# LCMS Convention Proceedings_St. Louis Missouri_1956_S261
# Machine transcription, uncorrected — CHI Digital Archive (demonstration)

260 SEMINARIES AND COLLEGES

vention on its findings. Your Board in a special meeting proceeded
i: immediately to this task, but with no hope for its completion in
time for inclusion with this report.

Yo . Your Board proceeded on these assumptions:

1. Principles and policies for capital investments in Synod’s
colleges and seminaries do not without further investigation
validly apply to capital investments in mission areas abroad
(churches, schools, compounds, bungalows, hospitals, etc.) or to
Church Extension funds in the U.S. and Canada or even to the
so! | administrative operations of Synod itself.

i _ 2. No deficit financing for Synod’s current operating expenses

is desirable.

3. Capital invested in buildings is fixed and cannot readily be

used for anything else.

4. Synod’s investment in fixed capital is so large that Synod
must always be engaged in replacement, as well as in the extension
; or the addition of new buildings and equipment.

5. The capital investment currently required cannot be pro-
vided out of one year’s synodical income budget. In one way or
another the investment must be spread over a period of years.

i 6. Borrowing as a basic fiscal policy, except in moderate and
controlled amounts and for relatively short periods, would be ter-
ribly costly. Increasing indebtedness means increasing annual
interest obligation. Without limits this can result in a continuous
extra load over the contract prices of buildings erected.

7. Since interest builds no buildings, any rapid or pyramiding
increase in synodical indebtedness incurred through capital outlay
in this area would result in heavily burdening the annual synodical
budget in the form of debt service.

8. The long-range view is essential as one of the conditions

~~ responsible administration of synodical finance.

. Since this entire problem is of major importance for the
economic welfare of Synod, your Board respectfully requests that
provision be made whereby Committee 1 and the Floor Committee
on Finances have an opportunity for joint meetings and a possible
joint recommendation to Synod. Your Board plans to have sup-
plementary data for presentation at that time.

There is, however, one aspect of the financing of capital outlay
for faculty housing which Synod may wish to act on at this time
in order to afford itself relief in terms of recurring demand on its
annual operating budget.

For most of Synod’s history, costs of new or acquired faculty
residences were met as a one-time charge in synodical current

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