | (21) | | (2) | | | | | | | | [[line]] [[/table]] 65

-49- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 5 (3) APPLICATION OF MUSEUM PROGRAMS OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MUSEUM PROGRAMS | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Office of Horticulture .Federal S&E | 28 | 670 | 30 | 716 | 37 | 874 | 45 | 996 | 48 | 1,200 | 51 | 1,274 | 54 | 1,347 .Unrestricted Trust | 1 | 33 | 1 | 19 | - | 23 (23) | - | 20 (10) | - | 20 (10) | - | 25 (10) | - | 25 (10) .Restricted Trust | - | - | - | 1 | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 29 | 703 | 31 | 736 | 37 | 897 (23) | 45 | 1,016 (10) | 48 | 1,220 (10) | 51 | 1,299 (10) | 54 | 1,372 (10) Office of International Activities .Federal S&E | 5 | 62 | 5 | 136 | 5 | 138 | 5 | 173 | 5 | 209 | 5 | 244 | 5 | 279 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 5 | 62 | 5 | 136 | 5 | 138 | 5 | 173 | 5 | 209 | 5 | 244 | 5 | 279 Smithsonian Archives .Federal S&E | 13 | 288 | 13 | 295 | 13 | 324 | 14 | 336 | 15 | 336 | 15 | 336 | 15 | 336 .Unrestricted Trust | 1 | 24 | 1 | 35 | 1 | 36 | 1 | 38 | 1 | 19 | 1 | 20 | 1 | 21 .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 14 | 312 | 14 | 330 | 14 | 360 | 15 | 374 | 16 | 355 | 16 | 356 | 16 | 357 [[line]] [[/table]] 66

-50- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 5 (4) APPLICATION OF MUSEUM PROGRAMS OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MUSEUM PROGRAMS | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Smithsonian Libraries .Federal S&E | 97 | 2,262 | 95 | 2,382 | 91 | 2,570 | 97 | 2,682 | 103 | 2,741 | 113 | 2,910 | 128 | 3,161 .Unrestricted Trust | 9 | 148 | 9 | 178 | 9 | 168 | 9 | 177 | 9 | 186 | 9 | 195 | 9 | 205 .Restricted Trust | - | - | - | 1 | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 106 | 2,410 | 104 | 2,561 | 100 | 2,740 | 106 | 2,859 | 112 | 2,927 | 122 | 3,105 | 137 | 3,366 Smithsonian Institution Traveling Exhibition Service .Federal S&E | 6 | 156 | 6 | 144 | 6 | 149 | 9 | 200 | 9 | 218 | 9 | 238 | 9 | 258 .Unrestricted Trust | 14 | 537 (537) | 14 | 595 (595) | 14 | 684 (684) | 14 | 690 (690) | 14 | 725 (725) | 14 | 750 (750) | 14 | 765 (765) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | 15 | - | 44 | - | 11 | 1 | 50 | 1 | 50 | 1 | 50 | 1 | 50 [[/underlined]] Subtotal | 20 | 708 (537) | 20 | 783 (595) | 20 | 844 (684) | 24 | 940 (690) | 24 | 993 (725) | 24 | 1,038 (750) | 24 | 1,073 (765) South Group Buildings Manager .Federal S&E | 46 | 692 | 42 | 656 | 40 | 695 | 45 | 727 | 47 | 752 | 47 | 752 | 47 | 752 .Unrestricted Trust | - | (1) | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | 1 | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 46 | 691 | 42 | 656 | 40 | 695 | 45 | 727 | 47 | 752 | 47 | 752 | 47 | 752 [[line]] [[/table]] 67

-51- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 5 (5) APPLICATION OF MUSEUM PROGRAMS OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MUSEUM PROGRAMS | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Museum Programs Total .Federal S&E | 293 | 7,350 | 287 | 7,559 | 291 | 8,106 | 319 | 8,794 | 349 | 9,483 | 379 | 10,106 | 397 | 10,500 .Unrestricted Trust | 26 | 849 | 26 | 873 | 24 | 945 | 24 | 943 | 24 | 968 | 24 | 1,008 | 24 | 1,034 .Restricted Trust | - | 5 | - | 46 | - | 32 | - | 50 | - | 50 | - | 50 | - | 25 .Federal Grants & Contracts | [[underlined]] - | 15 | - | 44 | - | 11 | 1 | 50 | 1 | 50 | 1 | 50 | 1 | 50 [[/underlined]] Subtotal | 319 | 8,219 | 313 | 8,522 | 315 | 9,094 | 344 | 9,837 | 374 | 10,551 | 404 | 11,214 | 422 | 11,609 (Less Portion of Expenses Related to Auxiliary and Bureau Activities) | [[underlined]] - | (609) | - | (616) | - | (709) | - | (700) | - | (735) | - | (760) | - | (775) [[/underlined]] Net Support | 319 | 7,610 | 313 | 7,906 | 315 | 8,385 | 344 | 9,137 | 374 | 9,816 | 404 | 10,454 | 422 | 10,834 [[line]] [[/table]] 68

-52- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 6 (1) APPLICATION OF PUBLIC SERVICE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] PUBLIC SERVICE | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Assistant Secretary .Federal S&E | 8 | 204 | 7 | 192 | 7 | 199 | 7 | 205 | 7 | 205 | 7 | 205 | 7 | 205 .Unrestricted Trust | 1 | 13 | 1 | 37 | 2 | 41 | 2 | 52 | 2 | 55 | 2 | 58 | 2 | 63 .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 9 | 217 | 8 | 229 | 9 | 240 | 9 | 257 | 9 | 260 | 9 | 263 | 9 | 268 Anacostia Neighborhood Museum .Federal S&E | 19 | 617 | 19 | 624 | 19 | 636 | 19 | 665 | 19 | 700 | 20 | 750 | 20 |780 .Unrestricted Trust | 1 | 34 | 1 | 24 | 1 | 28 | 1 | 35 | 1 | 36 | 1 | 38 | 1 | 44 .Restricted Trust | 8 | 75 | - | 74 | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 28 | 726 | 20 | 722 | 20 | 664 | 20 | 700 | 20 | 736 | 21 | 788 | 21 | 824 Division of Performing Arts .Federal S&E | 9 | 336 | 9 | 333 | 9 | 341 | 10 | 435 | 10 | 435 | 10 | 435 | 10 | 435 .Unrestricted Trust | 12 | 1,855 (1,850) | 14 | 2,090 (2,090) | 14 | 2,125 (2,125) | 14 | 2,200 (2,200) | 14 | 2,260 (2,250) | 14 | 2,310 (2,300) | 14 | 2,385 (2,375) .Restricted Trust | - | 65 | - | 30 | - | 90 | - | 50 | - | 50 | - | 50 | - | 50 .Federal Grants & Contracts | [[underlined]] 2 | 89 | 1 | 77 | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 23 | 2,345 (1,850) | 24 | 2,530 (2,090) | 23 | 2,556 (2,125) | 24 | 2,685 (2,200) | 24 | 2,745 (2,250) | 24 | 2,795 (2,300) | 24 | 2,870 (2,375) [[line]] [[/table]] 76

-53- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 6 (2) APPLICATION OF PUBLIC SERVICE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] PUBLIC SERVICE | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] International Exchange Service .Federal S&E | 8 | 232 | 5 | 213 | 5 | 218 | 5 | 218 | 5 | 218 | 5 | 218 | 5 | 218 .Unrestricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 8 | 232 | 5 | 213 | 5 | 218 | 5 | 218 | 5 | 218 | 5 | 218 | 5 | 218 Office of Elementary & Secondary Education .Federal S&E | 5 | 141 | 6 | 166 | 6 | 180 | 6 | 190 | 6 | 190 | 6 | 210 | 6 | 210 .Unrestricted Trust | - | 10 | - | - | - | - | - | - | - | - | - | - | - | - .Restricted Trust | - | 10 | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 5 | 161 | 6 | 166 | 6 | 180 | 6 | 190 | 6 | 190 | 6 | 210 | 6 | 210 Office of Symposia & Seminars .Federal S&E | 2 | 48 | 3 | 58 | 3 | 65 | 3 | 70 | 3 | 75 | 3 | 75 | 3 | 75 .Unrestricted Trust | 1 | 71 (12) | 1 | 81 | 1 | 96 | 1 | 98 | 1 | 91 | 1 | 97 | 1 | 100 .Restricted Trust | - | 50 | - | - | - | - | - | 50 | - | 50 | - | 50 | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 3 | 169 (12) | 4 | 139 | 4 | 161 | 4 | 218 | 4 | 216 | 4 | 222 | 4 | 175 [[line]] [[/table]] 77

-54- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 6 (3) APPLICATION OF PUBLIC SERVICE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] PUBLIC SERVICE | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Office of Telecommunications .Federal S&E | 2 | 39 | 2 | 40 | 2 | 47 | 2 | 50 | 2 | 50 | 2 | 50 | 2 | 50 .Unrestricted Trust | 7 | 275 (275) | 7 | 311 (311) | 7 | 359 (359) | 8 | 380 (380) | 8 | 400 (400) | 9 | 425 (425) | 9 | 450 (450) .Restricted Trust | - | - | - | 3 | - | 4 | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 9 | 314 (275) | 9 | 354 (311) | 9 | 410 (359) | 10 | 430 (380) | 10 | 450 (400) | 11 | 475 (425) | 11 | 500 (450) Smithsonian Exposition Books Program .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 10 | 2,300 (2,300) | 12 | 3,410 (3,410) | 12 | 3,177 (3,177) | 12 | 3,250 (3,250) | 12 | 3,650 (3,650) | 12 | 4,100 (4,100) | 12 | 4,900 (4,900) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 10 | 2,300 (2,300) | 12 | 3,410 (3,410) | 12 | 3,177 (3,177) | 12 | 3,250 (3,250) | 12 | 3,650 (3,650) | 12 | 4,100 (4,100) | 12 | 4,900 (4,900) Smithsonian Magazine .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 70 | 20,950 (20,950) | 70 | 24,005 (24,005) | 70 | 26,417 (26,417) | 71 | 28,500 (28,500) | 71 | 30,000 (30,000) | 72 | 32,500 (32,500) | 72 | 34,000 (34,000) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 70 | 20,950 (20,950) | 70 | 24,005 (24,005) | 70 | 26,417 (26,417) | 71 | 28,500 (28,500) | 71 | 30,000 (30,000) | 72 | 32,500 (32,500) | 72 | 34,000 (34,000) [[line]] [[/table]] 78

-55- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 6 (4) APPLICATION OF PUBLIC SERVICE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] PUBLIC SERVICE | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Smithsonian Press .Federal S&E | 28 | 730 | 28 | 746 | 29 | 765 | 29 | 770 | 29 | 770 | 29 | 770 | 29 | 770 .Unrestricted Trust | 3 | 559 (559) | 4 | 629 (629) | 4 | 692 (692) | 4 | 700 (700) | 4 | 725 (725) | 4 | 735 (735) | 4 | 750 (750) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 31 | 1,289 (559) | 32 | 1,375 (629) | 33 | 1,457 (692) | 33 | 1,470 (700) | 33 | 1,495 (725) | 33 | 1,505 (735) | 33 | 1,520 (750) Visitors Information & Associates Reception Center .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 16 | 220 (220) | 16 | 280 (280) | 18 | 320 (320) | 18 | (330) 330 | 18 | 340 (340) | 20 | 360 (360) | 20 | 375 (375) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 16 | 220 (220) | 16 | 280 (280) | 18 | 320 (320) | 18 | (330) 330 | 18 | 340 (340) | 20 | 360 (360) | 20 | 375 (375) [[line]] [[/table]] 79

-56- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 6 (5) APPLICATION OF PUBLIC SERVICE OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] PUBLIC SERVICE | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] PUBLIC SERVICE - TOTAL .Federal S&E | 81 | 2,347 | 79 | 2,372 | 80 | 2,451 | 81 | 2,603 | 81 | 2,643 | 82 | 2,713 | 82 | 2,743 .Unrestricted Trust | 121 | 26,287 | 126 | 30,867 | 129 | 33,255 | 131 | 35,545 | 131 | 37,557 | 135 | 40,623 | 135 | 43,067 .Restricted Trust | 8 | 200 | - | 107 | - | 94 | - | 100 | - | 100 | - | 100 | - | 100 .Federal Grants & Contracts | [[underlined]] 2 | 89 | 1 | 77 | - | - | - | - | - | - | - | - | - | - [[/underlined]] Gross Support | 212 | 28,923 | 206 | 33,423 | 209 | 35,800 | 212 | 38,248 | 212 | 40,300 | 217 | 43,436 | 217 | 45,860 (Less Portion of Expenses Related to Auxiliary and Bureau Activities) | [[underlined]] | (26,166) | | (30,725) | | (33,090) | | (35,360) | | (37,365) | | (40,420) | | (42,850) [[/underlined]] Net Support | 212 | 2,757 | 206 | 2,698 | 209 | 2,710 | 212 | 2,888 | 212 | 2,935 | 217 | 3,016 | 217 | 3,010 [[line]] [[/table]] 80

-57- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 7 (1) APPLICATION OF MEMBERSHIP, DEVELOPMENT, AND AUXILIARY ACTIVITIES OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MEMBERSHIP, DEVELOPMENT, & AUXILIARY ACTIVITIES | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] [[underlined]]MEMBERSHIP AND DEVELOPMENT[[/underlined]] Office of Membership & Development .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 7 | 219 | 8 | 245 | 8 | 256 | 8 | 270 | 8 | 282 | 8 | 295 | 8 | 310 .Restricted Trust | - | 5 | - | 5 | - | 5 | - | 5 | - | 15 | - | 15 | - | 15 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 7 | 224 | 8 | 250 | 8 | 261 | 8 | 275 | 8 | 297 | 8 | 310 | 8 | 325 National Associates Program .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 15 | 3,172 (3,172) | 17 | 4,749 (4,749) | 17 | 5,265 (5,265) | 18 | 5,430 (5,430) | 19 | 5,530 (5,530) | 19 | 5,645 (5,645) | 19 | 5,830 (5,830) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 15 | 3,172 (3,172) | 17 | 4,749 (4,749) | 17 | 5,265 (5,265) | 18 | 5,430 (5,430) | 19 | 5,530 (5,530) | 19 | 5,645 (5,645) | 19 | 5,830 (5,830) [[line]] [[/table]] 87

-58- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 7 (2) APPLICATION OF MEMBERSHIP, DEVELOPMENT, AND AUXILIARY ACTIVITIES OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MEMBERSHIP, DEVELOPMENT, & AUXILIARY ACTIVITIES | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Resident Associates Program .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 37 | 1,684 (1,684) | 37 | 1,993 (1,993) | 37 | 2,232 (2,232) | 37 | 2,300 (2,300) | 38 | 2,380 (2,380) | 38 | 2,400 (2,400) | 38 | 2,500 (2,500) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | 50 .Federal Grants & Contracts | [[underlined]] - | 66 | - | 27 | - | 40 | - | 50 | - | 50 | - | 50 | - | 50 [[/underlined]] Subtotal | 37 | 1,750 (1,684) | 37 | 2,020 (1,993) | 37 | 2,272 (2,232) | 37 | 2,350 (2,300) | 38 | 2,430 (2,380) | 38 | 2,450 (2,400) | 38 | 2,600 (2,500) Foreign Study Tours .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 3 | 853 (853) | 3 | 1,500 (1,500) | 3 | 1,505 (1,505) | 3 | 1,550 (1,550) | 3 | 1,600 (1,600) | 3 | 1,665 (1,665) | 3 | 1,850 (1,850) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 3 | 853 (853) | 3 | 1,500 (1,500) | 3 | 1,505 (1,505) | 3 | 1,550 (1,550) | 3 | 1,600 (1,600) | 3 | 1,665 (1,665) | 3 | 1,850 (1,850) [[line]] [[/table]] 88

-59- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 7 (3) APPLICATION OF MEMBERSHIP, DEVELOPMENT, AND AUXILIARY ACTIVITIES OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MEMBERSHIP, DEVELOPMENT, & AUXILIARY ACTIVITIES | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] [[underlined]]AUXILIARY ACTIVITIES[[/underlined]] Belmont Conference Center .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 8 | 325 (325) | 8 | 399 (399) | 8 | 367 (367) | 8 | 370 (370) | 8 | 395 (395) | 8 | 410 (410) | 8 | 425 (425) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 8 | 325 (325) | 8 | 399 (399) | 8 | 367 (367) | 8 | 370 (370) | 8 | 395 (395) | 8 | 410 (410) | 8 | 425 (425) Business Management Office .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 2 | 100 (100) | 3 | 140 (140) | 3 | 161 (161) | 3 | 175 (175) | 3 | 190 (190) | 3 | 200 (200) | 3 | 200 (200) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 2 | 100 (100) | 3 | 140 (140) | 3 | 161 (161) | 3 | 175 (175) | 3 | 190 (190) | 3 | 200 (200) | 3 | 200 (200) [[line]] [[/table]] 89

-60- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 7 (4) APPLICATION OF MEMBERSHIP, DEVELOPMENT, AND AUXILIARY ACTIVITIES OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MEMBERSHIP, DEVELOPMENT, & AUXILIARY ACTIVITIES | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Concessions & Product Development .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 3 | 203 (203) | 3 | 219 (219) | 3 | 234 (234) | 3 | 245 (245) | 3 | 240 (240) | 3 | 240 (240) | 3 | 250 (250) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 3 | 203 (203) | 3 | 219 (219) | 3 | 234 (234) | 3 | 245 (245) | 3 | 240 (240) | 3 | 240 (240) | 3 | 250 (250) Mail Order Activities .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 20 | 2,987 (2,987) | 23 | 5,172 (5,172) | 24 | 6,059 (6,059) | 25 | 6,500 (6,500) | 25 | 7,400 (7,400) | 26 | 8,350 (8,350) | 26 | 9,300 (9,300) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 20 | 2,987 (2,987) | 23 | 5,172 (5,172) | 24 | 6,059 (6,059) | 25 | 6,500 (6,500) | 25 | 7,400 (7,400) | 26 | 8,350 (8,350) | 26 | 9,300 (9,300) Museum Shops .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 100 | 6,301 (6,301) | 101 | 6,649 (6,649) | 101 | 7,098 (7,098) | 103 | 7,750 (7,750) | 103 | 8,450 (8,450) | 105 | 9,200 (9,200) | 105 | 9,900 (9,900) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 100 | 6,301 (6,301) | 101 | 6,649 (6,649) | 101 | 7,098 (7,098) | 103 | 7,750 (7,750) | 103 | 8,450 (8,450) | 105 | 9,200 (9,200) | 105 | 9,900 (9,900) [[line]] [[/table]] 90

-61- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 7 (5) APPLICATION OF MEMBERSHIP, DEVELOPMENT, AND AUXILIARY ACTIVITIES OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] MEMBERSHIP, DEVELOPMENT, & AUXILIARY ACTIVITIES | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] MEMBERSHIP, DEVELOPMENT, & AUXILIARY ACTIVITIES - TOTAL .Federal S&E | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Unrestricted Trust | 195 | 15,844 | 203 | 21,066 | 204 | 23,127 | 208 | 24,590 | 210 | 26,467 | 213 | 28,405 | 213 | 30,565 .Restricted Trust | - | 5 | - | 5 | - | 5 | - | 5 | - | 15 | - | 15 | - | 65 .Federal Grants & Contracts | [[underlined]] - | 66 | - | 27 | - | 40 | - | 50 | - | 50 | - | 50 | - | 50 [[/underlined]] Gross Expenses | 195 | 15,915 | 203 | 21,098 | 204 | 23,222 | 208 | 24,645 | 210 | 26,532 | 213 | 28,470 | 213 | 30,680 (Less portion of expenses related to auxiliary and bureau activities) | [[underlined]] - | (15,625) | - | (20,821) | - | (22,921) | - | (24,320) | - | (26,185) | - | (28,110) | - | (30,255) [[/underlined]] Net Expenses | 195 | 290 | 203 | 277 | 204 | 301 | 208 | 325 | 210 | 347 | 213 | 360 | 213 | 425 [[line]] [[/table]] 91

-62- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 8 (1) APPLICATION OF ADMINISTRATIVE, FINANCIAL AND OTHER SUPPORT SERVICES OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] Administrative, Financial, and Other Support Services | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Central Management Services .Federal S&E | 56 | 1,755 | 56 | 1,772 | 56 | 1,801 | 60 | 1,880 | 60 | 1,891 | 61 | 1,921 | 61 | 1,932 .Unrestricted Trust | 28 | 1,031 | 28 | 1,213 | 30 | 1,266 | 30 | 1,357 | 30 | 1,411 | 30 | 1,492 | 30 | 1,538 .Restricted Trust | 1 | 44 | 1 | 49 | - | 24 | - | 25 | - | 35 | - | 35 | - | 35 .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 85 | 2,830 | 85 | 3,034 | 86 | 3,091 | 90 | 3,262 | 90 | 3,337 | 91 | 3,448 | 91 | 3,505 Specialized Administrative & Technical Offices .Federal S&E | 219 | 5,491 | 222 | 6,003 | 234 | 6,573 | 251 | 7,089 | 261 | 7,339 | 268 | 7,580 | 271 | 7,671 .Unrestricted Trust | 134 | 2,942 (420) | 143 | 3,647 (571) | 144 | 4,046 (668) | 151 | 4,248 (675) | 151 | 4,460 (690) | 152 | 4,649 (705) | 152 | 4,856 (715) .Restricted Trust | 2 | 40 | - | 16 | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | 50 | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 355 | 8,523 (420) | 365 | 9,666 (571) | 378 | 10,619 (668) | 402 | 11,337 (675) | 412 | 11,799 (690) | 420 | 12,229 (705) | 423 | 12,527 (715) Maintenance & Protection .Federal S&E | 868 | 24,272 | 871 | 25,037 | 872 | 26,576 | 911 | 27,600 | 935 | 28,600 | 1,016 | 30,000 | 1,048 | 30,900 .Unrestricted Trust | 5 | 376 (61) | 5 | 545 (81) | 5 | 590 (85) | 5 | 625 (85) | 5 | 655 (90) | 5 | 690 (95) | 5 | 720 (100) .Restricted Trust | - | - | - | - | - | - | - | - | - | - | - | - | - | - .Federal Grants & Contracts | [[underlined]] - | - | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Subtotal | 873 | 24,648 (61) | 876 | 25,582 (81) | 877 | 27,166 (85) | 916 | 28,225 (85) | 940 | 29,255 (90) | 1,021 | 30,690 (95) | 1,053 | 31,620 (100) [[line]] [[/table]] 101

-63- [[landscape orientation]] SMITHSONIAN INSTITUTION TABLE 8 (2) APPLICATION OF ADMINISTRATIVE, FINANCIAL AND OTHER SUPPORT SERVICES OPERATING FUNDS FY 1978 AND PROJECTED THROUGH FY 1984 [[table, 15 columns]] Administrative, Financial, and Other Support Services | FY 1978 F/T EMPL. | $ (000) | FY 1979 F/T EMPL. | $ (000) | FY 1980 F/T EMPL. | $ (000) | FY 1981 F/T EMPL. | $ (000) | FY 1982 F/T EMPL. | $ (000) | FY 1983 F/T EMPL. | $ (000) | FY 1984 F/T EMPL. | $ (000) [[line]] Administrative, Financial, and Other Support Services - Total .Federal S&E | 1,143 | 31,518 | 1,149 | 32,812 | 1,162 | 34,950 | 1,222 | 36,569 | 1,256 | 37,830 | 1,345 | 39,501 | 1,380 | 40,503 .Unrestricted Trust | 167 | 4,349 | 176 | 5,405 | 179 | 5,902 | 186 | 6,230 | 186 | 6,526 | 187 | 6,831 | 187 | 7,115 Bureau Activities & Overhead Recovery | | (3,991) | | (4,807) | | (5,311) | | (5,360) | | (5,480) | | (5,600) | | (5,715) .Restricted Trust | 3 | 84 | 1 | 65 | - | 24 | - | 25 | - | 35 | - | 35 | - | 35 .Federal Grants & Contracts | [[underlined]] - | 50 | - | - | - | - | - | - | - | - | - | - | - | - [[/underlined]] Gross Support | 1,313 | 36,001 | 1,326 | 38,282 | 1,341 | 40,876 | 1,408 | 42,824 | 1,442 | 44,391 | 1,532 | 46,367 | 1,567 | 37,653 (Less Portion of Expenses Related to Auxiliary and Bureau Activities and Overhead Recovery) | [[underlined]] - | (3,991) | - | (4,807) | - | (5,311) | - | (5,360) | - | (5,480) | - | (5,600) | - | (5,715) [[/underlined]] Net Support | 1,313 | 32,010 | 1,326 | 33,475 | 1,341 | 35,565 | 1,408 | 37,464 | 1,442 | 38,911 | 1,532 | 40,767 | 1,567 | 41,937 [[line]] [[/table]] 105

-64- [[table, 7 columns]] [[underlined]] FACILITIES PLANNING, RESTORATION, RENOVATION AND CONSTRUCTION [[/underlined]] ($000s) TABLE 9 Fiscal years: [underlined]] | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 [[/underlined]] [[underlined]] Construction:[[/underlined]] [[underlined]] Museum Support Center[[/underlined]][[superscript]]1[[/superscript]] | 575 | 20,600 | [[blank]] | [[blank]] | [[blank]] |[[blank]] [[underlined]] Construction & Improvements: National Zoological Park & Conservation Center | 3,900 | 6,550 | 12,550 | 10,850 | 8,050 | 2,050 [[/underlined]] Totals | 4,475 | 27,150 | 12,550 | 10,850 | 8,050 | 2,050 [[underlined]] Restoration & Renovation: General Repairs and Improvements [[/underlined]] | [[blank]] | 1,500 | 1,500 | 1,500 | 1,500 | 1,500 [[underlined]] Fire Detection and Suppression [[/underlined]][[superscript]]2[[/superscript]] | 500 | 750 | 670 | 465 | 400 | 335 [[underlined]] Access for Disabled, Safety and Security and Correction of Hazardous Conditions [[/underlined]] | 325 | 500 | 195 | 155 | 105 | 50 [[underlined]] Facade and Roof Repairs [[/underlined]] | 590 | 950 | 600 | 530 | 435 | 405 [[underlined]] Other Projects [[superscript]]3[[/superscript]] | 535 | 7,900 | 2,500 | 2,500 | 2,500 | 2,500 [[/underlined]] Totals | 1,415 | 11,600 | 5,465 | 5,150 | 4,940 | 4,790 [[underlined]] Planning and Development [[/underlined]][[superscript]]4[[/superscript]]* [[underlined]] Trade Commission Building Restoration[[/underlined]] | [[blank]] | [[blank]] | [[blank]] | [[blank]] | 1,000 | 15,000 South Quadrangle Design and Construction [[/underlined]][[superscript]]5[[/superscript]] | 30* | 350* | 750* | 900 | 10,000* | 15,000 [[underlined]] Museum of African Art Planning [[/underlined]][[superscript]]6[[/superscript]] | [[blank]] | [[blank]] | 75 | [[blank]] | [[blank]] | [[blank]] | [[blank]] [[underlined]]Visitor Parking Design & Construction [[/underlined]] | 70* | 200* | 1,250* | 15,000* | [[blank]] | [[blank]] [[underlined]] Cooper-Hewitt (Miller House Restoration) [[/underlined]] | [[blank]] | 60* | 1,000* | [[blank]] | [[blank]] | [[blank]] [[underlined]] Radiation Biology Planning & Design | [[blank]] | [[blank]] | 50 | 75 | 300 | 300 [[/underlined]] Totals | [[blank]] | [[blank]] | 125 | 975 | 1,300 | 30,300 [[blank]] | 100* | 610* | 3,000* | 15,000* | 10,000* | [[blank]] Grand Totals - Federal Only | 5,890 | 38,750 | 18,140 | 16,975 | 14,290 | 37,140 [[superscript]] 1/ [[/superscript]] An amount of $325,000 is included in the FY 1978 appropriation to initiate design. Construction funding might be distributed over FY 1980-82 period as follows: $6 million in FY 1980, $10 million in FY 1981, and $4.6 million in FY 1982. [[superscript]] 2/ [[/superscript]] Early estimates for upgrading of fire detection and suppression systems and equipment in all institution facilities exceed $10,000,000. Until studies and master planning efforts underway are completed, amounts requested for fiscal years 1981 thru 1984 reflect repairs and improvements which are planned and estimated at this time. [[superscript]] 3/ [[/superscript]] FY 1980 requests will include $6.2 million for the Library and Study Center addition at the Museum of History and Technology, and $300,000 for upgrading present facilities of the Museum of African Art. Beyond FY 1980, it is anticipated that about $2.5 million annually will be necessary to sustain planned and phased improvement projects at Smithsonian research facilities, and to meet other known major repair and improvement requirements. [[superscript]] 4/ [[/superscript]] These projects represent areas of Institution concern which will receive priority attention over the next 5 year. No formal decisions have been reached about source of funding, timing or scope of project. Planning, design and construction estimates are only preliminary and approximate ideas about the general level of activity and will be updated as better information becomes available. *Indicates present or possible future funding other than appropriated funds. [[superscript]] 5/ [[/superscript]] Earlier studies indicate the South Quadrangle area can provide space in addition to the needs of the Freer Gallery. The Institution will seek private support of about $10,000,000 for the Freer extension, and appropriated funds to utilize the full potential benefits of construction at this Mall site. Trust fund projections include Garden for the Handicapped and East Garden construction costs for FY 1980 and 1981. [[superscript]] 6/ [[/superscript]] Transfer of the Museum of African Art to the Institution will require a detailed analysis of the Museum's present facilities, and plans for future use and disposition including possible relocation to an appropriate new site. At this time, projections beyond preliminary study efforts are reserved until more information is available. 128

-65- APPENDIX SMITHSONIAN INSTITUTION FIVE-YEAR PERSPECTIVE NOTES ON FINANCIAL PROJECTIONS The tables were designed to show trends in the Institution's future year resource patterns, and to reflect the changes and growth explained in the narrative portions of this report. The tables were developed in conjunction with the FY 1979 and FY 1980 budget processes. The FY 1978 figures are end-of-year estimates for expenditures and income prior to closing the books of the Institution. FY 1979 figures are based on Congressional approval of the federal request now pending House and Senate joint conference action, Board of Regents authorization to expend the FY 1979 appropriation, and Board of Regents approval of the nonappropriated trust fund portion of the FY 1979 budget. FY 1980 estimates reflect the consolidated budget assembled for approval by the Board of Regents at its September 25, 1978 meeting. The estimates have been submitted to the Office of Management and Budget. The FY 1980 budget resulted from the Institution's reviews which took place during the spring and summer months of 1978. Projections for years FY 1981-FY 1984 were derived from basic material prepared by the organizations and bureaus of the Institution and then reviewed by the appropriate member of the Secretary's Management Committee. These projections were sent to the Office of Management and Budget.

-66- [[underlined]] Tables 1 and 2. [[/underlined]] Table 1 contains general levels of dollar resources (or revenues) from various sources which the Institution expects will be necessary for the conduct of its operations. This table summarizes expenses associated with the operations of the auxiliary activities, including the Magazine and Exposition Book Program. Table 2 projects other expenses by functional area of operation (Science, History and Art, etc.) along with the application of funds to such items as plant improvements from nonappropriated unrestricted funds, special activities such as the Scholarly Studies, Acquisitions, and Educational Outreach Programs, and endowment. [[underlined]] Tables 3 through 8. [[/underlined]] These contain detailed expense projections for the Institution's museums, galleries, and laboratories. Throughout these tables, under unrestricted trust funds, are amounts in parentheses which represent expenses related to the Institution's revenue generating activities (primarily the auxiliary activities). These individual amounts are summarized organizationally in Tables 3 through 8, and in total in Tables 1 and 2. They appear in the tables to present net unrestricted funds projected to be utilized by each bureau of the Institution. More detailed information for the various organizations is available through the Office of the Treasurer, Smithsonian Institution. For ease of presentation, expenses associated with the various administrative, financial, and support organizations of the Institution are grouped into three categories in Table 8: (1) Central Management Services, (2) Specialized Administrative and Technical Offices, and (3) Maintenance and Protection.

-67- [[underlined]] Table 9. [[/underlined]] All major construction projects are included that are underway or being planned. For some future projects, detailed planning and estimating remains to be done (e.g., South Quadrangle design and construction) and the amounts as well as the possible sources of funding have not been fully determined.

-68- [[underlined]] Use of Nonappropriated Funds [[/underlined]] In January 1977 the Board of Regents voted to pursue the objective of increasing the Institution's unrestricted endowment funds. At that time, these funds totaled $8,400,000 and yielded approximately $375,000 of annual income. A general goal of $50,000,000 was discussed which would produce about $2,200,000 annually at current interest rates. In reviewing the Smithsonian Institution's FY 1979 request for appropriations, the House and Senate Appropriations Committees raised questions about the need for an unrestricted endowment of the size approved by the Board of Regents. The Committees have asked the Regents to consider and report on the possibility of reducing the proposed level of the endowment and using "a larger portion of trust funds to pay for current programs." The House report on appropriations for FY 1979 dated June 1, 1978 stated: "The Committee acknowledges that the Smithsonian's Board of Regents needs flexibility in conducting the Smithsonian's affairs. Yet, the Committee cannot understand why the funds proposed for the $50 million endowment should not be used in measure to ease the burden of paying for Smithsonian operations. The Committee is very much aware that the proposed $50 million endowment was created by decision of the Board of Regents, and the Committee does not want nor intend to impose its will on the Board. However, in observing its responsibility to the taxpayers to reduce appropriations where possible, the Committee believes it should suggest to the Regents that the funds proposed to be set aside in the endowment could well be used for paying for one or more of pending Smithsonian programs or projects, rather than placing such funds in reserves for use for projects now unknown which they may approve later. It requests that the Regents consider the possible use of such funds to pay for current programs to lessen the need for federal appropriations. It also requests the Regents to report their views to the Committee." Similarly, the Senate report dated July 31, 1978 states: "The Committee shares the concern of the House over the efforts of the Board of Regents to establish a $50 million

-69- endowment with profits from private Smithsonian activities. A fund of this magnitude would be well beyond the amount necessary to provide flexibility in conducting Smithsonian affairs. The Committee requests that the Board of Regents consider reducing the level of this endowment and using a larger portion of trust funds to pay for current programs." Thus, the Committees have asked the Board of Regents to give further consideration to the ultimate size of the Institution's unrestricted endowment fund, the uses to which resulting income will be put, and the desirability of budgeting some additional self-generated funds annually in such a way as to reduce the need for federal appropriations. These questions must be addressed now. The Committees will expect the Regents responses in connection with the Institution's FY 1980 request for appropriations. Accordingly, it was proposed that the following statement and plan of action be approved by the Board of Regents for submission to the Appropriations Committees.

-70- SMITHSONIAN INSTITUTION [[underlined]] Use of Nonappropriated Funds [[/underlined]] At its meeting on September 25, 1978, the Board of Regents considered the questions raised by the Committees on Appropriations of the House of Representatives and Senate on the matter of the development of an unrestricted trust fund endowment and voted to present the following views and approved course of action in response to the requests of those Committees. *********** Starting with the original bequest of James Smithson, unrestricted trust funds have provided an important, although limited, source of income to the Institution to allow it to pursue significant areas of research or to support aspects of public education. The existence of unrestricted trust funds played an important role in helping to define the special character of the Institution--a character that encourages broad-based public support in the form of gifts to the National Collections and contributions and bequests for specific as well as unrestricted purposes. Such support might not have been so readily forthcoming had the public not perceived this special character of the Institution. Development of an unrestricted endowment to provide income for current operations, to maintain flexibility in dealing with unanticipated opportunities, and to protect the Smithsonian against inflation or other adversities is not a new idea. In 1926, the Secretary, Charles G. Walcott, made an urgent appeal for a substantial increase in the Institution's endowment funds. Plans for a fund-raising drive were cut short when Secretary Walcott died shortly after the annual meeting of the Board of

-71- Regents in 1927. Fifty years later, it appears that this goal might be realizable as a result of the public's enthusiastic acceptance of the [[underlined]]Smithsonian[[/underlined]] Magazine and the successful results of other auxiliary activities. Consequently, at its January 25, 1977 meeting, the Board of Regents, recognizing the need to preserve the special nature and abilities of the Institution, voted to pursue the objective of increasing the unrestricted endowment fund to a level of at least $50,000,000. It is the intent of the Board of Regents that income derived from the endowment fund as well as from other nonappropriated funds should be budgeted for projects of public interest and benefit. Income for activities financed by nonappropriated unrestricted funds comes from three principal sources: (1) endowment income and the return on short-term investments, (2) occasional gifts for unrestricted purposes, and (3) revenues from the magazine, museum shops, concessions, record and book programs, product development, and other auxiliary activities, all of which are strongly oriented to public service. Revenue income is used immediately for two purposes: (1) to provide for the direct expenses of the income generating activities and (2) to cover the related central administrative support services used by the income-generating activities such as those provided by accounting, legal, procurement, and other service and support units that serve all elements of the Smithsonian. The net income is then distributed as follows: As part of the consolidated Smithsonian budget, the Secretary recommends and the Board of Regents approves budgetary allotments to offices and programs. In accordance with the approved budget, the Secretary allots monies to museums and galleries and these funds are used for the budgeted activities of the receiving bureaus.

-72- Specific amounts of the net income from the auxiliary activities in the past were budgeted for improvements or additions to the physical plant; e.g., the public restaurant, shop, and Naturalist Center facility in the West Courtyard of the Natural History Building, and a research laboratory addition at the Chesapeake Bay Center for Environmental Studies. Finally, funds permitting, the Secretary recommends and the Board of Regents authorizes annual transfers to reserves or endowments for the purpose of providing income for the Institution's long-range collections acquisition, research, and education programs. Use of nonappropriated funds, as approved by the Board in the Smithsonian Institution budget, is set forth for the Office of Management and Budget and the Congress in conjunction with the Institution's request for federally appropriated funds. Any subsequent changes recommended by the Secretary are approved by the Board of Regents and significant items are brought to the attention of OMB and the Congress. All funds available to the Institution are dedicated to public purposes for which the Smithsonian was established--"the increase and diffusion of knowledge among men." Nonappropriated funds available to the Institution, after meeting the expenses of the auxiliary activities, are making substantial contributions to meeting operating expenses, thus avoiding the need for equivalent amounts of appropriated funds. Examples of such support that might be cited include donor-specified endowments for research, such as the Walcott and Sprague Funds, and for the curatorial, research, and acquisition programs of the Freer Gallery of Art; application of unrestricted funds to meet a portion of the Institution's administrative expenses; and a vigorous program of fund raising for special projects, including exhibitions and publications.

-73- The Board of Regents on January 16, 1978, approved a $2,000,000 budget expenditure from nonappropriated funds for the acquisition of collections ($1,000,000), scholarly research ($500,000), and educational services ($500,000). This was based on substantially increased estimates of income from the magazine and other income generating activities. In making this allocation, the Regents agreed that the acquisitions programs would be funded at $1,000,000 a year for five years subject to the continued availability of funds. In fiscal year 1978, the Regents set aside a further $2,000,000 from net income to insure that funds would be available to meet this commitment as well as a pledge for a specific acquisition. In budgeting $2,000,000 from the Institution's self-generated income, the Regents are budgeting what could be the income on some $44,000,000 of endowment. In these terms, a $50,000,000 target does not seem unreasonable. It is of course important that provision be made for continuing such support in future budgets. This can be done most effectively by annually transferring to the unrestricted endowment fund a portion of the net income derived from the Institution's auxiliary activities. The Board of Regents' policy is to use only the income from the endowment so as to build up the endowment to the approved level. In unusual circumstances, however, the Board of Regents could approve use of a portion of the endowment itself; e.g., to take advantage of the opportunity to acquire a particularly significant item to augment a national collection. These two actions--annual budget support and building up the endowment--reflect not only the Board's strong commitment to continuation of the acquisitions, research, and outreach programs but to ensuring the continued ability to support them with nonappropriated monies.

-74- The House and Senate Committees have asked the Board of Regents to what extent income derived from auxiliary activities and the unrestricted trust funds can be used for current programs. The nonappropriated funds of the Institution are already making significant contributions to the Smithsonian's operating expenses. An overall view of the Institution's fiscal year 1979 budget shows that over $12,000,000 of nonappropriated funds will be used for operating expenses. Previous expenditures in this category exceeded $11,000,000 in fiscal year 1978 and $8,000,000 in fiscal year 1977. The Board of Regents believes, however, that the present operating results of the unrestricted trust fund activities make it possible to further increase those contributions. Consequently, the Secretary has recommended and the Board of Regents has agreed that the Institution should now make a positive response to the Appropriations Committees' request to "consider the possible use of [trust] funds to pay for current programs to lessen the need for federal appropriations." In making and approving this recommendation, the Secretary and the Board of Regents are appreciative of the sensitivity shown by the House Committee in stating that it "does not want nor intend to impose its will on the Board" and believe that such a positive response by the Institution will foster the continuing spirit of cooperation between the Institution and the Congress that is desired by all. The Secretary has recommended and the Board of Regents has approved the use of self-generated funds up to the amount of $1,000,000 annually to finance certain activities that were previously covered by appropriated federal funds. Of this amount, some $400,000 (representing the cost of space occupied by auxiliary activities) will be

-75- used in FY 1979 and subsequent years to pay for leased space. Other programs or projects to be financed in FY 1979 and in FY 1980 should be determined in consultation with the Appropriations Committees to insure that the intentions of the Committees and the integrity of the Smithsonian's programs will be well served. The Board of Regents reaffirms its commitment to development of income-producing resources and increasing the Institution's unrestricted endowment fund by budgeting a substantial portion of each year's income for these purposes. Such action will help to assure the Institution's continued ability to finance collections acquisition, research, educational outreach and related administrative expenses, as outlined above, even if income from current operations in future years should be less favorable. Consequently, the Regents approved the transfer of $3,000,000 of available funds in fiscal year 1978 to the unrestricted endowment fund as compared to $5,500,000 in fiscal year 1977. As of September 30, 1978, this fund amounted to about $17,000,000, producing annual income of some $750,000. In the Institution's fiscal year 1979 budget, the Board approved a transfer of a further $2,000,000 to the endowment. Future transfers of approximately $2,000,000 a year are projected in the fiscal year 1980 and subsequent year budgets. The endowment's principal will not be invaded except to meet some extraordinary requirement that could not be foreseen and could not be met in any other way. In such a situation, the board of regents would approve a budgetary transfer and report such action to the appropriate Congressional committees.

-76- As annual income from the unrestricted endowment fund rises, requests for federal appropriations for specific categories of expense can be expected to decline. At some point, the Board of Regents expects that some programs will be funded at the full level from income derived from the endowment. The Board will keep the Congress informed of progress toward this objective. *********** VOTED that the foregoing statement of use of nonappropriated funds shall be transmitted to the Office of Management and Budget, and the Committees on Appropriations of the House of Representatives and the Senate.

-77- [[underlined]] Lindbergh Chair of Aerospace History [[/underlined]] Mr. Ripley reported that the National Air and Space Museum receives trust fund revenues from a number of minor activities (sale of commemorative covers, swatches of airplane fabric, posters, and scarves) as well as a portion of the net revenues from the NASM museum shop and cafeteria. In 1977 an accumulation of $225,000 of these net gains was set aside in Unrestricted Special Purpose funds to establish a "Lindbergh Chair of Aerospace History," permitting the museum to appoint leading scholars from time to time to conduct research at NASM. The first appointment, in July 1977, was Charles Harvard Gibbs-Smith, one of the world's foremost historians of flight and keeper emeritus of the Victoria and Albert Museum. The funds set aside to date currently accrue interest earned through the Institution's short term investments. While this is a satisfactory method of funding this activity, it would be preferable to insure the continuity of the program and to endow permanently the Lindbergh Chair. This will require principal of at least $900,000 which the museum should be able to generate from auxiliary activities and gifts over the next five years. Mr. Collins responded to Senator Goldwater's inquiry that revenues generated by the Museum's auxiliary activities would be included in this fund. It is not proposed that any net proceeds from the Theatre and Spacearium be devoted to this project. The approval of the Regents was requested to transfer monies already set aside for this project into a designated endowment fund, and to authorize further such transfers, as funds become available, to a level of $900,000. Progress reports on this project will be provided to the Board.

-78- The Board approved the following motion: VOTED that the Secretary is authorized to establish, as a part of the Institution's endowment funds, a designated fund to be known as the Lindbergh Chair of Aerospace History Endowment; that the transfer into this endowment fund of monies currently set aside for this purpose is authorized; and that such further transfers as may be possible from National Air and Space Museum discretionary trust funds into this endowment fund may be made, until the principal attains a level of $900,000.

-79- [[underlined]] Stuart Portraits of George and Martha Washington [[/underlined]] Mr. Ripley reported that the Executive Committee was requested to review what is considered to be an extraordinary opportunity to acquire the greatest American historical paintings which have ever been offered to the National Portrait Gallery. These are the Athenaeum Portraits, the original life portraits of President and Mrs. Washington by Gilbert Stuart. That of Washington is the only Stuart which can with absolute certainty be said to have been done in the living presence of the President (on April 12, 1796), and it was upon this likeness that the myriad of other Stuart "Athenaeum-type" portraits of Washington were based. Stuart never parted with these two canvases, and three years after his death they were sold by his daughter to the Boston Athenaeum to which they have belonged since 1831. The paintings have been on loan to the Boston Museum of Fine Arts in which they have been on exhibition since that time. The Athenaeum now finds itself in a dire financial condition, and its Board, recognizing that the National Portrait Gallery is the pre-eminent institution for these portraits, has voted to sell them to the Smithsonian. A number of conditions related to the sale of the paintings are currently under consideration by both the Athenaeum and the Smithsonian, such as: 1. The Athenaeum's asking price is $5.5 million, and it is understood that whatever amount is agreed upon may be payable over a period of years. 2. The Athenaeum, in order to settle any possible question of its right to sell the paintings, will seek

-80- the approval of the probate court (of which the Attorney General of the State is a necessary party in proceedings involving a public charity) before consummating any transaction. 3. As part of such an approval, it is expected that the Museum of Fine Arts would be given rights to exhibit the portraits for one third of the time. The Museum favors a two-year/one-year arrangement. 4. The Museum of Fine Arts would lend works of truly major importance to the National Portrait Gallery during the periods when the Athenaeum portraits are exhibited in Boston. The Smithsonian Executive Committee of the Board of Regents, in recognition of the unique nature of this opportunity, approved the following motion at its meeting on May 25, 1978: VOTED that the Executive Committee of the Board of Regents authorizes the Secretary to pledge $1 million of currently available unrestricted trust funds toward the purchase of the portraits of George and Martha Washington by Gilbert Stuart. Since the May 25 meeting of the Executive Committee, efforts have been made to raise funds from private sources. The President of the Boston Museum of Fine Arts has offered to accompany the Secretary on a fund raising campaign this fall. There is no current time limitation set on the Smithsonian except our own, which is to expend our best efforts to raise the funds as soon as possible and to keep the appropriate persons informed as to our progress.

-81- Mr. Brown said that there is no question that these portraits are of the highest importance from the point of view of American history and American portraiture but agreed with Senator Goldwater that $5.5 million seems excessive in view of other prices of the art market today. He would be in favor, however, of an outright purchase, that is without any conditions attached requiring the Smithsonian to lend them back. This is not to say that we would not be generous in lending them under certain conditions. Mr. Blitzer confirmed that the Athenaeum must get the permission of the probate court of Massachusetts to sell these paintings at all. It is the Athenaeum's strong conviction that permission to sell will depend on the specific condition that these portraits will spend some time in Massachusetts. The proportion of time may be negotiable, but that proportion is now one third, in perpetuity. On the point of the condition of the portraits, it was mentioned that the Directors of the National Portrait Gallery and the Boston Museum of Fine Arts were not concerned about the portraits being in any danger if they were to be involved in a lending program. The question of the real dollar value of the portraits revealed that although the Athenaeum got an appraisal from a dealer in New York of $6.5 million, it is very difficult to put a price on something that is unique. It was suggested that other appraisals could be gotten. A number of concerns expressed by the Regents included: the perception of the public in using taxpayers' funds for the purchase should such funds be sought; the importance of any conditions being for a time certain; that the conditions of the sale impose no unworkable requirements on the Smithsonian; and, that the ability of the Institution to raise the funds from private sources should be tested.

-82- It was concluded that the Secretary was authorized to negotiate with the Athenaeum for the best possible price and conditions acceptable to the Institution, i.e., to try to get full ownership without specific conditions in perpetuity; attempt to raise funds from private donors; and, in this negotiation, the Regents have expressed their approval in principle of this purchase by pledging $1 million dollars toward the purchase of these portraits, contingent, however, on a further review by the Board of Regents of any specific proposal which could result in a firm contract.

-83- [[underlined]] Opening Meetings of the Board of Regents [[/underlined]] Mr. Ripley reported that in its report on the Smithsonian's fiscal 1978 budget, the House Appropriations Committee recommended that the Regents' meetings be public. This year, the Senate Appropriations Subcommittee has also urged that public meetings be held. It is clear that public meetings would please both the press and members of Congress who have urged that this step be taken. Although there are no legal requirements upon the Board to hold public meetings, there remains the question of public perception of its openness. After each of the past several Regents' meetings the Smithsonian has conducted a full briefing for reporters. This has not satisfied the press, however, and reporters at each briefing have said that a detailed briefing still is no substitute for actually seeing the Institution's principal decision-making body at work. For the past year the Institution has said that the Board's policy of executive meetings was under review. Reporters have asked repeatedly why it has taken so long for a decision to be reached. After the May 5, 1978 meeting, for the first time the agenda information items furnished each Regent were provided--with some deletions-- to all members of the five congressional subcommittees having oversight or appropriations jurisdiction over the Institution. In July, the minutes of that meeting also were submitted to each subcommittee in accordance with the request of Senator Ted Stevens of the Senate Appropriations Subcommittee, and members were informed that the minutes were available for their scrutiny. These steps were received favorably.

-84- Despite their advantages, public meetings of the Regents pose an unusual difficulty. Because of the heavy responsibilities they carry elsewhere, and because the majority of Regents live outside Washington, members of the Board seldom have opportunities in advance of meetings for conversations with the Institution's staff and with each other. Instead, the Regents must depend on the written materials they receive before each meeting and on the meeting itself for answers to questions and for a frank exchange of views and information required for sound decision-making. The Institution's record of accomplishments attests to the success of this system. To inhibit the information and discussion process would serve neither the interests of the Institution nor the public. This, then, is the dilemma: public meetings would strengthen the Institution's reputation for openness and candor, but at the risk of weakening the decision-making process within those meetings. The Regents' discussion disclosed differing points of view concerning the public perception of continuing to have executive sessions of the Board of Regents. There was considerable feeling that we explore further possibilities of meeting the situation. Several suggestions were made in an effort to come to a conclusion on this matter but the consensus of the meeting was to continue the present policy for now and to give very detailed consideration to this subject at the next meeting of the Board in January 1979.

-85- [[underlined]]Smithsonian Exposition Books [[\underlined]] The discussion at the Regents' meeting of May 5, 1978, on publication of two popular books, concluded with a motion which required the Regents' Executive Committee to confirm that satisfactory test results were received to warrant proceeding with the publications, [[underlined]]The Smithsonian Book of Inventions[[\underlined]] and [[underlined]]The Magnificent Foragers[[\underlined]]. Based on information submitted to the Executive Committee which set forth the returns from test mailings, including the estimated financial statement, the Executive Committee approved publication of the books. Copies of these financial forecasts are attached. Plans for future publications require selecting the subject matter of reader interest through market surveys. Therefore, from a previous market survey conducted in April, two titles have emerged that seem likely candidates for publication in 1979. [[underlined]]The American Land.[[\underlined]] This would be in the same format as [[underlined]]The Smithsonian Experience.[[\underlined]] It will be a broad-gauged look at the American land from the perspective of the historian, the scientist, and the art historian. Major sections would concentrate on the geological formation of the land, North American flora and fauna, early settlement and development, continental resources and environmental conservation. [[underlined]]The National Zoo[[\underlined]]. This would be a smaller book, in the format of [[underlined]]The Magnificent Foragers]]. Written mostly by Thomas Crosby of The Washington [[underlined]]Star[[\underlined]], it would have a final section on the best of U.S. zoos

-86- by Dr. Reed, Director of NZP, and Dr. Eisenberg, Resident Scientist, Office of Zoological Research, NZP, and an introduction by someone like Konrad Lorenz. On both of these books, a certain amount of editorial work has been initiated. This is necessary in order to have sufficient material in hand by January of 1979 to be able to test the books in the mails. The Secretary reported that we are continuing to arrange to have a tie-in with commercial publishers so that we produce material available to the publishing community. For the future, several other topics have emerged from market surveys as feasible Smithsonian books. In particular, a small format book on anthropology at the Smithsonian, and large format books on the American peoples, time, and flight. In order to facilitate the planning of books to be produced in 1979, the follow motion was approved: VOTED that the Board of Regents authorizes the Secretary to proceed with preparation of appropriate material in order to test the books on The American Land and The National Zoo. Authority for final approval of the publication of these titles is contingent upon the satisfactory market analysis presentation to be received and approved by the Executive Committee of the Board of Regents.

-87- Early test results indicate that a response from Associates ranged from 5.25% to 6.1%. An average of 5.65% of the first mailing is being used to forecast sales as follows: [[underlined]] Mail Order Sales [[/underlined]] [[underlined]] Copies sold [[/underlined]]: First Mailing at 5.65% = 74,470* Second Mailing at 2.82% = [[underlined]]37,235*[[/underlined]] Subtotal copies 111,705 at $16.16 $1,805,152 By W.W. Norton [[underlined]]15,000[[/underlined]] at $7.74 116,100 Total committed of 150,000:126,705 Gross Revenue Mail Sales: $1,921,252 [[underlined]] Expenses [[/underlined]] (direct) Editorial fees: $ 62,500 Design: 25,000 Production (150,000 copies): 552,195 Promotion - test mailing: 35,000 first mailing: 142,500 second mailing: 133,000 Fulfillment: [[underlined]]225,150[[/underlined]] Direct Expenses: [[underlined]]1,175,345[[/underlined]] Gross Income Mail Sales: $ 745,907 [[underlined]] Trade Sales [[/underlined]] Of the total number of copies produced the remainder will be saleable to outside lists which are presently being tested. These sales are forecast as follows: Copies: 20,000 at $18.14 $362,800 [[underlined]] Expenses [[/underlined]]: Promotion costs: $160,000 Fulfillment: [[underlined]]41,800[[/underlined]] [[underlined]]201,800[[/underlined]] Total Income Trade Sales: [[underlined]]161,000[[/underlined]] Total Gross Income (Before admin. expenses) [[double underlined]]$906,907[[/double underlined]] [[line]] *After returns and bad debts

-88- [[underlined]] Test Mailing: Natural History Book [[/underlined]] The lead package in our test mailing indicates at least a 3.3 response in late July's full mailing. We are encouraged to make the following forecast: July: full mailing to 1.5 million Associates, 3.3% response yields gross sales of 49,500 copies at $13.01* each: $643,995 Oct.: Mailing of 400,000 to outside lists, 1.7% response yields gross sales of 6,800 copies at $14.99* each: 101,932 Jan.: Mailing to 600,000 outside names, 1.7% response yields gross sales of 10,200 copies at $14.99* each: [[underlined]] 152,898 [[/underlined]] Total copies: 66,500 Total Gross Sales: $898,825 Adjusted for 10% returns and bad debts: [[underlined]] - 89,883 [[/underlined]] Total Gross Income: $808,942 Costs: Editorial and production: $375,700 Promotion 289,000 Fulfillment [[underlined]] 57,000 [[/underlined]] [[underlined]] $721,700 [[/underlined]] NET GAIN: [[double underlined]] $87,242 [[/double underlined]] Additional revenue is expected from the trade sale of the book, plus funds from future mail order sales. * $15.95 less 25% discount plus postage and handling. ** $13.95 retail plus postage and handling.

-89- [[underline]] Smithsonian Support of other Scientific Organizations [[/underline]] For a number of years the Smithsonian has been associated with various environmental groups throughout the world so that Smithsonian scientists may exchange ideas with their colleagues and pursue their areas of expertise. These collaborations have furthered research and resulted in works being published in a variety of fields. For example, as a sponsor of the Charles Darwin Foundation, the Institution supports a research table for visiting Smithsonian scientists and since 1966, 32 Smithsonian scientists have done research on the Galapagos Islands and 67 works have been published. Concern for the survival of Aldabra Atoll and a desire to study its unique ecosystem led to Smithsonian cooperation with the Royal Society's Aldabra Research Committee and to scientific visits beginning in 1967. This liaison resulted in publications in the [[underline]] Proceedings [[/underline]] of the Royal Society, collections exchanges, a definitive work on Aldabra in the [[underline]] Atoll Research Bulletin [[/underline]] and, most significantly, the [[underline]] Flora of Aldabra [[/underline]] by a Smithsonian botanist which will be published later this year. Other groups in which Smithsonian enjoys membership, some of which receive subventions from the Institution, are listed in an appendix below (T=trust fund subvention; all others are funded through appropriated funds).

-90- There now is proposed to be added to this list the International Council for Bird Preservation (ICBP) whose objective for half a century has been to protect birds around the world. As President of ICBP since June 1958, the Secretary's own interest in its endeavor evoked awareness of its unique network of worldwide correspondents who provide advice and information for governments, other organizations, and individuals on bird conservation matters. The need for administrative support for the ICBP is extremely important at this time to assist the specific projects and programs it undertakes. It was proposed therefore that the Smithsonian give an annual subvention of $5,000 from unrestricted trust funds to ICBP which would be added to the other contributions it receives. VOTED that the Board of Regents approves an annual trust fund subvention of $5000 to the International Council for Bird Preservation, subject to review at the end of five years.

-92- [[table, 2 columns]] [[underlined]] Museum Programs (Cont.) | Subvention [[/underlined]] American Association of Botanical Gardens and Arboreta | $25 Victorian Society of America | $20 American Horticultural Society | $15 American Orchid Society | $15 American Rhododendron Society | $12 Federal Design Council | - International Council on Archives | $40 Canadian Historical Association | $12 International Centre for Conservation, Rome | $100 [[/table]] ------- [[superscript]] 1 [[/superscript]] In addition, memberships in approximately 33 organizations are paid for by individual staff members. All subventions paid for with Federal funds. [[underlined]] History and Art [[/underlined]] [[table, 3 columns]] [[underlined]] Bureau | Organization | Subvention [[/underlined]] American Studies & Folklife | None | [[blank]] Archives of American Art | Oral History Association | 15.00 T Cooper Hewitt Museum | American Association of Museums | 500.00 T | Print Council of America | --- | International Committee of Curators of Graphic Arts | --- | National Council of Interior Design Qualifications | --- | National Endowment for the Arts, Museum Division | --- | Fashion Institute of Technology | --- | Bank Street College of Education | --- | Museum Store Association | --- Freer Gallery | American Association of Museums | 1,545.00 | International Council of Museums | 800.00 | College Art Association | 250.00 Hirshhorn Museum | American Association of Museums | 500.00 | International Council of Museums | 400.00 | Association of Art Museum Directors | 300.00 | College Art Association | 250.00 | The Art Library Society of North America | 35.00 Henry Papers | None | [[/table]]

-93- [[table, 3 columns]] [[underlined]] Bureau | Organization | Subvention [[/underlined]] MHT | American Association of Museums | 2,500.00 | International Council of Museums | 800.00 | Council of American Maritime Museums | 20.00 | International Congress of Maritime Museums | 50.00 NCFA | American Association of Museums | 1,000.00 | International Council of Museums | 800.00 | Association of Art Museum Directors | 300.00 | Technical Association of Pulk and Paper Industry | 40.00 | American Federation of the Arts | 75.00 | American Historical Print Collectors Society | 20.00 | College Art Association | 250.00 NPO | American Association of Museums | 1,623.00 | International Council of Museums | 800.00 | College Art Association | 250.00 | Associated Council of the Arts (Library membership) | 35.00 | The American Federation of the Arts | 75.00 | Association of Art Museum Directors | 300.00 | Cultural Alliance of Greater Washington | 25.00 [[/table]]

-94- [[underlined]] Resolution of Appreciation to Board of Regents [[/underlined]] At its meeting on May 24, 1978, the Board of Trustees of the Hirshhorn Museum and Sculpture Garden unanimously adopted the following resolution of appreciation to the Regents of the Smithsonian Institution: WHEREAS the Board of Trustees of the Joseph H. Hirshhorn Museum and Sculpture Garden is deeply appreciative of the action taken by the Board of Regents of the Smithsonian Institution on January 16, 1978 in establishing a Collections Acquisition Program to enable the Museum to acquire important works of art that will add significantly to the quality and comprehensiveness of its collection and which would otherwise be beyond its available means to acquire; be it RESOLVED that the Board hereby expresses its gratitude to the Board of Regents for its establishment of the Museum's effort to deepen and strengthen its collection. Mr. Ripley was pleased to announce that efforts by the Hirshhorn Trustees to match the Regents' Collection Acquisition program had resulted in pledges totalling $450,000 as of September 19, 1978. He considered this a remarkable demonstration of the conviction of those Trustees that the work of the Hirshhorn Museum is good and appropriate and that their collection should be enhanced.

-95- [[underlined]] Gift of Securities to the Hirshhorn Museum [[/underlined]] The Secretary stated that a member of the Hirshhorn Museum Board of Trustees, Mr. Sydney Lewis, and his wife, have expressed their desire to make a contribution of stock (Best Products) to the Institution; the proceeds of the stock, expected to exceed $100,000, are to be used to match a grant to the Hirshhorn from the Collection Acquisition Program approved by the Regents from Unrestricted Trust Funds. Since the shares were acquired privately by Mr. Lewis and are unregistered, they are subject to the investment restrictions of the Securities Act of 1933, and may not be sold by the Institution except in compliance with Rule 144 of that Act. Unregistered stock has been received and sold by the Institution in the past; such sales, however, have on occasion been delayed since the aggregated sales by the donor and the Institution may not during any six-month period exceed a certain amount without a public registration. In the current instance, however, the attorney for Mr. Lewis has informed the Institution that at the end of September, a large number of similarly restricted shares held by other shareholders will be registered with the SEC and offered for sale by Goldman, Sachs & Company and Wheat, First Securities, Inc. To facilitate our sale of this stock, the attorney has provided necessary documentation to enable the Institution to join this registration and offering. In the interest of prompt sale, it is therefore proposed that the Regents authorize acceptance of the gift and, using the opportunity presented, further authorize the Secretary to take the necessary steps to register and sell this stock.

-96- The Regents approved the following motion: VOTED that the Board of Regents authorizes the Secretary to accept a gift of restricted securities from Mr. and Mrs. Sydney Lewis for the programs of the Hirshhorn Museum, and further authorizes the Secretary to take appropriate steps to sell said securities in full compliance with the Securities Act of 1933, in order to carry out the terms of the gift.

-97- [[underlined]] Opportunity to acquire private land surrounded by the National Zoo Conservation and Research Center in Front Royal, Virginia [[/underlined]] Within the National Zoo Conservation and Research Center at Front Royal is a 52-acre enclave that is privately owned and may well be developed in the near future unless the Institution purchases the property. The major portion, 28 acres, is owned by a developer who has subdivided the land into eight lots with the intention of selling the lots for homesites as soon as possible. A four-acre parcel is owned by a woman who resides in Pennsylvania. The remaining 20 acres are owned by an anthropologist who works at the Museum of Natural History. The developer has indicated that he will sell the 28 acres in one piece to the Institution for approximately $2,300 per acre--slightly over the going rate for land in that area although probably not above its fair market value when the protected character of the boundaries is considered. The owner of the four-acre parcel will sell for approximately $10-15,000. The Smithsonian anthropologist has indicated he will sell a remainder interest in his 20 acres, and will lease most of the land to the Institution for his lifetime, as long as he may retain, for his lifetime, quiet enjoyment of the house and a few acres surrounding the house. It is estimated that the entire 52 acres could be acquired for approximately $110,000, using Smithsonian trust funds. An appraisal seems unnecessary since the Institution has no choice but to negotiate

-98- with the present three owners, arriving at a price agreeable to all parties. Also, preliminary indications are that all of the owners' asking prices will be within an acceptable range of fair market value. Presentation of this proposed transaction to the Regents for approval also included the [[underlined]] provide [[/underlined]] that the Congress be appropriately informed of these purchase plans and given an opportunity to respond prior to any firm commitment being made for any expenditure of trust funds. Also proposed was that the Institution make a commitment to give this property to the federal government at such time as it might cease using the surrounding 3,000-plus acres at Front Royal. Such a commitment would forestall any criticism that the Smithsonian, through ownership of this enclave, would be placing itself in the position to bargain hard with the federal government in any future plan for federal purchase of this property. The anticipated expenditure of federal funds on this property appears to be minimal. The land is fenced on three sides by the perimeter fencing of the Conservation Center; thus only a minimum of fencing for the fourth side would be required plus installation of a gate. There are barns on the property which could be easily converted for use by the Conservation and Research Center. We have given particularly close scrutiny to the 20-acre parcel which is owned by a Smithsonian anthropologist, Mr. Dennis Stanford.

-99- Our General Counsel indicates that: 1. Smithsonian will not consummate the sale with Mr. Stanford unless the terms are clearly to the Institution's advantage, and preliminary indications are that they will be. 2. By selling a remainder interest, Mr. Stanford is offering Smithsonian a fair deal, even though he will enjoy a lifetime lease income, because the value of the land to his estate would undoubtedly be much greater if it were sold at the time of his death than if he sells it now. 3. It is clearly to Smithsonian's advantage to have a good neighbor such as Mr. Stanford occupy that land, because he can be counted on to be sympathetic to our interests in maintaining peace and quiet for the breeding animals. Concurrence in the above plan was requested so that Smithsonian may negotiate with the present owners subject to the express conditions: 1) that approval of the Regents is requires; 2) that the Congress must be informed and given an opportunity to respond; and 3) that the Institution be able to evaluate that response with the discretion to cancel the transaction if, in its opinion, the reaction by the Congress is unfavorable. Our understanding is that the property owners will commit themselves to firm selling prices subject to the latter three conditions so long as a definite time period is established beyond which they would be released from their obligations to sell. The following motion was approved: VOTED that the Board of Regents authorizes the Secretary to negotiate with the present owners of 52 acres of land at Front Royal, Virginia, as described above, and to buy the land at a cost not to exceed $110,000, provided that the Congress be appropriately informed of these purchase plans and given an opportunity to respond prior to any final commitment being made.

-100- [[underlined]] Information Items [[/underlined]] Mr. Ripley reported the following: [[underlined]] Seward Johnson--Smithsonian Institution: Petition for Instruction [[/underlined]] In late 1969, J. Seward Johnson made a gift to the Smithsonian Institution of approximately 2 1/2 million dollars in the following terms: "It is my intention...that the principal shall generally be kept intact and that the income be used in the first instance in assuring the successful completion and operation of the research submersible vehicle being given separately by Edwin A. Link and myself. In the unexpected event that the income and other funds are insufficient to properly equip and operate the submarine, limited emergency use of the principal for this purpose would be appropriate. Designation of the fund as the 'Seward Johnson Trust Fund for Oceanography' is intended to assure that the income should be available for broader use in underwater oceanography beyond the life of the specific submersible mentioned here. In the event that the development of the planned submersible becomes impossible or impractical, I intend that the income will continue to be used for underwater oceanography and, if funds are sufficient, for oceanographic purposes." In 1970, the Hunterdon Medical Center School of Health in New Jersey was dissolved, and approximately 3 1/2 million dollars of its remaining assets were donated to the Smithsonian Institution in the following terms: "RESOLVED that one-half of all of the remaining assets of the School be distributed to the Smithsonian Institute, Washington D. C., an establishment for the increase and diffusion of knowledge among men, for the support of its programs of oceanography, including the education, research and publication connected therewith with special emphasis on underwater oceanography."

-101- From 1969 to 1976, the Smithsonian Institution worked closely with Edwin Link, Seward Johnson, and the Harbor Branch Foundation at Fort Pierce, Florida to engage in oceanography and to build the Johnson-Sea-Link submersible as a tool to carry out oceanographic research. A 1973 accident involving the Johnson-Sea-Link led to the transfer of the submersible and tender vessel R/V Johnson to Harbor Branch Foundation. Although largely at the insistence of Johnson and Ed Link, the transfer was mutually convenient for both the Smithsonian Institution and Harbor Branch Foundation. Over the years it became increasingly difficult for the Institution to accommodate the desires and demands of Seward Johnson regarding research objectives and methods, and working relationships with Harbor Branch Foundation deteriorated. In 1977, Seward Johnson and Harbor Branch Foundation, Inc. (HBF) made a formal demand of the Smithsonian Institution to pay HBF $1,534,442 from the Johnson and Hunterdon Medical Center gifts for the ongoing development and operation of several submersibles and tender vessels being built, owned, and operated by HBF for its own purposes. J. S. Johnson/HBF threatened suit if Smithsonian Institution did not comply with the demand. Faced with the prospect of a protracted lawsuit in Florida or New Jersey, the Smithsonian Institution petitioned the United States District Court for the District of Columbia to interpret the provisions of the gifts about which Mr. Johnson and the Smithsonian Institution disagreed. HBF was admitted to the proceeding as Intervenor and Johnson came in individually as [[underline]]amicus [[/underline]] [[underline]] curiae [[/underline]]. Among the basic points of contention between the Smithsonian and J. Seward Johnson/HBF are: 1) Smithsonian asserts that the terms of the Johnson gift required the Institution in the first instance to use the income and, if necessary, the principal of the Johnson gift to construct [[underline]] the [[/underline]] specific Johnson-Sea-Link submersible donated by Link and Johnson, and to make it operational in the sense that it could be used successfully in underwater research. Smithsonian asserts that this is the extent of its mandatory obligation. Whether to use the submersible [[underline]] once [[/underline]] [[underline]] it [[/underline]] [[underline]] became [[/underline]] [[underline]] operational [[/underline]] is a matter solely of Smithsonian discretion.

-102- Johnson/HBF contends that the restrictions placed on the gift require the Smithsonian to use both principal and income to develop a [[underlined]] system [[/underlined]] of submersibles, in [[underlined]] cooperation [[/underlined]] [[underlined]] with [[/underlined]] [[underlined]] Harbor [[/underlined]] [[underlined]] Branch [[/underlined]] [[underlined]] Foundation [[/underlined]], [[underlined]] Inc. [[/underlined]], [[underlined]] at [[/underlined]] [[underlined]] Fort [[/underlined]] Pierce [[/underlined]], [[underlined]] Florida [[/underlined]] and support the operation of all those submersibles as well as tender vessels for them, [[underlined]] regardless [[/underlined]] [[underlined]] of [[/underlined]] [[underlined]] who [[/underlined]] [[underlined]] owns [[/underlined]] [[underlined]] or [[/underlined]] [[underlined]] controls [[/underlined]] [[underlined]] the [[/underlined]] [[underlined]] submersibles [[/underlined]] [[underlined]] and [[/underlined]] [[underlined]] support [[/underlined]] [[underlined]] vessels [[/underlined]]. (2) The parties dispute the nature and extent of the restrictions of the gift from the Hunterdon Medical Center School of Health to the Smithsonian. Smithsonian maintains the gift restriction is only that it be used in support of the Institution's program of oceanography, with special emphasis on underwater oceanography. Johnson/HBF contend that the income and principal from the gift must be used to develop a [[underlined]] system [[/underlined]] [[underlined]] of [[/underlined]] submersible vessels, [[underlined]] in [[/underlined]] [[underlined]] cooperation [[/underlined]] [[underlined]] with [[/underlined]] [[underlined]] Harbor [[/underlined]] [[underlined]] Branch [[/underlined]] [[underlined]] Foundation [[/underlined]], [[underlined]] Inc. [[/underlined]] [[underlined]] at [[/underlined]] [[underlined]] Fort [[/underlined]] [[underlined]] Pierce [[/underlined]], [[underlined]] Florida [[/underlined]], and to support the operation of all those submersibles and tender vessels for them. (3) Apart from the consequences of this suit for the particular funds involved, there is the more general question of the degree of discretion which the Institution can properly exercise in administering restricted gifts within its own mandate and the principles of trust law. Harbor Branch Foundation amended its original response to the Smithsonian's petition for construction of a trust, by generally asserting that the Institution was not serving as a capable trustee of the gifts involved, and requested the Court to remove the Smithsonian as trustee and appoint another qualifying organization (presumably Harbor Branch Foundation, controlled by J. Seward Johnson) to assume the trust responsibilities. Given the obvious interest on the part of Seward Johnson and the thoroughness with which he has had the matter pursued by legal counsel, the case might well be prolonged; and there could be a significant amount of attention given to it by the press, resulting in questions arising as to the Institution's ability to manage these funds. Trial is presently scheduled for October 16, 1978, before Judge Barrington Parker.

-103- [[underlined]] Smithsonian Administrative Matters [[/underlined]] The role of the Under Secretary has been reviewed and has resulted in a description of his responsibilities (attached). Consideration has also been given to transferring certain units within the Smithsonian organization in order to provide for a more equitable span of responsibility. This review has resulted in transferring the following organization units from the Director of Support Activities to the Assistant Secretary for Administration: - Office of Personnel Administration - Office of Equal Opportunity - Management Analysis Office Further studies are underway in which the Secretary and Under Secretary are intimately involved and will be reported as recommendations evolve.

-104- POSITION DESCRIPTION: UNDER SECRETARY [[underlined]] Introduction [[/underlined]] The Under Secretary of the Smithsonian Institution serves as the principal assistant to and associate of the Secretary in managing the affairs of the Institution in accordance with its basic charter as defined in 20 USC 41 [[underlined]] et [[/underlined]] [[underlined]] seq. [[/underlined]] the policies and limitations established by the Congress, and policy guidelines approved by the Board of Regents. [[underlined]] Responsibilities [[/underlined]] 1. In the absence of the Secretary, the Under Secretary serves as Acting Secretary with all the authorities and responsibilities of the Secretary. 2. As the Secretary's principal assistant and associate, the Under Secretary assists the Secretary in discharge of his responsibilities, and represents the Secretary in direction and management of the Institution, exercising within policy guidelines established by the Board of Regents and the Secretary, all of the Secretary's authorities except those assigned specifically to the Secretary by law. 3. The Under Secretary supervises and coordinates the programs and activities of the Institution and serves as principal advisor to the Secretary on pan-Institutional matters, in consultation with the assistant secretaries and other appropriate staff, including control of organization structure, assignment of functions and activities within the Institution, allocation of personnel and financial resources, personnel policies and programs, legislative proposals, and acquisitions management. In this connection, the Under Secretary performs the following duties: 3.1. Coordinates development of the Institution's five-year program perspective and its timely revision; reviews budgetary proposals for consistency with approved plans and policies; and prepares recommendations for the Secretary's consideration and, if appropriate, submission to the Board of Regents. 3.2. Evaluates effectiveness of the Institution's activities; keeps the Secretary, and through him, the Board of Regents informed of developments that may require changes in policy, budgets, or organization. 3.3. Reviews and coordinates all policy, program, and legislative developments for the Secretary' assures that proposals are properly prepared and analyzed so that the Secretary and the Board of Regents will have all the information they need to make major policy or program decisions.

-105- 3.4. Supervises the Institution's internal audit program; reviews significant internal audit findings with the Secretary; initiates actions to carry out audit recommendations that do not require approval by the Board of Regents; and assists the Secretary in briefing the Board of Regents or its designated committee on (a) internal audit findings requiring consideration by the Regents and (b) corrective action subsequently taken. 3.5. Assists the Secretary in maintaining liaison with the Board of Regents and its committees, providing executive direction to supporting activities, e.g.: a. Preparation of materials for use by the Board, its committees, or members; and b. Documentation of actions approved by the Board or policy guidance issued by the Board. 3.6. On behalf of and in consultation with the Secretary, maintains liaison with Congressional committees, members and their staffs to facilitate communication of Congressional views to the Secretary and the Board of Regents; works with other Smithsonian officials in performing, considering, and utilizing this liaison. 3.7. Assures availability of financial and program information for timely use by the Secretary and dissemination to the Board of Regents and Congressional committees. 3.8. Serves as the Secretary's principal advisor on executive personnel management; supervises, in consultation with the assistant secretaries, in connection with bureau activities, recruitment and selection of executive personnel for positions requiring approval of the Secretary and, when appropriate, concurrence by the Board of Regents; reviews and recommends for approval appointments to executive and scientific positions. 3.9. Performs such other duties as the Secretary may direct.

-106- [[underlined]] Update of Status Reports [[/underlined]] Mr. Ripley reported that on September 1 when the agenda papers were sent to the Regents, there were also enclosed status reports on ongoing projects in which the Regents have a continuing interest. These include: -- Sale of Seidell Building -- Mail Order Fulfillment Center, Newington, Virginia -- Allocation of Collection Acquisition, Research, and Outreach Program Trust Funds -- Collections Management Study -- Status of Legislation -- Trade (Tariff) Commission Building -- Mall Underground Parking -- Status of Personnel Recruitments -- Litigation Report -- Construction Projects -- Selected Studies Program of the National Associates -- Smithsonian Symposia and Seminars -- New Research Vessel for STRI The reports follow. There has been further action on two important legislative matters. First, the Museum Support Center legislation was approved by the House Public Works Committee with a primary amendment which is quoted as follows: "No appropriation shall be made to construct the facilities authorized by this act until the Committee on Public Works and Transportation of the House of Representatives, by resolution, approves the final plans and specifications of such facilities." In the report which accompanied the bill, No. 95-1559, the Committee stated that the provision would: "...give the needed authority to the committee to properly preserve the role of the committee in the construction phase of this project. The project should and must be recognizable upon completion according to its original and intended purposes. This amendment is designed to provide that needed control."

-107- The Committee's report does not define the phrase "final plans and specifications." The Smithsonian staff will work with the Committee over the coming months in an endeavor to reach an agreement about the definition of that phrase. We are led to believe that a certain amount of flexibility is available and that an agreement can be reached. Information has been received from the House Committee on Appropriations, which is aware of this language, that it expects to hear our justification for construction of the project in conjunction with our regular appearance before the Interior Subcommittee in the spring. The Senate also amended the bill to require approval of plans and specifications by its Committee on Rules and Administration. The bill was expected to be approved before Congress adjourned. [[underlined]] Museum of African Art [[/underlined]] On Monday, September 18, the House of Representatives passed H. R. 10792, the language of which was substituted for that of S. 2507 as passed by the Senate. It is anticipated that Senator Pell will agree shortly to accept the House language, thereby avoiding a conference on the measure and enabling it to be forwarded to the President for approval. The Senator's willingness to do so stems primarily from a letter he received from the Institution in July, recognizing the need ultimately to move the Museum of African Art to a site more in keeping with its national stature and the anticipated growth of its collections and programs. The letter also provided assurances that Congress would be provided regular reports about the efforts already underway to find such a site.

-108- [[underline]] Status of Smithsonian Television Program [[/underline]] Mr. Ripley reported that a generous grant of $125,000 from IBM has enabled us to conduct "research and development" which will soon result in a proposal to produce a monthly Smithsonian television program on the Public Broadcasting network. For more than four years now the Regents and the staff have shared a keen interest in reaching out with the Institution's diverse interests to a large audience through educational television. We have conceived a magazine format for our shows, and our presentation is now being readied for potential underwriters. We estimate that the seven programs to be produced for the first television season will cost about $3 million. This will have no impact on the Institution's budget, since the sum would be paid by the underwriter directly to Station WETA in Washington, which would be co-producer with the Smithsonian for the series production. The Institution's management and curatorial staff will work closely with the writers and production teams, and will hold the right of final approval for the accuracy of the content and the standards of the presentation. The Secretary and appropriate staff will participate as necessary. The Secretary said, however, that he had been asked to be the narrator of these programs but he was unsure of whether or not this would be possible. Further consideration of this role will be discussed at the appropriate time.

-109- [[underlined]] Sale of Seidell Building [[/underlined]] As reported to the Regents at the May, 1978, meeting, a proposed sale of the apartment building at 2301 Connecticut Avenue, left to the Smithsonian by Dr. Atherton Seidell, failed on May 1 when the purchaser was unable to secure the necessary financing. With the approval of Mr. Webb, the property was once again offered for sale through Frank Phillips, Inc., at the original asking price of $1,150,000 (compared to an appraised value of $930,000). Interest was immediately expressed by several developers, and bids were received at, and slightly above, the asking price. After some negotiation with potential purchasers, a favorable offer of $1,300,000 was accepted on June 14, and settlement took place on July 7, 1978. At the time of closing, the Smithsonian took a short-term mortgage of $200,000 (at 8% interest) which should be paid off in August. It is assumed that the purchasers, a partnership entitled 2301 Investment Partnership, will convert this building into condominiums. The earnest money of $50,000 deposited in escrow by the original group of purchasers, which had included tenants in the building, was declared forfeit by the Smithsonian when this group failed to settle. One of the parties to this original agreement raised legal questions regarding this forfeiture, and there appeared to be the possibility of an impediment to a prompt sale to another purchaser. In consideration of (1) the substantially higher price the Institution was able to obtain when the property was again offered for sale, thereby ensuring that the Smithsonian did not suffer financial loss from the default, and (2) the desire to avoid any litigation or other complications which, in the opinion of the General Counsel could have caused lengthy delays in the sale, parties to the original contract were informed that the Institution intends to return their $50,000 deposit to them.

-110- After deduction of brokerage commissions, Trustee's fee charged by the bank which managed the Seidell Trust, and an outstanding loan on the property, a net of approximately $1,150,000 will be transferred to restricted endowment, income of which will be used "to make more widely available published scientific research."

-111- [[underlined]] MAIL ORDER FULFILLMENT CENTER [[/underlined]] The Smithsonian Mail Order Division, which is responsible for the annual Christmas catalogue, has leased 24,000 square feet of industrial space in Springfield, Virginia. The space, located on a site seventeen miles south of the Mall, will be used for order fulfillment and warehousing of merchandise. Until recently, these activities were housed partially in the Arts & Industries Building and partially at the Service Center on North Capitol Street. The cost of the space is $60,000 per year over the three-year term of the lease. There is an option to renew for an additional two years. It is anticipated that this space will be sufficient to meet the needs of our growing mail order operation for several years. The office space for order processing and associated computer operations is being constructed currently. The fee for this construction is $146,000, and furniture, carpets, and other items will cost an additional $15,000 to $20,000. These costs will be depreciated against the revenues of the Mail Order Division over a three-year period.

-112- [[underlined]] Special $2.0 Million Allocation of Trust Funds [[/underlined]] Numerous awards have been made by the Secretary from the $2.0 million allocation approved by the Regents in January 1978 for collections acquisition, scholarly projects, and educational outreach. Projects selected for funding as of July 26 are as follows. [[underlined]] Collections Acquisition [[/underlined]] $70,000 Museum of Natural History Purchase of Donald Cordry Collection of Mexican Masks, an extensive and well-documented addition to the Museum's ethnographic collections. [[underlined]]$930,000[[/underlined]] Unallocated $1,000,000 [[underlined]] Scholarly Projects [[/underlined]] $5,300 Museum of Natural History (Walter Adey) Coral Reef Exhibit - Purchase of automated equipment for experimental coral reef exhibit including sea water pumps, tissue disrupter and Ultraviolet unit. (Previously reported) $73,856 Museum of Natural History (Wiliam Fitzhugh) Torngat Archeological Project. Interdisciplinary archeological project in northern Labrador. $11,000 Museum of Natural History (John Ewers) Catlin & Mooney tipi publications. Color illustrations for Dr. Ewers' two books, [[underlined]] Indian Art in Pipestone. George Catlin's Illustrated Portfolio in the British Museum [[/underlined]] (Ewers ed.); and [[underlined]] Murals in the Round. Painted tipis of the Kiowa-Apache Indians [[/underlined]] (by Ewers). $29,000 Museum of Natural History (Walter Adey) Coral Reefs as Systems of Organic and Carbonate Productivity. Comparative study of reef structural development and organic productivity throughout the Indo-Pacific. $4,500 Museum of Natural History (Brian Mason) Characterization of Antarctic Meteorites. Catalogue and analyze approximately 300 meteorites recently found in Antarctica.

-113- $11,702 Museum of Natural History (Clifford Evans) An International Symposium Entitled "The Biological Model of Diversification in the Lowland Tropics". Organize an international symposium in Brazil on Lowland Tropics. This symposium will review the work to date by SI scientists in the Amazon, along with other international scholars who are engaged in similar investigations. $6,120 Smithsonian Tropical Research Institute (Mary Jane West-Eberhard) The Social Biology of Polygonous Tropical Wasps. Field study of neotropical social wasps to provide description of the social organization in multi-queen societies, as a means to determine evolutionary processes. $20,900 Smithsonian Tropical Research Institute (Ira Rubinoff) Short-Term Fellowships. Provide short-term fellowships (approximately 3 months)in tropical biology for advanced North American and European students at the Smithsonian Tropical Research Institute. $60,326 National Zoological Park (John F. Eisenberg) Analysis of Animal Communication. Accelerate and interrelate current studies in the areas of vocal, olfactory, and visual communication methods in animals. $4,800 Smithsonian Astrophysical Observatory (George Field) Langley-Abbot Solar Physics Program. Travel funds for 6 scientists to conduct research and attend scholarly meetings concerning the relationship between solar variability and terrestial climate. $40,000 Smithsonian Astrophysical Observatory (Wesley Traub) Far-Infrared Spectroscopy of the Interstellar Medium. Information on electron and neutral particle density, element abundances and ionization conditions of the H II region of the Orion nebula will be obtained using a specifically designed spectrometer. The instrument, of use in the infrared spectrum, splits starlight into 2 parts and directs one beam to a fixed mirror and one to a moving one, recombines them at an infrared detector and the resulting interference pattern is measured as a function of time and interpreted through a mathematical procedure to give the intensity of light. This research will lead to a better understanding of how stars are formed in the universe. $48,678 Smithsonian Astrophysical Observatory (Dalgarno, Kirby-Docken, Kohl & Victor) A Study of the Photo-destruction of Astrophysically Important Molecules. A systematic study of molecular formation and destruction processes, as a means to determine the formation of planetary atmospheres.

-114- $40,000 Smithsonian Astrophysical Observatory (Robert F. C. Vessot) Research on Atomic Hydrogen Masers Operating at Low Temperatures. Analyze the consequences of low temperature maser operation. The SAO maser clock, under study for several years, is a sophisticated test of Einstein's Theory of Relativity. [[underlined]] $143,218 [[/underlined]] Unallocated $500,000 [[underlined]] Educational Outreach [[/underlined]] $180,350 Smithsonian General Audio-visual equipment for Mall Museums. (Previously reported) $10,716 Smithsonian Astrophysical Observatory Science Intern Program for the summer of 1978: to offer minority and women high school students, interested in pursuing careers in science, the opportunity to learn scientific research methods and techniques while working on a one-to-one basis with a leading scientist in an academic research environment. $3,777 Smithsonian Astrophysical Observatory [[underlined]] Space for Women: Perspectives on Careers in Science [[/underlined]] --3rd reprinting of 10,000 copies for distribution, upon request to individuals, high schools, colleges, universities and scientific organizations. $25,000 Museum of Natural History Van visits to classrooms and to groups of elderly, handicapped or institutionalized persons, presenting a one-hour program of objects and activities representative of the Museum of Natural History. $5,000 Museum of Natural History Extend Friday film lecture program to weekends and holidays when more people are able to visit the Mall area. $14,900 Smithsonian Tropical Research Institute Assistantships for students, beginning or contemplating careers in science, to work as research assistants to STRI staff (principally for U.S. citizens). ($15,000 grant available from Exxon Corp. for Fellowships for students from developing countries). $15,600 Smithsonian Tropical Research Institure Environmental Training Seminars for teachers to develop greater environmental awareness and to encourage adoption of environmental and ecological concepts in Panamanian schools.

-115- $48,563 Office of American Studies American Studies Program -- to help offset the expenses of the October 1978 Folklife Festival produced by the Folklife Unit. $25,530 Office of Museum Programs Native American Training Program -- to provide experience in museology for employees of Indian and Eskimo groups which operate their own museum facilities (approximately $100,000 grant requested from the Rockefeller Foundation). $40,000 Smithsonian Institution Traveling Exhibition Service To develop educational materials, geared for ages K through high school with special emphasis on the 13 to 18 age group, to accompany exhibits. $37,050 Office of Public Service Office of Telecommunications. Radio featurettes concerning SI exhibits, activities and research interests: 2 per week, 2-1/2 - 3 minutes in length for distribution to 100-150 major radio markets (publication of featurettes to be considered later, cost $36,000). $40,000 Office of Public Service Office of Elementary and Secondary Education/Resident Associates Program. Services for handicapped (pilot program for hearing impaired) to develop and present programs, train staff, provide trained guides and interpreters ($43,285 requested). $19,150 Office of Public Service Office of Seminars and Symposia. Colloquium, "The Joys of Research," to be held March 1979 in observance of the centennial of the birth of Einstein (matching funds being sought). $25,000 Office of Public Service Division of Performing Arts. Develop and produce 1978 4th of July Celebration in cooperation with Museum of History and Technology. [[underline]] $9,364 [[/underline]] unallocated $500,000

-116- [[underlined]] Status of Collections Management Study [[/underlined]] Since the issuance of the major report on the management of collections in the museums of the Smithsonian Institution, additional studies have been undertaken to determine the extent of the Institution's conservation needs, and in quantifying these needs in the various bureaus. An inventory of the Institution's human and physical resources in the practice and teaching of conservation has been carried out in preparation for the major extension of conservation activities at the Museum Support Center. Related to collections management are the problems of inventory control. Policy guidelines have been drafted and will be presented shortly for the Secretary's approval. These clearly define the areas of responsibilities of directors, staff, and of the central administration, and provide for specific actions at given times. It is expected that these procedures will eventually lead to a far closer control on the physical location of the Institution's collections and facilitate the planning of facilities and the assignment of conservation priorities. ADP procedures will be strengthened and new systems investigated so as to provide for easier access and prompter dissemination of data to the research community. Methods are also under study to systemize cataloguing and retrieval procedures and it is hoped the Institution can play a role in the establishment of national standards, particularly in regard to nomenclature.

-117- [[underlined]] Status of Legislation [[/underlined]] SMITHSONIAN MATTERS [[underlined]] Regents Resolutions [[/underlined]] The legislation reappointing Judge Higginbotham and Mr. Austin and appointing Mrs. Armstrong to the Board of Regents was signed by the President on May 10, 1978. The individual joint resolutions as enacted are designated P.L. 95-274, P.L. 95-275, and P.L. 95-276 respectively. [[underlined]] Museum Support Center [[/underlined]] On May 9th the Senate passed S.1029 to authorize construction of and appropriations totaling $21.5 million for the Museum Support Center. House hearings on the Senate bill were held on August 14 by the Subcommittee on Public Buildings and Grounds of the House Committee on Public Works and Transportation and was reported favorably by the full House committee with amendments. Floor action is expected after the Labor Day recess. [[underlined]] Barro Colorado Appropriations Limit [[/underlined]] No further action seems likely in the current session of Congress on H.R. 3348, the measure to increase the $350,000 limit on appropriations for Barro Colorado Island. It may be recalled that this measure failed on a suspension vote in the House in May, 1977. A compantion bill, S. 1031, passed the Senate earlier in the same month.

-118- [[underlined]] Museum of African Art [[/underlined]] S. 2507, authorizing acquisition by the S.I. of the Museum of Africa Art and appropriations for its operations and maintenance, was approved by the Senate on May 16 with an amendment expressing the intent that the Museum should be relocated as soon as possible and requiring the Regents to report within two years on plans to carry out that intent. The Subcommittee on Libraries and Memorials of the Committee on House Administration held a hearing July 16 on H.R. 10792, sponsored by Mrs. Boggs, which would also authorize acquisition of and appropriations for the Museum of African Art. The bill was reported favorably by the House committee but without the amendments approved by the Senate. It is expected that the legislation will be on the consent calendar of the House September 11 or 12. Senator Pell and Representative Nedzi are expected to confer shortly after House passage in an effort to reach an agreement. MATTERS OF SMITHSONIAN INTEREST [[underlined]] Endangered Species Reauthorization [[/underlined]] On July 19 the Senate passed S. 2899 to reauthorize the Endangered Species Act of 1973 which expires on September 30. The bill also provides for a committee to consider and grant exemptions from the law in individual cases, and in the version reported by the Committee on Environment and Public Works the Secretary of the Smithsonian Institution was a statutory member of that committee.

-119- Because it may be inappropriate for the Secretary to perform Executive Branch functions such as this the assistance of Senator Jackson was sought and the Administrator of the National Oceanic and Atmospheric Administration was substituted for the Smithsonian Secretary on the Committee. The House Committee on Merchant Marine and Fisheries held hearings on H.R. 10883 which reauthorizes the Act through FY 1981 and reported the bill on March 3, 1978. Mark-up on H.R. 13807, an amended bill providing reauthorization through FY 1981, will continue after the recess. [[underlined]] Museum of Building Arts Study [[/underlined]] The Senate Committee on Environment and Public Works has reported S.J. Res. 143 "to initiate preliminary studies for the restoration and renovation of the Pension Building....to house a Museum of the Building Arts." The Secretary is directed to report to the Public Works committees before October 1 on visitor projections; potential inter-institutional relationships; and space requirements. H.J. Res. 1070 is for the same purpose and imposes the same requirement; however, the reporting date is advanced to January 1, 1979. Action on these resolutions is expected before adjournment of the Congress.

-120- [[underlined]] Trade (Tariff) Commission Building [[/underlined]] Since the May 1978 report to the Regents on the Trade Commission Building, Smithsonian and Trade Commission staff met with members of the Pennsylvania Avenue Development Corporation. The meeting focused on potential building sites within the PADC area, and compatibility of Smithsonian use of the Trade Building with other PADC proposals. It appears the PADC could offer several site development options which might be appropriate and attractive for the Trade Commission. Preliminary planning could not occur without specific authorization by the General Services Administration. Mr. Jay Solomon (Administrator of the General Service Administration, and an active member of the PADC Board of Directors) is still guided by Administration policy limiting additional space and rearrangement for government staff and buildings in Washington. Mr. Solomon continues to support public use of the Trade Building for museum purposes and recently announced his intention to submit a revised building prospectus to Congress. The new prospectus (not unlike the one used for the old Patent Office Building) probably will describe the Trade Building as architecturally inappropriate for office use and will recommend its restoration and preservation for museum and other public purposes. Mr. Daniel Minchew's two-year term as Chairman of the U.S. International Trade Commission expired June 30, 1978, and he has been succeeded by Mr. Joseph O. Parker. Mr. William Alberger has been appointed Vice Chairman and will serve a concurrent two-year term. Mr. Parker is a native of Kansas and a member of the Republican Party. He is a Harvard Law School graduate and a respected authority on international trade.

-121- The Institution over the next several months will acquaint itself with newly appointed members of the Commission, and will continue to explore relocation sites and Administration interest in this project.

-122- [[underlined]] Mall Underground Parking [[/underlined]] At the meeting on May 5, 1978 the Board of Regents expressed a continuing interest in alleviating the problem of visitor parking and passed the following motion: VOTED that the Board of Regents directs the Secretary to continue planning for underground Mall parking and approves the sum of $70,000 of trust funds for Phase II of this project, and that appropriate committees of Congress be informed. Letters have been sent to all appropriate Senate and House committees of Congress informing them of the interest and actions taken by the Regents to continue the planning efforts. The Phase II studies are intended to update and supplement the earlier feasibility efforts and address significant issues including visitation characteristics and data, assessment of current and future demand, investigation of alternative solutions, analysis of facility design, transportation and traffic studies, economic analysis, estimates of construction and operating costs, environmental assessments of the impact of proposed actions and alternatives, financing and development proposals. As a matter of policy, it was decided to follow the procurement method generally employed for federally financed projects. The first step in this process involves the publishing of an appropriate announcement in the Commerce Business Daily, the Department of Commerce publication for businesses interested in selling to, buying from, or making business proposals to the Federal Government.

-123- Eleven firms have indicated their interest in participating in the Phase II studies and have furnished information on their capabilities, extent of services, past experience, and qualifications. The top ranking organizations will be given an opportunity to discuss the project in detail and furnish proposals for further consideration leading to final selection and prompt award of a contract to perform the required services. Cooperative efforts and the exchange of information will continue with National Park Service, Council of Governments, District of Columbia Planning Office, National Capital Planning Commission, WMATA, Commission on Fine Arts, and other interested parties aimed at maintaining good relationships and a high degree of understanding of our interests and efforts.

-124- [[underlined]] Status of Personnel Recruitments [[/underlined]] [[underlined]] Director of the National Air and Space Museum [[/underlined]] A search committee composed of six members (including two from outside the Smithsonian) and Dr. David Challinor, Assistant Secretary for Science, as chairman has met to develop detailed plans for conducting an extensive search for prospective candidates for this museum directorship. The recruiting announcement will be publicized in major professional journals and the [[underlined]] New York Times [[/underlined]]. In addition, individual contacts will be made with potential candidates as a means of identifying well-qualified candidates. The search committee is expected to complete its search process by next January. [[underlined]] Director of the National Museum of History and Technology [[/underlined]] The search committee chaired by Mr. Charles Blitzer, Assistant Secretary for History and Art, is currently in the process of evaluating approximately 20 applications received in response to newspaper and professional journal advertisements. Five candidates have been interviewed by the committee as part of its screening process. The committee is also continuing its search efforts through individual contacts with potential candidates. Dr. Otto Mayr, Chairman, Department of History of Science, has been appointed as Acting Director, effective June 18, 1978, and will serve in this capacity until a permanent selection is made for the directorship.

-125- [[underlined]] Director of Smithsonian Institution Libraries [[/underlined]] An extensive search for prospective candidates is still in progress. Two top candidates previously identified as a result of the initial announcement have withdrawn their candidacy, and several other qualified candidates interviewed by the search committee were not considered sufficiently qualified for the position. The search committee headed by Mr. Paul Perrot, Assistant Secretary for Museum Programs, has extended its search in a further effort to locate additional well-qualified candidates. The recruiting announcement is being readvertised in major professional journals and newspapers to assure a nation-wide publicity of the position. The extended search is expected to produce a number of well-qualified candidates for consideration. It is hoped that the position will be filled by the end of this year.

-126- LITIGATION REPORT [[underlined]] New Cases [[/underlined]] 1. [[underlined]] Dance [[/underlined]] v. [[underlined]] Ripley [[/underlined]] This suit was filed August 7, 1978, in the U. S. District Court for the District of Massachusetts, alleging racial discrimination in that the plaintiff, a black female, was not chosen for a higher paid position. Although the suit was filed under Title VII of the Civil Rights Act, the plaintiff is a Trust Fund employee of the Smithsonian Astrophysical Observatory. 2. [[underlined]] Lucas [[/underlined]] v. [[underlined]] Ripley [[/underlined]] It was previously reported that this employee filed an "equal pay" and "Privacy Act" suit in April 1978. Plaintiff has now filed an additional, separate suit, alleging sex and racial discrimination, on behalf of herself and all black employees of the Institution (a class action). The basis of this suit is the same as that of her "equal pay" suit: her non-selection for a higher paid position. 3. [[underlined]] Mount [[/underlined]] v. [[underlined]] Sadik, et al. [[/underlined]] This action in libel was brought on May 16, 1978, against the Director of the National Portrait Gallery, the magazine [[underlined]] Artnews [[/underlined]], and the publisher and a reporter of the same. A portrait of George Washington, owned by the Free Public Library of New Bedford, Massachusetts, has been declared by the plaintiff to be an original Gilbert Stuart. Upon request of the Library, the Director of the NPG rendered his opinion: that the painting was by William Wall. The March issue of [[underlined]] Artnews [[/underlined]] carried an article on the attribution dispute, reporting as well an earlier controversy involving the plaintiff. A motion to dismiss the Director of the NPG from the suit was filed by the U. S. Attorney for the Southern District of New York on July 20. To date, there has been no decision on the motion. [[underlined]] Cases Previously Reported [[/underlined]] 1. Petition of the United States on behalf and for the benefit of the Smithsonian Institution, Trustee [[line]] A petition requesting the court to construe certain provisions of the J. Seward Johnson gift was filed in the United States District Court for the District of Columbia by the Department of Justice on behalf and

-127- for the benefit of the Smithsonian Institution, Trustee, on February 24, 1977. Since that time extensive discovery proceedings have been undertaken. The Harbor Branch Foundation, Inc., and J. Seward Johnson were permitted to intervene as interested parties and to file a response to the petition of the United States. Subsequently, the intervenors were permitted by the court to amend their original response to include allegations that the Smithsonian failed to exercise adequate control over the trust funds, that expenditures from trust funds were made by the Smithsonian in contravention of the terms of the gift, and that the Smithsonian is hostile to the alleged purposes of the trust. Pretrial conference between the court and counsel has taken place; and trial date has been rescheduled for October 16, 1978. 2. [[underline]] Expeditions Unlimited Aquatic Enterprises, Inc., et al. [[/underline]] v. [[underline]] Smithsonian Institution [[/underline]] On June 27, 1978, the petition for certiorari filed in the Supreme Court by the plaintiff-appellee was denied (46 LW 3803). This is an action in libel against the Institution and a federal employee. On September 16, 1977, the U. S. Court of Appeals (566 F. 2d. 389 (D. C.)) held the Smithsonian Institution immune from suit and remanded the case to the court below for further exploration of the issue whether the individual defendant was acting within the ambit of his employment when the letter in question was written. The court also held that if he was acting within his discretionary duties, he would have absolute immunity. 3. [[underline]] Disposition of Old Woman Mountain Meteorite [[/underline]] The Old Woman Mountains meteorite was found in 1976 by private individuals on Federal land, in Southern California, under the jurisdiction of the Department of the Interior. It was transferred by the Interior Department to the Smithsonian Institution for accessioning into the National Collections. A suit filed by the finders in June 1977 to obtain title to the specimen was dismissed with prejudice by the Federal District Court in Los Angeles. In a suit filed by the Museum of the County of San Bernardino and by the State of California, the Federal District Court, on December 27, 1977, denied requests by plaintiffs for a preliminary injunction (to keep the specimen in California) and title to the specimen. Thereafter, the Smithsonian Institution moved the meteorite from California to the National Museum of Natural History in Washington, D. C., for study. The December 27, 1977, ruling of the Federal District Court has been appealed by plaintiffs to the U. S. Court of Appeals for the Ninth Circuit. On July 25, 1978, the Federal District Court granted the motion filed by the United States to dismiss the suit filed by the plaintiffs. Plaintiffs have consolidated an appeal from the July 25, 1978, decision with the

-128- earlier appeal to the Ninth Circuit Court of Appeals. On August 23, 1978, the Federal District Court also denied plaintiffs' request that the court order the Smithsonian Institution not to cut the meteorite prior to a ruling by the Ninth Circuit on plaintiffs' pending appeals. The Justice Department has advised that a ruling by the Ninth Circuit Court of Appeals on the merits of plaintiffs' case could take more than two years. 4. [[underline]] Benima [[/underline]] v. [[underline]] Smithsonian Institution [[/underline]] In this suit, filed in the U. S. District Court for the District of Massachusetts in January 1976, the plaintiff alleged age and national origin discrimination. A motion to dismiss the case against the United States and the Smithsonian Institution was granted on August 15, 1978. Further pleadings concerning the remaining defendant, a Smithsonian employee named in his individual and official capacities, will be filed in September. It is anticipated that a dismissal motion in favor of that defendant also will be granted in the near future. 5. [[underline]] Chedister [[/underline]] v. [[underline]] United States [[/underline]] A trial date of October 17, 1978, has been set for this U. S. Court of Claims case in which a former employee of the National Air and Space Museum is challenging his termination under a reduction-in-force procedure. 6. [[underline]] Foster [[/underline]] v. [[underline]] Ripley [[/underline]] December 12, 1978, has been set as a hearing date for the cross motions for summary judgment pending in this case in which plaintiff, a former employee of the Smithsonian Science Information Exchange, is alleging that his removal from office was in derogation of his right to due process under the Fifth Amendment and his right to free speech under the First Amendment. 7. There have been no recent developments in the following cases, which have been reported previously to the Board: [[underline]] Bowler [[/underline]] v. [[underline]] Ripley [[/underline]] (racial discrimination) [[underline]] Crowley [[/underline]] v. [[underline]] Smithsonian Institution [[/underline]] (claim by creationist group that the National Museum of Natural History exhibit on evolution theory violates the First Amendment (establishment clause)) [[underline]] Lucas [[/underline]] v. [[underline]] Ripley [[/underline]] (equal pay and Privacy Act suit) [[underline]] Scherer [[/underline]] v. [[underline]] Ripley [[/underline]] (sex discrimination)

-129- [[underline]] United States [[/underline]] v. [[underline]] Tougas [[/underline]] (to recover proceeds of sales of federal excess property) [[underline]] Winston [[/underline]] v. [[underline]] Smithsonian Science Information Exchange [[/underline]] (racial discrimination) [[underline]] Cases Disposed Of [[/underline]] 1. [[underline]] Precure [[/underline]] v. [[underline]] United States [[/underline] As previously reported, this suit was filed April 21, 1976, against the United States and a Smithsonian security guard because of an incident in the Gem Hall of the National Museum of Natural History when a 17-year-old boy was placed under arrest for tampering with the alarm apparatus underneath a gem display case, and his father for interference with an officer. The complaint alleged false arrest, malicious prosecution, and other improprieties and sought compensatory and punitive damages totaling $900,000. A separate trial of the suit against the Smithsonian security guard was held in the U. S. District Court of the District of Columbia in August and prior to the matter being turned over to the jury, the plaintiffs agreed to withdraw all charges against the guard and to accept $500 in full settlement of all claims against the United States. The Department of Justice represented the United States in this matter, and the guard was represented by a private attorney, who was retained for the security guard at the expense of the Department of Justice. 2. [[underline]] Morrissette [[/underline]] v. [[underline]] United States [[/underline]] The U. S. Court of Claims on March 3, 1978, ruled in favor of the Institution and the United States, holding, in effect, that the Smithsonian had properly relied upon Mr. Morrissette's letter of suretyship and had properly utilized the surety's funds to complete the fabrication of the "Nation of Nations" exhibition. 3. [[underline]] Munger [[/underline]] v. [[underline]] United States [[/underline]] [[underline]] Radin [[/underline]] v. [[underline]] United States [[/underline]] These cases involved minors who were injured in 1976 while riding the escalators in the National Air and Space Museum. Tort claims filed on behalf of each child were denied by the Smithsonian because it could not find that their injuries were caused by negligence on the part of the Institution. Both then sued the United States and Otis Elevator Company, which manufactured, installed and serviced the NASM escalators. The Munger case went to trial with a favorable verdict for the United States and a nominal sum awarded the plaintiff from Otis. The plaintiff petitioned for a new trial, but subsequently decided against this course of action. At the time of the Munger trial, Radin accepted an out-of-court settlement of $10,000, two-thirds of which was paid by Otis and one-third by the United States.

-130- 4. [[underlined]]Claims arising out of construction of the Hirshhorn Museum[[/underlined]] The claims arising out of construction of the Hirshhorn Museum were settled and paid as with other claims against the United States.

-131- [[underline]] Status of Construction [[/underline]] [[underline]] Arts and Industries Building Roof Repair [[/underline]] A construction contract in the amount of $775,000 has been awarded for the second phase of the Arts and Industries Building roof repair project. This work includes repair of the roof over the rotunda and four major halls, plus repair of some wooden window sashes. It is anticipated that additional repair funds in FY 1979 could be added to the current contract for the repair of the roof over the four courts. About $225,000 of additional roof repair funding will be included in the FY 1980 budget request to allow this project to proceed on a scheduled basis. [[underline]] East Garden and Garden for the Handicapped [[/underline]] Preliminary, conceptual designs for the East Garden (located at the east entrance of the Smithsonian Institution Building) and the Garden for the Handicapped (located to the east of the Arts and Industries Building and west of the Hirshhorn Museum) have been completed and approved by the National Capital Planning Commission and the Commission of Fine Arts. An architectural/engineering firm(s) will be selected in the near future for the preparation of detailed drawings and specifications based on the approved designs. Preliminary construction cost estimates are $180,000 for the Garden for the Handicapped and $95,000 for the East Garden. [[underline]] National Zoological Park [[/underline]] The new bear exhibits opened to the public on July 24, 1978, and plans are currently being made for the official opening of the new home for Smokey Bear. Work is progressing in Beaver Valley, which will open in mid-November and will exhibit beavers, otters, wolves, seals, and sea lions. As the first major action by the National Zoological Park's Conservation and Research Center in compliance with the Clean Air Act, water lines between the Center and City of Front Royal are currently being installed and are scheduled to be operational by the end of August 1978. The next phase, to be accomplished during FY 1979, will provide for sanitary sewer lines. [[underline]] South Garden and the Renwick Gates [[/underline]] Plans are proceeding in the development of the Victorian Garden. As approved by the Board of Regents, architect Junzo Yoshimura is now under contract to design a scheme for the

-132- building for oriental art, for collections and temporary exhibitions, and an underground connector to the Freer Gallery of Art. Design of the James Renwick Gates has now been approved by the National Capital Planning Commission and the Commission of Fine Arts. In an effort to keep costs in the range of $150,000, as previously approved by the Board of Regents, an architectural historian has reviewed the design, and we are currently evaluating his comments as well as exploring other alternatives. [[underlined]] Other Projects [[/underlined]] An architectural/engineering contract (study and design) for the development of a [[underlined]] fire protection master plan for the Museum of Natural History [[/underlined]] is awaiting final approval. The [[underlined]] Museum of History and Technology terrace [[/underlined]] repair construction contract is nearing completion, and design for next phase of work is complete. A construction contract for phase I of the [[underlined]] Renwick Gallery exterior repairs [[/underlined]] is in progress. An A/E firm has been selected to design improved access and egress for the Mall entrance of the Museum of Natural History and to design modifications for the north door to provide [[underlined]] access for the handicapped [[/underlined]]. Additionally, an A/E firm has been selected to design [[underlined]] modifications to the Hirshhorn Sculpture Garden to provide access for the handicapped [[/underlined]].

-133- [[underlined]] Selected Studies Program of the National Associates [[/underlined]] There were three five-day courses, each for 30 participants, offered in the spring: Hirshhorn Sculpture Garden, Smithsonian Horticulture, and China. Playbacks from those who attended were virtually unanimous in expressions of satisfaction and enjoyment of these courses as Smithsonian learning experiences. Four courses for the autumn have been advertised in SMITHSONIAN, and their acceptance by Associates has been most encouraging. Courses on Antiques and Genealogy are now filled; the courses on Flight and the Solar System are two-thirds filled, and it is expected they, too, will soon be entirely registered. Conceived as a new benefit for National Associates who live at some distance from the Mall, this program now appears to have justified its establishment. Making use of the collections for resource material and, for the most part with Smithsonian curatorial staff as instructors, Selected Studies appears to be another successful outreach activity of the Smithsonian Associates.

-134- [[underlined]] Report on Smithsonian Symposia and Seminars [[/underlined]] "The Joys of Research" is the theme of a colloquium scheduled for March 16-17, 1979 as a major Smithsonian contribution to the observance of the Centennial of the Birth of Albert Einstein. Invitations are now being prepared for eight distinguished scientists to participate by making informal statements about how they became interested in research, the excitement -- and frustrations -- of exploring the unknown, and reflections on research as a way of life. A volume, to be edited by Smithsonian physicist Dr. Walter Shropshire, Jr., of the Radiation Biology Laboratory, will provide young people with a basis for considering careers in science. Participants will include renowned scientists in various disciplines. One feature of the colloquium will be an evening concert and a lecture, "The Act of Creation in Music," by William Schuman, Lincoln Center for the Performing Arts, to be presented in the auditorium of the National Academy of Sciences. The colloquium will be financed by the Smithsonian Institution and through corporate sponsorship now being sought. The tie to the Einstein Centennial will be made through a luncheon speaker, P.A.M. Dirac, theoretical physicist, Florida State University, who once worked with Dr. Einstein. * * * * Wilton S. Dillon, Director of Smithsonian Symposia and Seminars, has been named an honorary commissioner of the U.S. National Commission for the International Year of the Child, in which the Smithsonian is playing

-135- a key role. A symposium and festival with both adult and children participation is scheduled for May 24-26, 1979 on the theme, "Play and Inventiveness." The International Year of the Child, through Smithsonian cooperation, was introduced into the Festival of North Carolina Folklife, July 1-4, in the form of a Children's Area inspired by the Smithsonian Festival and the Smithsonian "Kin and Communities" Symposium. George M. Holt, grandson of Regent George Mahon, was director of the festival at Durham.

-136- [[underlined]] New Research Vessel for STRI [[/underlined]] The Smithsonian Tropical Research Institute recently acquired a new research vessel, the 63-foot twin engined, steel hulled "Indra V." Mr. and Mrs. Edward B. Benjamin of New Orleans, Louisiana, indicated in late June that they were considering the donation. After discussions with STRI's Director, Ira Rubinoff, and Smithsonian Assistant General Counsel Robert Dierker during the middle weeks of July, title to vessel was transferred to the Smithsonian on July 27, 1978. "Indra V," following a name change and minor modifications, will complement and eventually succeed the 42-foot wooden hulled "Stella" now used by STRI staff for research work in the Perlas Islands in Panama Bay, the Secas Islands in the Gulf of Chiuqui, and the San Blas Islands in the Atlantic. In addition, because of her greater range and space, the "Indra V" will enable STRI to conduct research in areas not now accessible to the "Stenella," and to restore other capabilities lost when the 65-foot wooden hulled "R. V. Tethys" was declared unseaworthy in 1974. Because of her steel hull the "Indra V" is more ideal for use in the tropics than the previously utilized wooden hulled vessels. It is anticipated that the operating expenses of the vessel can be met within the research funds available to STRI. Captain Thomas Borges, STRI's facilities manager who is a licensed and experienced pilot, and a small additional crew, will transport "Indra V" from New Orleans, Louisiana to Panama, before the end of August 1978.

-137- [[underlined]] New Business [[/underlined]] The Secretary reported that in the past several months consideration has been given to the suggestion that there be established bylaws for the Board of Regents, and policies and procedures for the guidance of the Secretary and the Board of Regents. In dealing with the bylaws in a very preliminary way, there are two matters brought to the Regents' attention at this time which might be described as "housekeeping" functions. The first relates to a fixed date for meetings of the full Board of Regents so as to assure the greatest attendance possible. The statute, 20 USC 44, states: "The board...shall fix the time for the regular meetings of the board;...and at any meeting of the board, eight shall constitute a quorum to do business...." Mr. Webb stated that the Regents have certain work which must be done at certain times. He felt that one of the matters to be considered is whether the Executive Committee can handle these or whether or not the Regents would want to meet four instead of three times each year. The recommendation of the Executive Committee was that there be three regular meetings of the Board annually and the Executive Committee will meet at other times and will invite Regents to come to Executive Committee meetings if they wish permitting those who can

-138- participate to do so. This would permit us to obtain an authoritative vote on any matters on the agenda. Mr. Ripley stated that to avoid conflicting with other fixed commitments of the Regents a study was conducted to establish a date which would be the most unencumbered for the largest number of Regents. Indications at first appeared satisfactory but additional conflicts developed which suggests that with the concurrence of the Board, there might be fixed the first two meeting dates for the year 1979. The following dates were approved. -- January: Dinner, Sunday evening, January 21 (possibly at Vice President's residence) Meeting, [[underlined]]Monday, January 22,[[/underlined]] 8:30 a.m. -- May: Dinner, Tuesday evening, May 8, in Tucson, Arizona, and brief meeting [[underlined]] Wednesday, May 9 [[/underlined]], convene at Mt. Hopkins in conjunction with dedication of Multiple-Mirror Telescope. (Depending upon the configuration of the sky, the dedication may possibly be best on the evening of May 8.) Inasmuch as the consolidated Smithsonian budget submission is due at the Office of Management and Budget on September first annually, and in order to present a Regents' approved budget on schedule it has been suggested that an Executive Committee meeting be scheduled in mid-August, inviting the full Board of Regents to attend in order to conduct

-139- a timely review of the budget. The tentative date for this meeting could be [[underlined]] Monday, August 20, 1979 [[/underlined]] but will be discussed at the January 1979 meeting. Also to be considered is the date of a full Board meeting tentatively suggested for Monday, September 17, 1979. With respect to the tenure of the Regents, the House Investigation Report suggested that the Regents consider "limited the appointment of members of the Board of Regents to 12 years or two consecutive terms to increase Regent participation and provide additional periodic policy and program stimulation." The statute states: "The regular term of service for the other nine members shall be six years" (20 USC 43). Should the Regents wish to prescribe a limitation of two six-year terms a resolution to that effect can be prepared for the next Regents' meeting. Regents are asked to consider these questions and make their views known to the Executive Committee. It should be noted that a two-term limitation for citizen Regents would not require a change in the legislation, since the statutory provisions of the founding act would not be altered.

-140- [[underlined]] Citation to Mr. Mahon [[/underlined]] Mr. Ripley announced that George Mahon was attending his last official function as a Regent of the Institution since he will be retiring as a Representative of Congress at the end of the year. Mr. Ripley presented a gift and a citation to Mr. Mahon which reads as follows: The Members of the Board of Regents and the Secretary of the Smithsonian Institution with admiration, gratitude, and respect for Representative George H. Mahon commend him for his distinguished service as a dedicated member of the Board of Regents since 1964, supporting and advancing the programs of the Institution and for the profound effect his leadership has had on our Nation through 44 years in the Congress of the United States. (signed) [[underlined]] Warren E. Burger [[/underlined]] Chancellor [[underlined]] S. Dillon Ripley [[/underlined]] Secretary September 25, 1978

-141- Mr. Mahon said that he was very enthusiastic about the work that has been done and is being done. He also observed that he was aware of the fact that Dillon Ripley, strong and able as he is, and Jim Webb have meant so very much to the Institution. Mr. Webb conveyed the personal appreciation of the Chancellor too and indi

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