p. 176 | An Important Report

Seventh-day Adventist Publishing Association · Battle Creek, Mich. · Mar 18, 1902

An Important Report

In our last issue we stated that a committee of representative business men of Battle Creek had been appointed to look into the character of the Sanitarium work and management and make a report thereon. After attending to its duties in a very thorough manner, this committee submitted a lengthy report covering all matters referred to them for consideration.

After reciting the purpose for which they had been appointed, and stating quite fully their method of procedure, the committee quotes such paragraphs from the articles of association of the institution as bear upon the questions involved in the investigation, and then continues:—

It is therefore clear:—

1. That no profits of the institution can ever accrue or be lawfully paid to any private party or parties whatsoever.

2. That no funds of the institution can be lawfully sent outside the State to build or support other enterprises of any kind.

3. That any and all revenues of the institution must be devoted to philanthropic and charitable work within the State of Michigan, and to developing and extending the facilities of the institution itself, and for these purposes only.

4. That all the property of the institution is held in trust for the above philanthropic and charitable purposes only.

5. That title to any of the property of the institution can never be passed to any private person or persons whatsoever, but can only be transferred at the expiration of the statutory limit of the corporation to the trustees of another corporation organized for the same purposes and under similar restrictions.

Administration of the Institution

The above being the legal status, the purpose, the obligations and restrictions of the institution, it remains for the public to inquire whether the trustees have legally and faithfully fulfilled their trust. This the public has a right to know, inasmuch as under the law the institution is a quasi public one, deriving its powers and its privileges from the public for public purposes.

To this inquiry your committee has devoted chiefly its time and attention, and we find as follows:—

1. No private individuals or parties whatsoever have, under the present organization of the Sanitarium, derived any profits or revenues therefrom above extremely moderate wages for their services.

2. No funds or profits of the institution have been sent outside the State to promote or support similar enterprises abroad.

3. The indebtedness of the institution, amounting to $245,109.25 is not due in whole or in part to any of the trustees, or to Dr. Kellogg, or to other persons connected with its management, but is owing in part to banks, and the remainder is held in small amounts by one hundred and forty-six different persons not in the management. A complete list of the holders of these notes and obligations has been submitted to your committee.

An Accountant’s Report

An expert accountant was employed to make a special examination of the books and records of the Sanitarium, acting in connection with two members of the committee appointed for this purpose. The accountant reported as follows:—

1. The diversion of funds to branch sanitariums. Your committee first obtained a list of these branch institutions. I then called for the ledger accounts with these branches, and selecting several at random, carefully examined them, together with the other members of your committee, finding nothing whatever but legitimate charges for goods sold to them, which were paid for in cash. I verified these charges by comparison with the bill book showing tissue copies of original invoices. There was absolutely no evidence that I could discover, that any funds had been used for the support of any branch outside of the State.

2. Excessive salaries and fees to Dr. Kellogg and others. We made a careful examination of the pay roll, which includes the whole force of employees receiving pay. This roll shows the rates paid to the help in all departments, including those connected with the management. The rates were found to range from $7.50 to $86.67 a month, and in the case of the physicians on the staff, seventy-eight dollars a month was the highest, and upon that salary the recipient has to support himself. First-year nurses receive their board, room, clothing (such as the usual uniform worn by the nurses), and necessary books for study; second-year nurses receive sixteen dollars a month, with room and board; and third-year nurses, twenty dollars, with room and board. As to Dr. Kellogg, we found that for several years he has received no salary or compensation whatever. We found that the board of trustees agreed that a certain amount should be set aside for Dr. Kellogg’s compensation, but that Dr. Kellogg made it obligatory upon the board of managers that this amount, $96.33 a month, should be devoted to various benevolent purposes. To make sure that there was no other account in which money is paid to Dr. Kellogg, or in which he might be credited with services, I asked to see the personal account with the doctor in the general books, and this account was carefully examined by the members of the committee. The result of this examination was a surprise to me, as I found that Dr. Kellogg was charged with whatever he obtained from the Sanitarium, and for any work done for him at his home by any one in the employ of the Sanitarium, and that he paid for it, the same as any other individual should do. In no instance did I find that he had received credit for a single dollar for services rendered the institution.

3. The indebtedness of the Sanitarium. We found that the schedule showed the names and post-office addresses of one hundred and forty-eight holders of obligations against the Sanitarium. They were scattered from California to Cape Town, South Africa. We could find no evidence whatever of a single dollar of indebtedness held by Dr. Kellogg or any other member of the board of managers.

4. Character and extent of the charitable work. I found, by examination of the books and files of orders for treatment, etc., that thousands of patients have been treated either absolutely free or partially free. I took, at random, the week ending June 30, 1901, and found that the books showed one hundred and thirty patients coming under this heading, and for the week ending Oct. 27, 1901, one hundred and fifty-nine charity or part charity patients. These weeks were selected by myself, and not chosen for me. I found that in the year 1899 there was an expenditure of $29,347; in 1900, $30,300; and in 1901, $44,000, for charitable work in this branch. This makes a total of $103,647 in three years.

5. A general comparison of receipts and disbursements. We observed that the patronage of the institution has been extensive, and the receipts proportionately large; but its expenditures have also been on a large scale, covering such items as new buildings, furniture, medical and surgical equipment, the pay roll of the help, amounting to about eighteen thousand dollars a month, fuel and lights, water, insurance, interest charges, payments on principal of debts, table and food supplies, and many other items of large amounts.

In Conclusion

Finally, your committee are constrained to add that the revelations made by our investigations have been a surprise to us. Not only were we personally unaware of the wholly philanthropic nature of the institution under the law, but we were also unaware of the vast amount of charitable work performed by it, and the wonderful sacrifices made by the managers and employees generally. There are over eight hundred of these employees—physicians, nurses, helpers, etc. Dr. Kellogg donates to the Sanitarium all the services he performs for it, including all surgical and professional fees. He receives no salary or compensation whatever, and has not for years; on the contrary, he contributes annually from his private resources, derived from the sale of his popular medical books, thousands of dollars. The large corps of physicians receive no professional fees, and only weekly wages so small that their services are practically a charity. This is also true of the hundreds of nurses and helpers. They are a band of sincere people, conscientiously devoting themselves to a great work for humanity, and not for personal gain. This we do not need to tell those who have made themselves familiar in the past with the Sanitarium and its work.

It should be remembered, also, that the dispensing of alms to the poor is not the only, nor, indeed, the highest, form of charity. The silent influences, unseen, but powerful and pervasive, of a great benevolent institution like the Sanitarium, are of far greater value. No such colossal work can be carried on in the spirit which actuates and controls the Sanitarium without producing results absolutely incalculable for the good of humanity.

We have, many of us, misjudged the Sanitarium. The members of your committee have themselves heretofore supposed that at least some persons connected with it were deriving large personal gains from it. As already stated, we are surprised at what we have discovered. The more deeply we have gone into the investigation, the more convincing and overwhelming the proofs have become of the straightforward management, the lofty purposes, and the wide-spread beneficence of the institution, and above all of the personal devotion and wonderful self-sacrifice of the nearly one thousand persons employed in it, from Dr. Kellogg, its renowned chief, whose great ability and superior skill are the foundation upon which it rests, and whose labors, enthusiasm, and devotion are the soul and substance of it, down to the youngest helper.

We rejoice that one of the consequences of the fire which consumed the principal buildings of the Sanitarium has been this occasion for investigation and the enlightenment of our people upon matters not only vitally affecting the interests of our city, but of importance to the world.

Rebuilding

At a recent meeting of your committee, Dr. Kellogg was present by invitation, and was asked to make some statement for himself and the Sanitarium Board of Managers with reference to the prospects of rebuilding in this city. In reply, the doctor indicated his good will toward our city, and said that if the citizens of Battle Creek will raise fifty thousand dollars, this sum to include the fifteen thousand dollars tax money paid under protest, and which he expects the Supreme Court will order refunded; and if the city will furnish water for Sanitarium use free, or at a cost not to exceed the cost of pumping; and will provide adequate fire protection for the buildings and property, then the Sanitarium management will proceed to erect in this city a new Sanitarium building to cost not less than two hundred and seventy-five thousand dollars, exclusive of furniture, and far surpassing the structures destroyed by fire, in capacity, adaptation to its uses, convenience, architectural design and beauty, and the general attractiveness of its surroundings; and that this new Sanitarium shall remain the center of their system of sanitariums.

Respectfully submitted, S. O. BUSH, I. L. STONE, GEO. E. HOWES, W. S. POTTER, NELSON ELDRED, Committee.

Action of the Council

At a special meeting of the city council held Wednesday afternoon, March 12, the following resolution was passed:—

Resolved, by the Common Council of the city of Battle Creek, that the report from the Citizens’ Committee, as made at a special session of the Common Council, this committee having as one of its number a member of this council, has been submitted to us, and we are willing and ready as the Common Council here assembled to indorse their report in full.

Believing that the Sanitarium, morally and financially, is a great benefit to this city, this council desires them to remain, and wishes to extend to them every support which we as officers of the city may be able to offer, consistent with our oaths of office.