In accordance with Article VIII, Section 3, of the Constitution and By-laws the annual meeting of the Naval Institute was held at the Officers’ Club, U. S. Naval Academy, at 8:30 p.m., February 18, 1926.
Brigadier General George Richards, U. S. M. C., senior director, presided.
The reading of the minutes of the last annual meeting was dispensed with, having already been published in the Proceedings.
The Secretary submitted the following report, including the audited financial statement for the calendar year 1925:
The Presiding Officer and Members of the Institute:
This is the first annual meeting held in accordance with the new Constitution and By-Laws, the date having been changed from the second Friday in October to the third Thursday in February. This change was made, you will recall, in order to permit the annual financial statement, as of December 31, to be submitted at the annual meeting, which was impossible in the past when the meeting took place in October.
Constitution and By-laws
The changes in the Constitution and By-laws adopted in October 1924, have now been in effect for sixteen months. It is believed the results have justified the changes, and the Secretary-Treasurer has no suggestions or recommendations to make in regard to any further changes in the Constitution and By-Laws.
Membership
The present membership, as of February 18, 1926, consists of 2,564 Regular Members, 1066 Associate Members, 139 Life Members, and 4 Honorary Members, making a total of 3,773.
Subscriptions are as follows: Domestic, 164; foreign, 414, a total of 578.
In addition to the above, the Institute exchanges publications as follows: Domestic, 25; foreign, 14; and 128 copies to advertisers.
The total circulation is thus at the present time 4,518.
The net changes from October 10, 1924, to February 15, 1926, a period of sixteen months, are as follows:
Deaths 49
Resignations 382
Members dropped 393
Total 824
New members 222
Net decrease in membership 602
The net loss in members during the year 1922 was 653; in the year 1923, 244; and in the year 1924, 233.
The Institute, as has been noted in previous reports of Secretary-Treasurers, has been suffering a loss in membership since the cessation of the activities of the World War. Due to the drastic action of the Board of Control two years ago and the changes in the Constitution and By-Laws, which resulted in the suspension and dropping of members owing back dues, together with other measures adopted, it is believed the membership today is down to a bedrock stabilized level, from which level the membership should again rise. Attention is invited further to the fact that the Dues Receivable as of 31 December, 1925, were only $823.36, for which a reserve of $1,500 has been set up. As against this, the Dues Receivable in arrears on October 10, 1924, amounted to $3,320.51. Not for many years has the financial history of the Naval Institute disclosed dues in arrears to be so low.
Last year’s annual report of the Secretary-Treasurer showed that in the fifty-year period of the Institute there had been a loss of over $14,000 resulting from non-payment of dues. Under the present By-Laws such losses cannot occur.
Efforts are still being made to increase the membership. At the present time, the Board of Control is offering to members of the Navy League the privilege of becoming Associate Members of the Institute, if the privilege is taken advantage of within thirty days after receipt of the offer.
An analysis of the membership of the commissioned officers of the regular services discloses that of the line of the Navy, approximately 6 out of every 10 flag officers retain their membership when they retire; that 8 out of every 10 flag officers on the active list are members; and the figures for the other grades down to and including lieutenant of the active list of the line are as follows: Captains, 7 out of 10; Commanders 6 out of 10; Lieutenant Commanders, 5 out of 10; Lieutenants, 5 out of 10. A further study of the situation shows that the field for increasing the Institute’s membership lies in the grades of lieutenant j. g., and ensign, together with obtaining additional members from the staff corps of the Navy, Marine Corps, and from civilians, the latter as Associate Members. The Board of Control has also had under consideration the question of the advisability of seeking to obtain new members in addition to those belonging to the Navy League, from a class of citizens represented by, say the National Geographic Society. In this connection, the financial question must be carefully considered as to whether or not the Institute could afford to send the Proceedings to a large associate membership which paid only $3.00 per year dues; and at this time the Secretary-Treasurer is not in a position to definitely recommend such a step, as a further study of the costs involved must be made.
Proceedings
The Proceedings are still printed in Menasha, Wisconsin, and the Board of Control has deemed it wise for business reasons to continue the procedure adopted a few years ago, which materially reduced costs. Since the last annual meeting, the following changes have taken place in the makeup of the Proceedings:
(a) At the top of all left hand pages appear the words “U. S. Naval Institute Proceedings” and the month; at the top of all right hand pages appear the year and the title of the article. This change was suggested by Lieutenant Neil B. Musser, (CC) U.S.N., and adopted by the Board of Control for the reason that these identification marks offer a member a convenient method of filing certain pages of the Proceedings. This caused no additional expense to the Institute.
(b) Beginning with the December, 1925, number a new quality of paper was used, being somewhat whiter in color but of the same grade and cost. It is believed the appearance of the magazine is thereby improved.
(c) Beginning with the January, 1926, number a “plate finish” paper was used for the cover. The paper is the same in quality and price as that previously used, but the finer finish is very advantageous to the Institute in that it will reproduce cuts and illustrations of our advertisers to much better advantage; and there has been a resultant financial gain to the Proceedings in that certain advertisers who had threatened to discontinue their advertising remained with us, and prospective advertisers who had refrained, subsequently gave us advertising.
A reference was made in the last annual report to the new system adopted whereby all advertising for the Proceedings is handled by a professional firm. This innovation, adopted by the Board of Control upon the recommendation of my predecessor, has been of material advantage to the Naval Institute, as will be seen from the following figures:
For the year ended 31 December, 1923, the Proceedings received from advertising the sum of $2,760.93; for the year ended 31 December, 1924, $3,032.65; and for the past year, $7,641.54. It is confidently believed that the current year will see the income from this source materially increased. The increase of revenue from this source during the past year was largely put into the Proceedings, to publish a greater number and variety of articles, and, it is hoped', resulted in commensurate increased value to the members. The increase in the number of pages printed during the year just closed was approximately equivalent to thirteen and one half monthly issues, as compared with the preceding year.
The financial statement will disclose that, not counting overhead, there was a loss on the Proceedings for the past year of $1,582.87, as compared with a loss the previous year of $945.30. The reasons for same are mostly explained by the greater amount of material published. In closing this subject, it may be stated that, while it is desirable that the Proceedings should pay for itself, the policy has been and will be, as in the past, to make the Proceedings as valuable as possible, provided the loss does not become prohibitive. It is believed that the additional loss of some seven hundred dollars incurred in the past year over the preceding year does not fall within the above category. With additional advertising received during the coming year it is believed that the Proceedings will be published without loss and without impairing the magazine in any way.
Institute Publications and Purchased Books
The total sales of Institute publications has amounted to $50,761.44, and of purchased books obtained from outside publishers. $4,656.06. The total business of the Institute for the year, including the Proceedings, has thus been $76,906.41, and the total operating cost, including overhead, has been $75,830.95, making the net profit for the year $1,015.46. The Institute has therefore done approximately $77,000 worth of business, with a net profit of a little over a thousand dollars, the actual percentage of profit on sales being 1.32%. The gross profit, as will be seen when the financial statement is presented, is some $8,000 in excess of this amount, due to interest from bank deposits and bonds. The gross profit for the year was reduced approximately one-half by charging off certain old and inactive books from the inventory which probably never will be sold, as will be explained later.
Change in Assets
The net worth of the Institute, as of December 31, 1925, is $184,507.74, an increase of $4,113.03. During the year the Board of Control authorized the charging off of $14,446.67 from the inventory on obsolete Institute publications, which resulted in reducing the surplus by $5,035.82, this being in reality an additional depreciation.
Overhead
Overhead is a considerable item, and every effort has been made and is being made to reduce it. The overhead for the year ended December 31, 1925, was practically the same as for the preceding year, after allowing for the increase of salaries to the civilian staff of the Institute granted by the Board in December, 1924.
BOOKS PUBLISHED AND TO BE PUBLISHED
New Books
Some Recent Essays and Poems, a reprint of some recent poems and essays taken from various sources with permission of the authors and publishers for use by the third class;
Naval Architecture and Warship Construction, a new book published under the supervision of the Department of Engineering and Aeronautics to take the place of Robinson’s Naval Construction;
Naval Aviation, a new book published under the supervision of the Department of Seamanship and Flight Tactics, for the use of the midshipmen in that department;
The Principles of the Basic Mechanisms, prepared under the supervision of the Department of Engineering and Aeronautics, to replace Elements of Mechanism ;
Ce'o-Navigation, prepared by Commander Dutton for use in the Department of Navigation and to be used in conjunction with Navigation, 1922, as regards the method of reckoning time from midnight to midnight instead of noon to noon;
Radio Manual, prepared under the supervision of the Department of Electrical Engineering and Physics because no suitable book on the subject of radio could be found in the open market;
Engineering Mathematics, prepared under the supervision of the Department of Mathematics and designed to connect up that department with the mathematical work in the other departments at the Academy;
Laboratory Manuals, prepared under the supervision of the Department of Electrical Engineering and Physics in four subjects, as follows: Alternating Current. Direct Current, Physics, and Radio;
Internal Combustion Engines. This book was printed in 1920 by Ginn and Co., of Boston. As they were not in a position to revise it to the satisfaction of the Department of Engineering and Aeronautics, they were asked to sell the publication rights and plates to the Institute. This they agreed to do, and the book was then thoroughly revised and brought out for the first time by the Institute.
Reprints and Revisions Published
Constitutional Law. This book was revised and reprinted at the request of the Military Academy for use there as a textbook in the subject;
Naval Electricians’ Textbook, Volume I. Advantage was taken of the exhaustion of the 1922 edition to incorporate some changes and to make numerous corrections in the text;
International Law. A slightly revised edition was printed, the principal addition being a short article on angary;
Naval Leadership was reprinted with a few minor corrections;
Notes on Naval Communications was reprinted with very slight changes;
Naval Ordnance. A thorough revision under the supervision of the Department of Ordnance and Gunnery was published last summer;
Physiology was reprinted without change:
Manual of Radio Telegraphy and Telephony. This edition is a thorough revision and greatly enlarged edition of the 1919 book. It now contains some 900 pages;
Spanish Reader was revised and brought up to date in the present reprint;
Naval Aviation was reprinted with slight changes.
Books Now in Press
Elementary Mechanics. This book is scheduled for delivery in the next few days and is a complete revision of the 1922 edition;
Engineering Materials and Processes, a new book scheduled for delivery about 15 March. This book was prepared under the supervision of the Department of Engineering and Aeronautics. It will replace Danforth’s Mechanical Processes as a textbook at the Naval Academy.
New Books in Preparation
Navigation, a book being prepared by Commander Dutton which will replace Navigation, 1922 and Celo-Navigation in the Navigation Department.
Shop Practices, is in preparation for use with its companion volume Engineering Materials and Processes, to replace Danforth’s Mechanical Processes.
Books to Be Revised
Engineering Mathematics. This book was gotten out with a new set of page numbers and a new set of figure numbers for each chapter, so that any chapter could be revised in length or omitted entirely without altering the pagination of the remainder of the book, thus effecting a considerable saving in the case of revisions;
Radio Manual. The remarks under Engineering Mathematics are applicable here also;
Reciprocating Engines and Auxiliary Machinery. The revision of this book is now in process under the supervision of the Department of Engineering and Aeronautics;
Groundwork of Practical Naval Gunnery. A thorough revision is now being worked out by the Department of Ordnance and Gunnery;
Range and Ballistic Tables. A slight revision and the addition of one or two new tables for the large guns are to be included by the Department of Ordnance and Gunnery;
Laboratory Manuals. The four manuals under this subject require slight annual revisions to meet the demands of the Department of Electrical Engineering and Physics.
Investment Policy
It will be remembered that the new Constitution and By-Laws made necessary a consultation with a well known investment agency re the investments of the Institute. During the past year, Moody’s Investors Service passed upon each and every bond and gave its unqualified approval to the bonds owned by the Institute, and recommended that all be retained. During the year, upon recommendation of Moody, new bonds to the extent of $25,000 par Value were purchased by the Institute. These bonds net approximately 5 per cent and were rated by Moody as of the very highest grade, viz., AAA. They were as follows:
$5,000 CAROLINA, CLINCHFIELD & OHIO RWY CO., 6s of 1952
10,000 NEW YORK EDISON 5s of 1944
10,000 CONSOLIDATED GAS COMPANY OF BALITOMORE 5s of 1939
General
Referring to the immediate past and future, it is believed the Naval Institute approaches stabilized conditions. It must be recalled that the Institute suffered more or less from the War conditions, as did all business organizations; and a period of recovery has been necessary. The membership list today as previously noted, is believed to have reached normal, so far as loss is concerned, and comparatively few members are in arrears for dues. As regards inventory, this has been reduced to the very minimum, and the value of the inventory of Institute publications is about $21,000. The inventory now consists of active books for which a sale in the next three years is in sight.
There is something to consider for the future as regards sale of the Institute’s books to the Midshipmen’s Store. For several years in the past, the number of appointments of midshipmen to the Academy have been greater than they are now, and the number of midshipmen buying professional textbooks of the Institute through the store has been in excess of 2,000 being as high three or four years ago as 2,500. Today the regiment of midshipmen is in the neighborhood of 1,700; and it is a fair estimate to make that for the next several years the gross receipts from these sales to midshipmen through the store will be approximately three-fifths of what they have been in the past. The Board of Control and the Secretary-Treasurer, and succeeding administrations must bear the above conditions in mind in guiding the financial policy of the Institute. In the book publishing business there is a considerable difference in the retail price per copy of a book which has an edition of 2,000 and one which has an edition of 1,200.
Due to the inauguration of my predecessors and previous Boards of Control of a policy of shopping around among a greater number of printing establishments, the. Institute has been enabled to reduce its costs of printing very materially; and despite the great increase in the price of materials and labor in the past ten years, the Institute has nevertheless been enabled to supply its publications at very little increased' prices. In this connection, attention is invited again to the fact that during the preceding year the total business of the Institute was some $77,000 gross sales, upon which there was a net profit of only $1,015.46.
The Tellers, Captain W. S. Anderson, Commander S. A. Clement, and Lieutenant Commander Frank Singluff, Jr., previously appointed by the Board of Control in accordance with the Constitution, announced the result of the election, as follows:
President: Rear Admiral Hilary P. Jones, U.S.N.
Vice-President: Rear Admiral Louis M. Nulton, U.S.N.
Secretary-Treasurer: Captain H. A. Baldridge, U.S.N.
Directors: Captain W. T. Cluverius, U.S.N.
Commander Byron McCandless, U.S.N.
Brigadier General George Richards, U.S.M.C.
Captain W. G. DuBose, (CC) U.S.N.
Captain G. J. Rowcliff, U.S.N.
Captain P. B. Dungan, U.S.N.
Rear Admiral Hilary P. Jones. U. S. N., the president elect was inducted into office and assumed the chair. Commenting on his election, Admiral Jones said “I desire to say that I am deeply appreciative of this honor. I feel somewhat unworthy of holding such a position, but assure you that I will do my best to live up to the policy of my distinguished predecessors.” The President requested General Richards to open for discussion the subject of the proposed trust fund.
General Richards: “Mr. President: There appeared in the January issue of the Proceedings an article by Captain Dudley W. Knox, entitled "Our Vanishing History and Traditions.” Prior to its publication it was submitted to a number of members of the Institute, and Admiral Strauss suggested that perhaps steps might be taken by the Board of Control of the Naval Institute towards creating a trust fund. The Board has not formally discussed the question or decided on a policy, but I believe the majority of the members of the Board are favorable to the Naval Institute’s taking some initiative towards creating a foundation. Naturally, the Board feels that before taking any steps toward this matter it would like to have expressions of opinion from the members themselves. So that was invited in the January Proceedings. We have not yet received any proposition from the members, but would like to suggest the hope that some members here might offer something which the Secretary could submit to the Board as a sort of tentative plan.”
Admiral Jones stated that Captain Knox had given him a list of documents, etc., which were in private hands and which might be purchased. The list was distributed among the members present at the meeting.
Commander A. M. R. Allen suggested that the matter be put in concrete form and submitted to the members of the Institute for a vote.
Commenting on this, General Richards said “Mr. President, I believe that would be the safest course. Captain Knox is very anxious to secure this while the documents, etc., are for sale and it would take some time to submit it to the entire membership, but I believe it would be the best plan.”
After considerable discussion a proposition was moved, seconded, and carried that a concrete plan for assisting the trust fund be drawn up and presented to the Institute’s membership for approval or disapproval.
The meeting then, at 10:25 p.m., adjourned.