The University's investments in stocks are widely split up; there is no corporation that Harvard dominates. A fall in one part of the market is not likely to have a disastrous effect. University oil stocks, while still sound, have fallen somewhat from 1948 highs.
Harvard has only very small holdings in the real estate field which has tended to be rather unreliable in recent years, as far as conservative investors were concerned.
The University must always watch out for public events that will effect the value of their investments. Prior to the 1948 election, the University converted a significant amount of long-term government bonds into short-term government ones. It was felt that the expected Republican administration might not continue to support the price of the long-term bonds.
Insurance Plan
Investments is merely one phase of Harvard's finances. University officials must worry about mass purchasing and the cost of building maintenance.
An illustration of the complexity of the other parts of University's financial affairs is its new insurance program adopted last July. Like a few large corporations, the University now has no fire insurance with outside companies on its academic properties.
The various divisions of the University now pay into a central fund the money they formerly gave to the insurance companies. The University pays for all damages that ordinarily would be covered by insurance.
Before adopting this self-insurer policy, the President and Fellows had a study made of the amount of premiums that Harvard had paid previously. Going back 12 years, the investigators discovered that--with the exception of the hurricane year of 1938--the premiums annually exceeded the amount the University got back for damanges. Last year the various schools paid about $45,000 in premiums and got back about $5,000 from the insurance companies.
When the self-insurer program started, $1,500,000 of Thomas W. Lamont's $5,000,000 bequest was transferred to an Insurance Reserve Fund. Profits from the insurance plan are expected to pay this sum back