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Chapter seven CONFRONTING THE GREAT DEPRESSION Perhaps the defining character trait of Edgar Odell Lovett was his steadfast optimism, a conviction—not just a hope—that his life-defining goal would be achieved. Given the opportunity entrusted to him in 1908 to take William Marsh Rice’s vague charter and, backed with a substantial endowment, build a university, he had developed a comprehensive vision of an institution that would begin with a carefully limited range of activities but that would—it was confidently expected —over time, and with additional funding, mature into a full, rounded university. When the endowment failed to acquire significant augmentation in the 1920s, Lovett nevertheless constantly held that ambitious vision before the board of trustees and the faculty both to keep the ideal alive and to maintain high academic standings even in the midst of an era of generally lowered expectations. That undaunted optimism served Lovett—and the Rice Institute—particularly well during the dreary years of the Great Depression. Again Lovett had to bend, to tack against the winds of economic adversity, but he never lost sight of his original vision or his certitude that it would be realized. Another sign of his constancy was his loyal devotion to Mary, his wife of more than thirty years. Totally bedridden now, she no longer could take long walks with him or even visit the university, but Lovett’s love and attention to her never faltered. Whether or not he knew Shakespeare’s line from Sonnet CXVI, “Love is not love which alters when it alteration finds,” Lovett embodied the sentiment. In 1965 mathematician Hubert Bray reminisced about an occasion thirty years before when he had driven Lovett in his Model A Ford to College Station to address the local chapter of the American Association of University Professors. On the way back to Houston—it was mid-April—Lovett noted bluebonnets growing along the roadway. He had Bray stop the car, and they both got out and picked an armful of bluebonnets to take home to Mary. As Confronting the Great Depression 195 Bray recalled, “It was a bit illegal, but nobody caught us, and after all, he was thinking of Mrs. Lovett.” It was his optimism and steadfastness in the face of disappointment and loss that made Lovett such an effective and beloved university president. The overwhelming and perennial problem of the 1930s for the university was financial. Several months before the 1929 crash, A. B. Cohn, the longtime assistant secretary to the board of trustees who primarily oversaw investments, warned the trustees that the bond market, especially overseas bonds, was increasingly shaky and was not producing the desired level of returns. But of course that early warning did not foresee what happened to the U.S. economy after the stock market collapse . The university had practically no investments in the stock market , but the falling revenues from the investments in bonds provided little cushion. The largest portion of the investment portfolio was in local secured notes. The falling economy meant that the rate of return on these small loans fell precipitously, many of them soon bringing no more than a 3 percent annual income. Moreover, with the falling economy, local debtors found themselves unable to meet their payment obligations . Rice found itself possessing worthless loans, and foreclosures on property brought little or no financial returns. The result was a sharp drop in income. Total income from investments fell from $733,890 in 1929–1930 to $652,500 in 1932–1933, and of course the board did not know how much further it might fall. In truth the university’s financial situation was nowhere near as fragile as the trustees feared. Even in the 1932–1933 academic year, income exceeded total expenses by $174,976; the university followed the excessively cautious practice of subtracting from available income a substantial sum that was called a depreciation allowance on the fixed assets of the university. This depreciation allowance—really a paper expense—amounted to $94,743 in that year, still leaving a surplus of $80,233 to which should be added another $34,300 garnered from various student fees. Yet the very cautious trustees inter­ preted this as an emergency situation and began to press President Lovett to make draconian cuts in the university budget. This was the first genuine crisis to face Lovett; he had dealt over the past decade with financial restraints that had slowed the university ’s ascent, but cuts such as those proposed threatened...

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