Should Britain sell the crown jewels?
Queen Mary’s Crown. Photo: Public Domain. Source: Wikipedia
It’s a fair question. Valued simply as jewelry and works of art, the collection is estimated to be worth around $15 billion. But the fact that they are the crown jewels of the British monarchy – with all their symbolism, history, and intrigue – means that they could easily sell for three times that sum.
And in a country with a trillion dollar government budget and a $70 billion deficit, it’s worth asking why their monarchy needs a dragon’s hoard of gold, platinum, diamonds, emeralds, and old masters paintings primarily acquired during the country’s imperial history. In medieval times, monarchs sometimes had to rent jewels for their coronations. And the UK is the only constitutional monarchy with such an extensive collection of regalia.
But the real value of the crown jewels is typically set as “priceless.” They symbolize the British Monarchy, which in turn embodies the state – with all its history of parliamentary supremacy, ministerial execution, and constitutional authority. How do you value a state? Brits that I’ve spoken to are aghast at the notion of selling these treasures. Every enduring institution possesses certain assets that illuminate its character and history.
That’s what I considered when I heard Dartmouth College is considering selling the Hanover Country Club – an 18-hole golf course set on 123 acres just north of the campus. It’s estimated to be worth around $20 million. It’s no secret that golf courses around the country are struggling, and Dartmouth’s is no exception. Fewer and fewer people take the time to play golf these days. It averaged an operating loss of about $600 thousand past few years, and memberships are declining. It’s hard for an educational institution to justify that kind of expense for a non-productive asset.
Hanover Country Club. Public Domain. Source: Wikipedia
But healthy outdoor activities like golfing and skiing are part of what make Dartmouth a unique institution. There’s a strong argument – going all the way from Plato to modern neurobiology research –supporting the enduring value of combining rigorous academic education with vigorous athletic activity in a natural environment.
The operating loss isn’t a big portion of last year’s $900 million operating budget – 0.065%, to be precise. And the cash a sale would raise is a tiny fraction of the College’s $4.4 billion endowment. Is the operating loss a lot of money? Sure. But so are the annual expenses to guard and maintain the British Crown Jewels. Surely Dartmouth’s administration could find .065% of their budget somewhere to support one of its own crown jewels.
Selling a distinctive asset to support an operating budget seems shortsighted. But so does running an operating deficit when demographic trends are against you. Hopefully, Dartmouth’s administration can find a way to make – and keep – its crown jewels productive. Because like the British Crown Jewels, they’re part of Dartmouth’s identity.
Douglas R. Tengdin, CFA