Dear Colleagues:

Over the years, my annual letter has become a report on the State of the Faculty: a view of the punctuating changes of the past academic year, a look ahead to the opportunities that we may enjoy, and a glimpse of some of the gremlins of uncertainty that we shall face. Seven years ago, we laid out an Academic Plan for the Faculty of Arts and Sciences that stated our broadest objectives: to rebuild the community of teachers and students, and to establish an environment that fosters the energetic exchange of ideas across traditional academic disciplines.

Over the subsequent two years, these lofty goals turned into a more pragmatic Campaign Plan, the main elements of which were: (i) an increase in the number of professors, while the numbers of students in the College and in the Graduate School were held steady; (ii) major renovations of our buildings, so that (first) many departments of the humanities and (then) the two largest social science departments could have more functional and academically supportive homes; (iii) the improvement of our curricular offerings for undergraduates, both in the concentrations and in the Core; (iv) better support for graduate students; (v) investment in new buildings for the physical and life sciences, and in the infrastructure for science teaching and research; (vi) a major renovation of Widener to preserve our collections; and (vii) the recognition that information technology would require a significant infusion of new funds.

We aimed to raise $965 million for the Faculty of Arts and Sciences, and -- with a year of the Campaign still to run -- we have reached ninety percent of that target. This success is gratifying, yet there are two important questions. How well does the distribution of new funds fit with the needs that we identified five years ago? What about needs that we failed then to anticipate? Fortunately, thanks to the wisdom and generous flexibility of our alumni/ae and our friends, the current Campaign is helping us to meet the goals that we defined. Even if fundraising has lagged in a number of areas (such as graduate financial aid, new faculty positions, and the Library), the relief to the unrestricted budget that has come from successes elsewhere is providing the wherewithal for the balanced development of the Faculty.

Concurrent with the cheery progress of the Campaign (even though I am constantly reminded that we still have a challenging way to go), the Harvard Management Company has produced great growth in the endowment. Indeed, the continued rise in the market value of our endowed funds allowed the Corporation to announce in November a dramatic increase, of twenty-eight percent, in the endowment pay-out for FY00 (that is, 1999-2000). This action will provide significant additional revenues to help support priorities that I have discussed with the Faculty, the Corporation, and the Board of Overseers over the past year or two. The new infusion must, I am sure, be used for the broadest benefit: to ensure the highest quality of our students, our faculty, and our programs, for the future. We must be careful (if I may be allowed a metaphor from internal combustion) not simply to run on a richer mixture, but rather to use these new funds to build a better Faculty engine for the longer term. [In pursuing this view, I am asking all units of the Faculty that enjoy income from endowed funds to submit careful plans for the best use of their new dividend.]

Before discussing our goals, however, let me pause and ask a broader question. What are the principles that guide us, as we act to ensure 'the highest quality of our students, our faculty, and our programs?' What is it that brings the most talented and creative people here? It cannot just be money, important though that is. For we cannot possibly match for all our undergraduates the most lavish merit scholarships that are offered by colleges and universities that understandably want to add more intellectual cream to their milk. Nor should we want to adopt the notion of the 'star' salaries and preferential working conditions that some institutions now offer to a select few of their faculty. Such constraints notwithstanding, we shall certainly continue to do our best in these competitive situations. But the real advantage that we have, and must not lose, is each other. The attractiveness of Harvard will continue to be the fact that this is a place where one can do one's best work, surrounded by colleagues, students, and resources of a quality that is unmatched elsewhere. Thus the principle of encouraging and supporting communities of scholars is what has driven the renovations of Barker and Boylston for the humanities; it is what is directing the planning for the Knafel Center; and it is what is shaping, in part, the creation of collaborative initiatives in the sciences. The Barker-Boylston project was not so much about the renovation of crumbling buildings, but about bringing together individuals, departments, and programs with intersecting intellectual and pedagogical interests. The future directions of humanistic scholarship are more likely to be charted by colleagues who have the opportunity for fertile interchange (and, if necessary, fierce argument) with their peers and their students, than by individuals who, like anchorites, work and think alone. If the latter were the ideal, why should we bother to join a community like this one?

Our aim, though, is not merely to create communities of scholars, but to build communities of the most enriching and creative scholars. Whether students or faculty, such people are rare, and we go to unusual lengths to find them. Having done that, we must make certain that they come to an environment that is irresistibly attractive for their (and our) intellectual growth.

What has been accomplished?

During the last academic year, we advanced on several fronts. The Barker Center opened, twelve new faculty positions were authorized for the most stressed and needy departments, and the Core curriculum began to enrich its offerings. More recently, the renovation of Boylston Hall was completed, we began the Maxwell-Dworkin building for Computer Science and Electrical Engineering and the Naito building for Chemistry and Chemical Biology, and the Murr Center (the new facility for tennis and squash) was opened. Each of these changes -- more or less -- was a component of our plans seven years ago. But, at the end of last academic year, many of the Faculty's urgent needs had still not been met. We had been able to do little to improve graduate student support, fundraising for the library was moving slowly and the estimated cost of the Widener renovation had risen worryingly, neighborhood concerns threatened our plan for the Knafel Center, we were in danger of losing competitive attractiveness in faculty compensation, class section sizes had remained unchanged, and the obligations of our scholarship students to earn and to borrow were starting to erode the quality of their Harvard experience. The action of the Corporation on the endowment pay-out therefore came at a critical moment, and, in the first months of the current academic year, we have been able to begin to address most of these concerns.

At the undergraduate level, we did not want the 'self-help' requirements of our existing aid packages to affect the education of undergraduates on scholarship by blunting their academic energies, or to perturb their career choice (because of the accumulated burden of debt on graduation). Moreover, the actions of several colleges and universities that announced improvements in their financial aid arrangements early in 1998 seemed likely over time to affect the quality of our applicant pool. After careful analysis of these issues over the summer, we announced last September an increase in the undergraduate financial aid budget of about $8.6 million per year, to benefit all current and future students. This rise of twenty percent has (unsurprisingly) been received with appreciative acclaim.

Our arrangements for graduate student support have been a rising concern for some time, and they were analyzed last year by a committee chaired by Professor Peter Ellison. The committee's recommendations on how to improve our offers and on the mechanisms for departmental funding were warmly endorsed by the Faculty, and everyone agreed that incremental funds would be necessary to make them properly effective. I am very pleased that it will be possible to provide new funds to the Graduate School, rising over the next two years to an additional $5.7 million per year, for the support of graduate students particularly (though of course not exclusively) in the humanities and the social sciences. The quid pro quo for these funds will be -- as emphasized in the Ellison Committee's report -- that departments will need to create rolling four- (or five-) year curricular plans, so that the teaching opportunities for their graduate students can be predicted, and stability in their curricula can be assured.

What parts of our plan have yet to be completed?

Of all the goals that we set seven years ago, increasing the number of professors was surely the most compelling. Yet, with just a year of the Campaign left to run, we have secured funds for only about half of the forty new positions that we sought. My aim is to press forward with our fundraising efforts in this area, so that I can feed those departments that are bearing the heaviest teaching loads, and let them grow. The criteria for assignment of new positions will necessarily be dominated by that of teaching need, even as the case for maintaining intellectual balance within departments, and the filling of lacunae in particular areas, becomes stronger. The availability of new faculty positions notwithstanding, we are facing the problem that open faculty positions are not being filled, a dilemma that I discuss in the section on Faculty, below.

Widener Library, and the treasure that it contains, is essential to the teaching and research of colleagues in the humanities and the social sciences, to thousands of undergraduates and graduate students, and to scholars from all around the world. Widener has for too long awaited upgrades to its climate control, electrical, and life-safety systems. The odor of Widener's deeper recesses, while providing olfactory nostalgia to generations of readers, is actually the smell of decaying books. But this year, thanks to the vision and generosity of Katherine Loker (whose name the great Reading Room now bears) and to a commitment from the President to share the costs, we have been able to accelerate the planning for what will be a massive renovation of Widener's stacks and the creation of new reading rooms. I expect that this project will not start until the fall of 1999, and possibly not until 2000. But whenever it begins, I must dedicate a portion of our incremental endowment income to cover both the Faculty's portion of the capital cost as well as the obviously increased operating expense.

In the social sciences, we are well into the planning for the Knafel Center. The new plan will provide a single home for the Government Department, and space to bring together several of our international and regional centers with the library, documentary, and data collections that they all need. In response both to neighborhood concerns and to our own programmatic objectives, this project has grown significantly in scope and cost. Yet the opportunity to reshape this area (both the intellectual and the physical) for the long term, makes the new plan very persuasive. When the Knafel Center is complete, we shall be able to embark upon the renovation of Littauer, out of which our Economics colleagues have been bursting for too long, and to bring the teaching and research functions in Economics together at last.

Finally, we must make new investments in scientific research and education. I have been uneasy for some time about the health and vitality of the sciences in the Faculty, and about our long-standing mechanisms for institutional support. Maintaining our position by identifying outstanding researchers, inviting them here, setting them up, and letting them go to work is no longer an obvious recipe for success. Increasingly, scientific research requires facilities (such as housing for mice) and capabilities (such as electron microscopy) that single investigators can neither afford nor manage, and sometimes a breadth of knowledge beyond one professor's expertise. Funding agencies now often make institutional cost- sharing and 'deeper infrastructure' a condition for awarding funds, even to the most creative and established researchers. We have in this Faculty a unique responsibility for undergraduate education, for doctoral training, and for broad areas of basic and applied research, and we must act decisively to secure the highest quality of scientific work. Since early last summer, I have been meeting with a group of our scientific colleagues to plan for investments in areas (often across disciplinary boundaries) that hold particular promise for future discovery and application. The support of fields such as genomics, imaging and meso-scale structures, computation, neuroscience, and evolution, will animate research and teaching across all of the sciences in the Faculty, and will ensure that we can attract the most exciting people to teach the coming generations of undergraduates and graduate students.

New pressures.

We could not, seven years ago, possibly have foreseen everything, and a number of constraints have tightened over the past few years. Some of these are external and derive from federal mandates, from accreditation bodies, or from the competitiveness of peer institutions; others are internal and come from new activities or new programs that we ourselves have initiated. In saying this, I do not mean blithely to discount the benefits of many statutes and regulations: we are better off for the scrutiny of accreditation teams, for tighter control on the disposal of hazardous materials, and (even, perhaps) for the new seismic code for buildings in Cambridge. But one of the consequences for the Faculty is that there are many new and necessary expenditures of time and money, for which there is little visible improvement to show.

Probably the most pressing constraint that will engage us in the coming years is space. We benefit from working in a lively and thriving city, but our neighbors are increasingly skeptical of any development at the 'edges' of the institution. The outcry over our initial plans for the Knafel Center exemplifies this concern, and I am convinced that we must begin to plan with extreme care for the long- term use of our land. We shall need to agree on priorities to guide our thinking as our programs develop and grow. A host of questions can be posed. Should we extend library stack space at all, given the existence of the Harvard Depository? Where should we best house our priceless collections of objects (from glass flowers and rocks, to astrolabes and pottery shards)? Where should the public display of University treasures, as distinct from their more immediate educational use, occur? Do classrooms have priority over everything else? As the number of faculty colleagues increases, how can we each enjoy the proper quality and amount of space? Should we plan to improve and move graduate student housing? All of these issues will need to be answered sooner rather than later, so that we can avoid endless expensive decantation of departments and units of the Faculty as one pressing need follows another. The President is acutely aware of these questions, and has appointed a committee chaired by Associate Provost Dennis Thompson that will, on a University-wide basis, frame the issues for a rational long-term plan. Within the Faculty, we must confront these questions, too.

I now turn to the more specific matters for report.

THE COLLEGE AND UNDERGRADUATE EDUCATION

Admissions. Last year, applications for admission to the College rose for the seventh time in eight years, such that we could admit only twelve percent of those who applied. Applications for Early Action rose nine percent over the previous year, to a record 4,211 applicants, of whom we admitted the largest number in the history of the program. [This record has just (December, 1998) been broken again, with a pool of 4,588 early action applicants for the Class of 2003.] Despite the improvements in financial aid offered by Princeton, Yale, Stanford, Columbia, and elsewhere that were announced early in calendar 1998, our yield (that is, the percentage of admitted applicants that chose to accept Harvard's offer) climbed to nearly eighty percent. This is the highest yield here since the early 1970s, and is, by a wide margin, the highest of the nation's selective colleges.

Approximately forty-six percent of the Class of 2002 will receive scholarship support, and the substantial improvement in undergraduate financial aid that we announced in September will increase the undergraduate financial aid budget to almost $53 million. We decided not to phase the improvements in over four years, but to extend the benefit to everyone in the College, this year. About forty percent of aid recipients have chosen to lower their earnings expectation, and sixty percent have chosen to apply the new benefit to lowering their loan obligation.

Advising. Under the chairmanship of Dean Harry Lewis, the Standing Committee on Advising and Counseling has been re-energized, and has produced a thoughtful analysis of this complex topic. Apparent deficiencies in what we do and in what we are perceived to do, both in the Houses and in departments, have been examined, and the committee's recommendations have been discussed by the Educational Policy Committee (EPC) and by the Committee on Undergraduate Education. Efforts are being made to share information amongst departments, and to examine the advising habits of the largest departments, in which any improvements would affect the largest number of students. From the responses in successive Senior Surveys of recent years, this is an area where there is considerable room for improvement. These matters may be taken to the Faculty Council and thence to the Faculty, in due course.

Core curriculum. Following the review of the Core and the Faculty's votes of May 1997, each of the Core sub-committees has continued energetically to recruit new courses. In 1997-98, Core committees brought twenty new Core courses into the curriculum, fourteen of which will be given by colleagues not currently teaching in the Core. In addition, thirteen other courses have been promised, and will be considered during this year. These results are heartening, though if the sub-committees are to approach the Faculty's stated target (of twelve courses per year in each Core area), our efforts will need to be supported by curricular planning in departments, too. Notably, the new Core subcommittee in Quantitative Reasoning has produced a seductive array of offerings (with seven new courses to be offered in 1999-2000), and the Core Standing Committee has just (December, 1998) authorized the formal launching of this requirement next fall, for the Class of 2003. The new courses range over such topics as demography, uncertainty and risk assessment, algorithms and data structures, symbolic logic, quantitative methods in health care, inference in political science, and number theory.

Section size. Reducing the size of the largest class sections has been a priority of successive deans of Undergraduate Education for some time, and the infusion of funds from the endowment has allowed me to take a welcome first step along this path. The maximum target size of class sections in our largest courses (including those in the Core) is now eighteen instead of twenty, which means that we shall need to find ten percent more teaching fellows and ten percent more section classrooms, for these large courses. This first step has been deliberately modest, both because we are currently changing the nature of graduate student funding (which could have unpredicted effects on teaching fellow availability), and because new classroom scheduling procedures are not yet in place. Once equilibrium has been established, I shall be able to consider the possibility of further reduction.

Citations in foreign language. Emerging from the Faculty's discussion of the Core review was a concern that our undergraduates are not being adequately encouraged to pursue the study of foreign languages beyond their first year in the College. The EPC analyzed the course choices of students in the College and considered what might best be done. More than seventy-five percent of undergraduates study a foreign language at Harvard, including those who take language courses to meet the Foreign Language Requirement and those who continue with language study as an elective. While our one-year language requirement seeks to expose students to a second language, we have not recognized those who develop an expertise higher than that required by our minimum standard. The EPC weighed several approaches, either to mandate or to encourage further study of a foreign language, before proposing the Citation in Foreign Language as an incentive. Last spring, the Faculty voted that citations be awarded to those who take four half-courses of language instruction beyond the first-year level, including at least two at the third-year level. The first citations will be granted in June of this year.

Classrooms. In October 1996, a Classroom Committee chaired by Georgene Herschbach (Associate Dean of Harvard College) began to consider both the short-term and long-term problems of the availability, allocation, and adequacy of the Faculty's instructional space. The Registrar has to schedule half of the official meetings of courses and sections, having access to only a quarter of the classrooms. While I appreciate the desire of individual departments and units to have 'first call' on classrooms and teaching rooms that are nearby, I remain reluctant to devote new resources to building more classrooms until I am convinced that we are making the best use of those that we have. The problems of scheduling are exacerbated by the fact that not all our classrooms are accessible to the mobility-impaired, and many lack the audio-visual and technological features that faculty require. Finally, as if these challenges were not enough, the decision to lower the target section size in large courses by ten percent has only increased the demand for rooms in which the additional sections can meet. So I have welcomed the analysis and recommendations of the Classroom Committee. These include the creation of a new data-base and scheduling program (accessible to all the fifty-two [!] persons who currently schedule our instructional spaces) to allow better collective use of all rooms, and the renovation and improvement of classrooms in Harvard Hall. Holden Chapel will also be refurbished, to provide a new classroom for daytime use and rehearsal space for musical groups in the evenings and on weekends. The committee also suggested that all classrooms be fitted with network connections and audio as well as video equipment, a project that we shall begin with Harvard Hall and Sever. In an observation with possibly less painless consequences, the committee noted that only six percent of our courses are offered at 9 a.m., and that most instruction occurs between 10 a.m. and 1 p.m. If the overlap between the waking (and working) hours of the faculty and of our students grows any smaller, more imaginative measures may be called for.

Athletics. Sporting activity continues to be an important part of the undergraduate experience. Harvard sustains a variety of varsity sports teams (more, indeed, than any other Division I institution), and an uncommonly robust program of junior varsity, club, intramural, and recreational athletic opportunities. These commitments have led to new budgetary pressures, as the Athletics Department faces rising expectations from all sides. Thus the majority decision of the Ivy League presidents (not, incidentally, supported by Harvard) to follow the national trend and allow out-of-season practice and competition and other expansions of intercollegiate athletics, has increased the demands on coaches, trainers, facilities and equipment. We are also experiencing rising demands from faculty, students and staff from across the University for recreational use, and we are expected to provide more classes (from aerobics to yoga) for all members of the Harvard community. We should not be surprised that the department's budget is under stress, and these matters are under study as I write.

GRADUATE SCHOOL

Admissions. In 1998 the number of applications rose slightly over the previous year, and of 1,011 admitted students, fifty-five percent accepted our offer. The yield in the humanities was sixty-six percent, in the social sciences fifty-six percent, and in the natural sciences fifty-one percent. While these numbers are close to those of earlier years, the competition for the very best students is increasing sharply. Many departments have felt the need to add merit-based supplements to the normal stipend in order to make competitive offers. The standard offers at some competing institutions (such as Princeton, Chicago, and Yale) are for five years, and often include a guaranteed dissertation-year fellowship. The introduction of cohort-based funding (v.i.) will, I trust, help to stabilize the size of our graduate programs, and allow departments to make more competitive offers to the best applicants, each year.

Advising. In response to concerns about graduate student advising, Dean Christoph Wolff and Professor Everett Mendelsohn (Master of Dudley House) have begun a series of student-faculty round-table discussions, and panels on ''Succeeding in Graduate School.'' These meetings have brought faculty and students together to exchange views on the nature and form of advising in different disciplines. Additionally, Dean Wolff has convened a faculty committee to examine and to make recommendations for improving dissertation advising across all departments of the Graduate School. The committee's report is being discussed with the Directors of Graduate Study and with department Chairs, before being taken to the Committee on Graduate Education and the Faculty Council, to prepare for legislative action by the Faculty.

Cohort-based funding. In May of last year, the Faculty accepted the recommendations of the Ellison Committee on Graduate Student Support that aimed both to improve the competitiveness of our offers and to provide greater predictability for students and for departments. The committee proposed that funds be allocated to departments by a method that avoids growth incentives and shrinkage penalties, that there be a planned incorporation of teaching into graduate programs, that internal and external resources for student support be efficiently mobilized, and that departments have the flexibility to distribute their funds so as to attract the most desirable applicants. The committee recommended transition to a system of cohort-based funding in which students are guaranteed multiple-year support at the time of admission. Dean Wolff is currently working with department Chairs and Directors of Graduate Studies on the implementation of these new arrangements, which will be introduced over the next two years. The challenge will be to ensure that the plan is flexible enough to allow each of our graduate programs to meet its particular competitive situation and to focus its resources most appropriately. All depart ments now have a target size for the entering cohort that takes into account the size of the faculty and the role of related programs, the average time-to-degree, attrition and completion rates, the placement record, teaching opportunities, and predictable support from outside sources. My hope is that the combination of careful planning by departments and of major new resources (becoming available over the next two years, with the larger increment in the second year) will assure the quality, stability, and excitement of our graduate programs. The best scholars of the next generation must come here.

FACULTY

Demography. We have recognized for several years that the number of professorial colleagues in the Faculty must be increased. This need was put at the top of our priorities in the Campaign, and it has dominated our thinking for much of the recent past. So it is with some concern, and some chagrin, that I have to report that the total number of professors has not increased since 1987. This lack of growth is all the more surprising when one realizes that in the past seven years we have received gifts that have allowed the authorization of nearly two dozen incremental faculty positions. What have we failed to do? The data show that in the decade between 1987-88 and 1997-98, the number of tenured faculty rose from 384 to 421 (and to 432, this year), a gratifying increase of eleven percent. But concomitant with this increase, the number of non-tenured colleagues dropped from 224 to 190 (and to 171, this year), representing a fall of fifteen percent. The consequence of these trends is, of course, that we have become more heavily tenured: the ratio of tenured to non-tenured faculty in 1987-88 was 63:37, and in 1997-98 it was 69:31 (it is now 72:28). This shift is not in itself especially worrying, except in those departments where the ratio has risen to unusually high levels, but the fact that the Faculty has not increased overall is a matter that we must address.

There are several factors that have led to the increase in the number of tenured faculty, not excluding our vigorous recruitment efforts. Amongst other contributions are the endowment of new positions (which, if named for a donor, are most likely to be filled at the tenured level), the continued presence of some more senior colleagues since the abolition of mandatory retirement at the end of 1993, and the recent increase in the proportion of new tenured faculty who come from our own junior ranks. But it is harder to account for the continued drop in the number of junior faculty, and we are working to understand this shift. It has been suggested to me that our recent exhortations about taking especial care in junior searches so as to find the very best candidates and maximize the chances of their later gaining tenure, has generated such 'search- exhaustion' that departments prefer to search for a tenured colleague directly. Another view is that, recognizing the weak job market in some fields, more of our junior faculty are leaving early for apparently more secure (or more explicitly tenure-track) positions elsewhere. Whatever the reasons, two facts are clear. First, we are not maintaining the number of junior colleagues who are, surely, essential to the refreshment, intellectual liveliness, and teaching, of all departments of the Faculty. Second, since more than twenty new faculty positions have been authorized in the past five years or so, there are more unfilled positions now than there were a decade ago. I shall continue energetically to seek funds for new professorships, and steadily to grant incremental positions to those departments in the greatest need, but I shall require the Faculty's help in fulfilling this critical goal. I do not want to find that we are simply increasing the number of open slots! At the senior level, we must not (after the conclusion of a meticulous search and the successful emergence from ad hoc scrutiny) fail in our welcome or waver in the strength of our recruitment. [In fairness, I should point out that in the five years between 1986-87 and 1991-92 the overall success rate for senior recruitment was sixty-three percent, whereas between 1992-93 and 1997-98 it has risen to seventy percent, in part because of the increase in the proportion of internal promotions.] At the junior level, we must foster the careers of our younger colleagues, and encourage the recognition that their chances for tenure here are higher than competitor anecdote would have it.

Our goal remains to draw the most exciting colleagues to Harvard, and to include distinguished women and minority scholars in these recruitments. Some departments manage this very much better than others, and in the coming year I want to understand why. The Academic Deans and the Resources Committee will continue to muse on these matters, but I shall welcome your thoughts, as well as any suggestions for action.

Retirement. In my 1996 letter, I said that I aimed to monitor the developing patterns, here and elsewhere, in the retirement of senior colleagues. While the numbers are still relatively small, we do now have enough data to discern some trends. Of the sixty-six faculty members who have reached age seventy in the five years since the end of mandatory retirement in 1993, forty-three (that is, sixty-five percent) have retired. The comparable numbers for five peer institutions that have shared their experience with us, range between fifty-seven and seventy-two percent. Since many of our colleagues who have not yet retired have indicated their retirement plans, I am not yet especially concerned about 'renewal,' or about the continued vibrancy of the Faculty as a whole. But in the absence of mandatory retirement, we shall remain vulnerable to external factors that can influence retirement decisions, such as a resurgence of inflation, changes in the healthcare landscape, or a significant downturn in the investment markets. One feature that has emerged is a difference in retirement patterns amongst the three divisions. Of the humanists who have reached age seventy since 1993, six percent remain on active service. In the social sciences, thirty-three percent are on the active list. Yet in the natural sciences, fifty-eight percent have not retired. The fact that colleagues in the natural sciences are remaining on the Faculty for longer than those in other disciplines is a concern, and is mirrored by similar patterns in five peer institutions, where the percentages of active scientists range from thirty-one to sixty percent (of those who have reached seventy since 1993). I hope that the recent creation of the title Research Professor, which is available to tenured faculty for up to five years following their formal retirement date, will lead to more turnover in the sciences, where our colleagues can (and do) maintain research programs under the continued sponsorship of granting agencies.

Harvard College Professorships. Last April I had the pleasure of naming the first group of Harvard College Professors. You will remember that John and Frances Loeb generously made possible an honor that recognizes those colleagues who make especially valued contributions to undergraduate education. The appointment is for five years, and provides a semester of paid leave, or commensurate summer salary, or an equivalent research fund in support of the incumbent's work. I am delighted that here, at least, there is a reward in addition to virtue. The deserving group first to be so honored are Lawrence Buell (English), Jorge Domínguez (Government), Peter Ellison (Anthropology), Eric Jacobsen (Chemistry), and Judith Ryan (German and Comparative Literature). I shall be able, every year, to appoint four or five faculty to Harvard College Professorships, for the steady-state total will be twenty-four.

DIVISION OF ENGINEERING AND APPLIED SCIENCES

Last year marked Paul Martin's twenty-second year as Dean of the Division of Engineering and Applied Sciences (DEAS), and this year we welcomed Dean Venkatesh Narayanamurti from the College of Engineering at the University of California at Santa Barbara, as Paul's successor. As Dean, Paul established and nurtured links with a number of the Division's intellectual neighbors in the Faculty, he reorganized the Division's research programs, and he guided the development of outstanding undergraduate concentrations in engineering sciences and computer science. Faculty members of the DEAS have also taken the lead in the inter-Faculty initiative on the Environment, and we now have a popular new undergraduate concentration in Environmental Science and Public Policy. While my annual letter is not normally the place for encomia, let me simply record my gratitude for Paul's wise perceptiveness and generous indefatigability, which he has given to the Faculty, and to three successive Deans, over the years.

The DEAS will face several challenges and opportunities in the coming decade. First, a significant number of incremental faculty positions for the Division were targeted in our Academic Plan, particularly in fields that are growing rapidly, such as computer science, electrical engineering, systems engineering, and materials science. As the Division grows, it will forge new and closer ties to other departments of the Faculty and to many of Harvard's professional schools. The Division's second goal is to improve its connections with industry, and to increase Harvard's presence in those areas of the sciences that have natural links to technology and public policy. The DEAS is the only locus of expertise in technology, engineering, and applied science at Harvard, and since these areas will be increasingly important in the lives of our students - both undergraduate and graduate - we must maximize the benefit to the University of the Division's unique strengths. Dean Narayanamurti and his colleagues will, during this year, be shaping a revised academic plan to prepare for and guide these developments.

DIVISION OF CONTINUING EDUCATION

Over the past year, the Division of Continuing Education (DCE) saw yet another rise in its enrollment figures. Through its many programs, most importantly the Extension School and the Summer School, the DCE served more than nineteen thousand students in 1997-98. This moved it closer to the peak of twenty thousand students that was reached eight years ago. The Division's successful operation under Dean Michael Shinagel continues to benefit the entire Faculty.

The DCE has again expanded its engagement with information technologies and distance learning. Last year saw record enrollments in the Division's computer science offerings, with over five hundred students in the two introductory programming courses alone. One computer science course was offered both in person, and over the Internet. Using their standard Web browsers to receive audio and video streams, distance learners can now view lectures over the Internet on demand. This year, the DCE is offering five innovative computer science courses over the Internet. While we are all aware of the shortcomings of distance learning compared to the educational experience of students at a residential university, these experiments in course offerings to a wider audience -- being performed within our own Faculty -- are both welcome and important.

INFORMATION TECHNOLOGY

Advances in technology continue unchecked, offering ever better tools for the creation, analysis, storage, and transmission of information. As possibilities for improving the quality of teaching, research, and communication proliferate, we are increasing our investment in the Faculty's infrastructure, and in the support of promising projects proposed by creative colleagues. We are also trying to integrate the needs of individual departments across the Faculty, and to collaborate with other Faculties and the Central Administration on issues that can benefit from a University-wide approach. I have asked Paul Martin -- who has unofficially carried this portfolio for many years -- formally to take responsibility for these areas, as Dean for Research and Information Technology.

About a quarter of the courses in the Course Catalogue are now making substantial use of Web sites, and of recently developed tools for posting syllabi and lecture notes. These sites are being used increasingly for the electronic submission of course assignments, and for instructor commentary upon them. As such usage grows, we see a greater demand for the tools to access and manipulate the information, and for better and faster equipment. As instructors are provided with information that they need about their students, security becomes a critical factor. We shall see a wider use of Personal Identification Numbers to identify users who may have access to these data.

I am very pleased that HERS II (the new Harvard Educational Records System used by the Registrar for managing course and enrollment data, student grades and transcripts, and other academic information) will be completed this spring, on time and within budget. This new Web-based system has already proved itself by vastly simplifying the production of the 1998-99 Course Catalogue. As additional modules come on line, HERS II will provide ready and secure access for members of the faculty and advisors to information for curricular and academic planning, for students to see their grades and to plan their courses, and for the Registrar and others to schedule classes and sections and to perform analyses of enrollment and concentration trends much more easily.

All these efforts have emphasized the importance of assigning 'ownership' to different bits of data, and of locating the responsibility for maintaining and updating such data sets. When everyday items such as names, office addresses, phone numbers, and e-mail addresses, have no designated owner, ambiguities arise and tiresome inefficiencies result. Unless every data repository is contacted, no one knows which data set to believe. [Indeed, as information from one repository is transferred to a second, it is not uncommon for data that have been updated in the second, to be overwritten and lost.] I have asked the Dean for Research and Information Technology to orchestrate the important, albeit mundane, effort of organizing such information flow. This task will require the cooperation of the College, the Graduate School, the Registrar, the Houses, the departments, the Library, Human Resources, the Telephone Office, and Student Billing, amongst others.

Over the next six months, the new financial systems of Project ADAPT for purchasing, travel and reimbursement, and general accounting, will be introduced. These systems will allow faster payments to suppliers and more timely reimbursements to colleagues, they will provide better financial information for everyone, and they will make it easier for us to fulfill the multitude of external compliance obligations. Staff training will often require several days, beginning in February and continuing into the early summer. The rewards will, I trust, be worth the patience that will surely be demanded of us all, as bugs are eliminated and as we master the new systems.

Five years ago, we invested in the fiber, the routers, and the hubs, to create a ubiquitous high-speed net. Now we have to replace that equipment with the switches and other devices that will increase the net's capacity, security, and reliability. In the coming year we shall also be working, along with everyone else, to try to eliminate the problems that may emerge when midnight strikes on December 31st, 1999. And on a less cataclysmic but no less serious level, we are addressing, in collaboration with the University Health Services, the problem of Repetitive Stress Injury, which grows as a concern in this (and every other) computerized community.

LIBRARY

As we plan for the major physical changes to Widener that will result from the stack renovation, the University Library's Digital Initiative moves forward. This project is designed to enhance our capacity to create, acquire, deliver, and archive information in digital form. The aim is to provide a greater range of digital resources, and to improve access to our collections (by virtue of the new Hollis, HOLLIS II, which will become available in stages, starting in 2000). To ensure that we do not make these major investments in a piecemeal way, I have asked the Standing Committee on the Library to look at the broader questions, too. My letter to them said, in part: ''As it is no longer possible or prudent to add shelf space in Cambridge, a growing proportion of our collections will necessarily be kept in the Depository. At the same time, digital access to the collections is becoming increasingly sophisticated and increasingly critical as a means for accessing, conveying, and archiving information. What do these two trends imply? That is, what are the major decisions facing the Library now, and what will face us in the future, given the limits of campus space and our growing dependence on technology? . . . I hope that [the] committee will consider the various libraries within FAS, including the Harvard College Library (HCL) and our departmental and research center libraries. The committee may also wish to consider how cooperation between the HCL, the University Library, the libraries of other Faculties, and the libraries beyond Harvard, may work to improve scholarship.''

I look forward to a report for discussion, sometime next fall.

CAPITAL PROJECTS

I have mentioned elsewhere in this letter the completion of Boylston, which is now the home for the Classics, Comparative Literature, Linguistics, Literature, and Romance Languages and Literatures. The building provides departmental offices for faculty and staff, spaces for graduate students, seminar and teaching rooms, a splendid new auditorium, and improved lighting, air quality, and furnishings. I trust that, early in the millennium, a completed Knafel Center (which will include offices, classrooms and meeting spaces, the Data Center, the Center for Basic Research in the Social Sciences, a social science library, and a café) will bring to some of the social sciences the interactive benefits that Barker and Boylston have brought to the humanities.

In the sciences, construction proceeds on Maxwell Dworkin and on Naito, and some thought is being given to the two new structures (for the physical sciences, and for the life sciences) unfulfilled from our academic plan.

Athletics now enjoys occupancy of the Murr Center, which gives us sixteen international-sized squash courts, six indoor tennis courts, a conditioning center for student athletes, and offices for coaches and the Athletics Department. The Beren Tennis Center is being planned, and will provide eighteen outdoor courts, courtside seating for spectators, and a two-story pavilion. Completion is expected in time for the academic year 1999-2000. The site for the new Jordan turf field is currently being prepared by 'pre- loading' it with 140,000 tons of top-soil. The existing earth will slowly sink under the weight of the soil above it, leaving a compacted surface that will be ready for bitumen, upon which the artificial turf will be laid.

Finally, planning for the renovation of University Hall, which we began several years ago but delayed because of the pressure of other projects, will again move forward. University Hall was last renovated in 1896 when the Faculty Room was created, and its antiquated heating and electrical systems are close to collapse. The air-conditioners that now disfigure the windows will be removed, and the building will be made accessible, and safe. University Hall is one of the most architecturally distinguished buildings in the Yard, and I look forward to washing its scruffy face.

FINANCIAL STATUS

Revenue

The major sources of income to the Faculty are: tuition, fees, and room and board charges; distribution from the endowment; gifts for current use; and funding for research. The totals for FY97 and FY98 are listed in Table I, broken out by fund type (unrestricted, restricted, or sponsored).

The tuition increase for FY99 was 3.5%, significantly lower than last year's 4.2%, and lower than the 5% average increase of the nation's four-year private colleges and universities. Our increase was lower than those of nearly all our peer institutions, and continues the monotonic downward trend that we began seven years ago.

The market value of the Faculty's endowment stood at $5.6 billion on June 30th, 1998. The investment return for FY98 was an impressive 20.5%, following returns in the previous two years of 26% and 25.8%. The Corporation's decision to raise the endowment pay-out by 28% for FY00 means that endowment income will constitute a larger fraction of our revenue in the future.

Unrestricted gifts to the Harvard College Fund were more than 9% higher than in the previous year. Grant and contract income rose by 3%, and I trust that our initiatives in the sciences will provide new opportunities for external support in the coming years. Sales and services include revenue from the sale of items bearing Harvard insignia, income from journals, ticket sales for athletic events, and income earned from programs run by our research centers. Income from affiliates includes the transfer of $2.5 million from the operating budget of the Division of Continuing Education. Other income derives from a variety of sources, including interest on fund balances, income from patents, application fees, and rental from the use of the Faculty's facilities.

Expense

Each area of expenditure is listed in Table II, which also contains the comparable data from FY97. Instruction is the largest category of expense, and includes the compensation of faculty (salary, benefits, housing subsidies, and interest on educational loans), the salaries of teaching fellows and teaching assistants (categorized under 'Instructional Support'), and the operating costs of all academic departments (including the salaries and wages of their administrative and support staff). The costs incurred in the recruitment of new members of the faculty are also shown here.

Research expenditures comprise the Clark-Tozier funds, the annual research subvention to all faculty, the start-up costs for new faculty, the budgets of all the research centers and institutes, and the direct costs of externally-sponsored research.

Under academic support fall the unrestricted subvention to the Harvard College Library (this is about half of the Library's operating budget: the rest comes from its restricted endowment), instructional support services such as the Bok Center and media services, and academic computing. This last category covers the service and support of the computing needs of students and faculty. Information technology continues to be one of the fastest-growing elements of the Faculty's budget.

Student services are all those units that provide support for student life and extracurricular activity: the offices of Admission and Financial Aid, of the Registrar, of the Dean of Students and the Dean of Freshmen, the Bureau of Study Counsel, the Department of Athletics, and the programs run in the Houses. Scholarships and fellowships contain all the grants and awards made to undergraduates and graduate students. Institutional support covers the University Assessment, which is set at 6.75% of all salary costs (other than student wages and salaries derived from external grants), and pays for the administrative services of the Central Administration. Also listed here are the activities of my office in financial operations, space and facilities planning, personnel, alumni/ae relations, and development. The Faculty contribution to Project ADAPT is included under administrative computing.

The operations and maintenance category covers all buildings used for teaching, research and administration, and also includes maintenance projects that are funded from the operating budget. The cost of operating and maintaining the Houses and the undergraduate and graduate student dormitories is listed under auxiliary enterprises, in accord with standard practice for university financial statements. Finally, debt service includes the interest and repayments of principal on the costs of major capital projects that have been debt-financed.

Looking ahead, I do not doubt that there will be plenty of hurdles, and plenty of worries to go with them. But let me admit how delighted I am to have been so wrong, a year ago. For in last year's letter to you, I said: ''We shall not be able simultaneously to lower tuition increases, to make the most competitive offers to graduate students, to reduce section size, to improve faculty salaries, and to add to the ranks of the faculty.'' Since I wrote that sentence, we have advanced on those fronts, and more besides. May the future remain as bright.

With my best wishes and thanks,

Yours sincerely,

Jeremy R. Knowles

Table I

Table II

Table II (cont'd)

Table II (cont'd)

Table III