Re: Pricing of Journals

On 21 Jan 1999, Bert Boyce <lsboyc[_at_]lsuvm.sncc.lsu.edu> wrote:
>
> On 1/20/99, Albert Henderson <noblestation[_at_]compuserve.com> wrote,
> in response to C. E. Petit:
> >
> > > > o Their combined endowments exceed $100 billion.
> > >
> > > COMMENT: So what?
> >
> > Is it not clear? They are HOARDING CASH! They have put financial
> > surpluses above goals of research, education and public services.
> > They are investing in financial markets at the expense of knowledge.
> > Research universities' endowments (in constant dollars) doubled over
> > the last nine years, faster than growth of research and far faster
> > than growth of library spending. In spite of pleas from faculty
> > Senates, administrators claim they can't afford decent libraries!
>
> While I am loath to get back into this journal availability
> discussion, this endowment business needs comment. Universities'
> endowments come from contributors who normally earmark the use of the
> earnings of their funds given. They are for scholarships, or to support
> certain departments operations, to fund Chairs and professorships, or
> even to support library acquisitions. Research generated dollars are
> not going into endowments, nor are general fund dollars. These are
> contributions used as the donor's wish. Sure we give them ideas on how
> their money can be used, and maybe we ought to make library acquisitions
> a higher priority, but to claim some hoarding of cash when the earnings
> of dedicated funds are spent as required by agreement with the donor is
> a misrepresentation of fact.

Thank you. Most people seem to be surprised when I say "hoarding cash."

Here are undisputed facts from the Digest of Education Statistics 1997:

REVENUES, EXPENDITURES, AND EXCESS REVENUES FOR RESEARCH AND DOCTORAL UNIVERSITIES 1994-95      in thousands

Control and type        Revenue         Expenditure       Excess
====================    ===========     ===========      ========= 
Public Research U I     $44,824,870     $43,353,284     $1,471,586 
Public Research U II     $7,181,999      $7,068,658       $113,341 
Public Doctoral         $12,666,282     $12,141,645       $524,637 

Private Research U I    $26,860,577     $26,154,592       $705,985 
Private Research U II    $4,070,600      $3,868,995       $201,605 
Private Doctoral         $6,565,928      $6,381,985       $183,943 

Total all above (236)  $102,170,256     $98,969,159     $3,201,097 

Where do the profits go if not into the "endowment?" They cannot be distributed to shareholders.                         

In a story that appeared to be about salaries, Chronicle of Higher Education (Oct 23, 1998:A39-58) revealed 1997 revenues and expenditures of private universities which they reported to IRS on form 990. Harvard, for instance, reported income of $3,300 million while spending $1,500. This leaves a profit of $1,800. I analyzed this data in my Rebuttal to responses to my article, "Science in the Twilight Zone; Or, Are Science Libraries Related to Science," in ISSUES IN SCIENCE & TECHNOLOGY LIBRARIANSHIP which can be found at http://www.library.ucsb.edu/istl/98-fall

In the New York Times (Oct 21, 1998:B9) Karen W. Arenson reports that wealthy universities are beginning to loosen their purse strings as endowments soar. Why don't they restore their library collections?

In constant dollars, endowments of 71 research universities doubled between 1986 and 1997 -- nine years. Their library collections and educational programs did not do anywhere near as well, did they?

That is why I made the following statement in my letter to SCIENCE:

"Rather than face responsibility for inducing the journals crisis, universities complain. They have transposed their priorities, becoming financial organizations that grudgingly produce research and education."

Albert Henderson
Editor, PUBLISHING RESEARCH QUARTERLY
<70244.1532[_at_]compuserve.com> Received on Fri Jan 22 1999 - 13:37:37 GMT