While ruminations on what he would do with 300 million dollars are the occasional day-dream of the average University official, such thoughts are the perpetual nightmare of Paul C. Cabot '21.

His 300 million dollars are like 300 million eggs in that they would make a mess if put in an unstable basket. It is Cabot's task therefore to place them in widely diversified yet highly profitable baskets, a responsibility which is obviously too staggering for one man.

Hence during the five and one-half years he has held the job, Cabot has worked with the guidance of a full-time staff of 30. This group of consultants is known as the State Street Research and Management Company, and its findings are shared by only two clients--the State Street Investment Corporation, of which Cabot is president, and Harvard University, of which he is treasurer.

Statutory Instructions

Harvard Statutes provide that while serving in the latter capacity he "shall have charge of investments of the University, and except as the Corporation with the consent of the Overseers shall by vote from time to time otherwise direct, shall have charge and administration of the finances of the University."

And his task is every bit as cumbersome as his statutory instructions. As a matter of fact, the better the treasurer, the more voluminous becomes his work, for his investment funds appreciate with compound interest.

On the other hand, however, a mistake made with $100,000 which would have been disastrous a century ago would be hardly noticeable today.

In general, Cabot, with his total investment assets of approximately $308,000,000 faces the same problems as the 17th century treasurer. Although dealing in bigger sums, he has confidence and security unknown in the precarious past, and this is the major difference.

Survival possibilities which Thomas Danforth, the first treasurer, pondered with growing concern in the 1650's are taken for granted by Cabot's going concern of the 1950's. Financial affairs were so crucial during Danforth's reign that President Dunster decided to handle them himself.

The first president ran the University on an annual budget of 175 pounds, 55 of which were Dunster's own salary. Tuition then was about a pound and a third per year, but the student had to pay an additional three pounds when he received his degree. Whatever capital was available in those days could be let out at eight percent.

No Surplus to Invest

Dunster was more occupied with making ends meet, however, than with investing surplus. In fact, the school's financial condition was so dubious in 1653 that the Massachusetts General Court began an investigation. The following year, the Court's committee ordered that financial powers be transferred from the Corporation to the Overseers.

This was too much for Dunster, and the first president, calling the committee's action "questionable and offensive," immediately resigned. Fortunately for the good name of Harvard, however, the investigation proceedings were not televised.

Although Dunster upbraided the Commonwealth for its interference, one should remember that Massachusetts presented the struggling school with over $215,000 between its founding in 1636 and 1824. The surrounding municipalities were also very generous to the University during its fight for survival in the 17th century, with almost every New England town appearing on the roll of donors.

And the local farmers lent a hand as well. The "College Corn" campaign to which each family was asked to contribute a peck of wheat per year supported a dozen scholarships and paid the salaries of the entire faculty during this period.