9.15 m of textual records (23 boxes; 2 volumes)

UA 10

The financial administration of the University of Manitoba was controlled by the Land Board. Created in 1885 as the Land Commission, it administered the selection, patenting and sale of lands granted to the University by the provincial government. Land grants provided financial support to the University through leasing and interest, without direct funding from the provincial government. These land grants provided for the eventual physical expansion of the University.

The Land Committee was changed to the Land Board in 1900 and in 1904 the University Council was granted full control over the Land Board. In 1906 responsibility for Land Board investments was awarded to the firm of Archibald, Machray and Sharpe. After 1917, the Board of Governors gave the University Secretary the right to transfer funds from the capital account to the general revenue account with signatures from the Chairman of the Board of Governors and from the Honorary Bursar.

John A. Machray, a senior partner in the investment firm Archibald, Machray and Sharpe, became Chairman of the Board of Governors in 1917 while maintaining his position as Honorary Bursar. In 1932, various sources within the government auditor's office became concerned that University endowments were being improperly managed. Machray had sole authority over all University investments for almost 30 years without comprehensive audits. The provincial auditor began an examination of Land Board accounts and realized discrepancies existed. Through financial mismanagement and poor investments, Archibald, Machray and Sharpe seriously diminished many endowments. Losses were deep. For example, the Rockefeller Fund for medical research was spent, the Isbister Trust Fund depleted, and St. John's College, one of the founding colleges, lost fifteen endowment funds. Total losses to the University exceeded $1,000,000 dollars.

Immediate consequences of the incident were tuition fee increases, wage cuts, and the establishment of the Royal Commission on the Impairment of the University of Manitoba Endowment Funds to examine the affair. The Commission found that the University Council's unprofessional operation and the lack of presidential authority were primary causes of the scandal. Also targeted was the lack of concern shown by the provincial auditor during the years of mismanagement. As a result, the University Council was dissolved into a Faculty-oriented Senate, and the new University President, Sydney Smith, was granted sweeping authority.

The "Machray scandal" ended in 1936 with the Commission's report and the conviction of Machray, but the effects of the financial catastrophe continued to plague the University for decades.

The collection (1883-1933) consists of correspondence, letter books, and minutes of meetings for the University Council Land Committee, the Land Board, and the Isbister Trust Fund. There are reports, investment records, accounting records, ledgers, bank receipts and cash books. It also includes exhibits and testimony from the Royal Commission on the Impairment of the University of Manitoba Endowment Funds created to examine allegations of mishandled finances, as well as two full volumes of news clippings tracing the daily events of the scandal from the early allegations to the conviction of Machray and the report of the Royal Commission.

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