Harvard's money men had some bad news and some good news this week.

First the bad news: The University's billion-dollar-plus endowment failed to show any significant growth this year for the second time in recent memory.

Then the good news: Harvard ran a surplus, which, compared to the past five years, was indeed significant.

But both items were, in effect double edged. The endowment, the sum of all of Harvard's investments, showed a tiny gain: $1.7 million, or only one-eighth of one per cent of the nearly $1.4 billion total. And this gain was only gotten through an unprecedented 72 per cent increase in private giving for endowment purposes. The actual value of the University's stocks and bonds fell by 2.5 per cent.

Harvard's financiers blame the drop on a bad year in the stock market. They maintain, however, that despite a weak Wall St., Harvard managed to do better than everyone else.

"Compared to Yale and Dartmouth and the others, our 2.5 per cent looks pretty good," says George Putnam '49, Harvard's new treasurer. Putnam himself could not be held accountable for the results, no matter how good or bad. All of the past year's financial management was done by his predecessor, George H. Bennett '33.

Ideally, the University's endowment should grow in pace with or faster than inflation. In this way, it would provide a constantly growing source of income to pay for continually rising costs.

Income from the endowment is the sum of dividends on stocks and interest on bonds. Growth of the endowment depends on increases in the price of stocks or on gifts of securities.

Harvard has several sources of income besides the endowment. Tuition and room and board charges annually provide for about one quarter of income, and gifts and government grants make up the rest.

This year room and board fees and the government provided more than the administration expected. Total income came to $219 million while total expenses came to only $217 million. Thus, a surplus of $2 million resulted.

A surplus is taken as a sign of health, but in itself it has no value. It simply means that Harvard is not spending all the money it has available to spend. As Financial Vice President Hale Champion pointed out, "Opportunities lost are not represented in the balance sheets."

In a time when educational programs are being shelved and students squeezed more and more, running a surplus is indeed a questionable act.