Proceedings of the Board of Regents (1963-1966)

JANUARY MEETING, 1966 1219
space approximates $4.50 per square foot per year, or approximately $40,500.
Storage and general utility space costs approximately $1.00 per square foot per
year or a total of $4,500. Thus, space for a University bookstore serving one-half
the University population would price out at a total of approximately $45,000
per year.
Two issues arise in this context: 1. Should the University in effect subsidize
one-half its undergraduate population at the rate of $5 per student per year?
2. What is the practical situation insofar as the availability in a desirable central
campus location of approximately 13,000 square feet of floor space?
With regard to the first issue, the University would in effect be subsidizing a
self-selected minority of its student body at the expense of the student body and
the University as a whole. There is no logic to indicate that the students thus
subsidized would be congruent with those for whom the cost of education at the
University is a deterrent to their applying or continuing. With regard to the second
question, there is no doubt that space on and surrounding the Central Campus area
is in desperately short supply, and that academic departments, administrative units,
and other student needs (e.g., housing, activity and recreational space, study space,
etc.) occupy urgent priorities if the needs of the total University community are to
be met. Thus, the space problem alone poses a serious, if not insurmountable,
obstacle to the establishment of a University bookstore.
The student report estimates at one point that a minimum capital investment
of $100,000 would be required to commence operations. At another, the borrowing
of a figure of $200,000 for initial operations, stock, and "remodeling of the Union
pool area" is required. For the sake of argument, let us consider that the students'
proposal would require $150,000 of initial capital investment for its realization.
It should be noted parenthetically here that the initial capital outlay figures per
student served which we have obtained from other university bookstores is nearly
double this figure. Leaving aside for the moment the issue of whether $150,000 or
$300,000 of initial capital outlay is required, let us consider whether such a sum
of money is justified in terms of the over-all goal of the students, namely, the
providing of the highest possible quality of education at the lowest possible cost.
Available University funds are either expended for operations or capital improvements, or are invested, with the income accruing to the general benefit of the
University community in its efforts to provide the best possible education at the
lowest possible cost. The average yield on University investments approximates
4 per cent. The diversion of a sum of money between $150,000 and $300,000 to
the special purpose use contemplated by the advocates of the bookstore, would thus
in effect be diverting income now used for general University purposes to the use
and benefit of a self-selected minority of the student body which, as has already
been pointed out, may or may not represent those students whose economic welfare
should be our major concern.
SECTION 3. PHILOSOPHICAL CONSIDERATIONS
The University must and does support the concept of the best possible education
at the lowest possible cost. It is also cognizant of the fact that the economic status
of its student body is not representative of that existing in the population at large.
It is well aware that it must offer to every qualified student, regardless of his
family's economic position, the opportunity to take advantage of the special educational advantages of The University of Michigan. How does the establishment of a
University bookstore serve to further these goals? The students argue that the
establishment of a University bookstore would have the effect of saving each
student $10 per year on the cost of his education. This contention would be
supported only if every student availed himself equally of the proposed University
bookstore, if the present margin on textbooks were indeed $10 rather than the
actual 2 2 to 4 per cent, and/or if no University subsidy were required to maintain
the solvency of the operation. None of these assumptions is supported by the facts.
What then of the 2 X2 to 4 per cent net profit which remains and accrues to the
benefit of the private bookstore owners? This is in fact the profit on an investment
and the result of the labors of the private bookstore owners and employees. This
rate can be seen as a reasonable one, in view of the quality and diversity of services
provided in the Ann Arbor community. Were there no good private bookstores
existing in the community (such was the case at the time of the establishment of
virtually every University-operated bookstore which we surveyed) and were student
needs thus not generally being met, a case could be made on this basis for originating a University-sponsored operation here. But such is not the case. In effect, the