In the Fall of 1970, a financial crisis broke which endangered the very safety of the university and its most important research functions.
In a memoranda written to the students, faculty and staff at Homewood, President Lincoln Gordon detailed the "grave financial problems" which the university faced as well as the measures which he was prepared to take in order to economize across the university. His goal was to establish a balanced operating budget, and to only withdraw funds from capital gains for necessary capital improvements. Gordon and the administration hoped to restrain any unnecessary spending across the university, writing "Everyone with authority over the discretionary use of funds must avoid unnecessary expenditure. With respect to any unfilled position or position that is vacated, there should be a reevaluation of the need for the position and whether the work might be performed by combining the efforts of others."
Gordon also pointed out that conditions at Hopkins also persisted across a number of American universities. "As you know from the press reports, our financial difficulties are paralleled in other universities and even in many of the state universities. That fact is of only small comfort as we confront our own problems. Our goal is to assure long-term solvency without sacrifice of our qualities of excellence in teaching and research."
In a memorandum entitled "Actions to be taken to meet the present fiscal situation in the division of Arts and Sciences" Lincoln Gordon laid out the series of economizations which he intended to make, and described the ways in which students, administrators, faculty, and programming would be affected by these alterations.
From then on, student activities would be supported entirely by the student activities fee, included in an increase in tuition taking place in 1971-1972. The next year, these student activities would be funded directly by the student activities fee, and the entire program would be more under the direct control of the undergraduates. Gordon and the administration predicted that the existing level of student programs could be maintained through an increase in the student activities fee to $40 in 1971-1972, though he suggested that it was up to the student body to consider whether they wanted a larger or smaller fee depending on the number of activities on offer. Gordon affirmed that the university would continue to spend funds on student activities, and that he planned to work with the Student Council to discuss appropriate measures for maintaining student programming. At the time, Hopkins' student groups included the Student Council, the Student Association, the Glee Club, the Barnstormers, the News-Letter, as well as unnamed others.
What Gordon does not mention in these memoranda is his role in expanding administrative staffing at Hopkins. Ross Jones, a Hopkins graduate who served for decades as a secretary to the presidents of Johns Hopkins University, shed light on Gordon’s brief and unhappy administration. Jones said that Gordon had been chosen for his academic credentials and noted diplomatic career, though his tenure had begun inauspiciously.
“Gordon was chosen. I remember the night before we were going to announce it, I called the chairman of the search committee, Harrison Winter, Judge Harrison Winter. Time magazine had come out with a story about Lincoln Gordon that very day, and it was not flattering. I remember one line in it said something about, "When he gets up to speak, his staff cringes, because they don't know what he's going to say." I called Harrison and I said, "You really have to know this before we come out with this tomorrow. Be aware of it."
When Gordon left abruptly in 1971 after a vote of no confidence from the senior faculty, Jones describes the financial chaos which Dr. Eisenhower returned to find at the university as interim president.
“We had built this building, this Garland Hall, and so Milton comes back just as Lincoln leaves, and we're about to move into Garland Hall. We had spent X thousands of dollars on new furniture, and the university was in a deficit. Milton had left a two- and-a-half-million dollar dowry for Lincoln Gordon. We went right through that and we owed four and a half million. We were in debt four and a half million dollars, which in those days was a lot.”
Eisenhower, Jones and others would ultimately return the university to financial health, but the difficult situation of Hopkins and many other colleges and universities became well known during this period. A cartoon featured in the Evening Sun shows the awkwardness of the university's position in 1970, as students were urging the university to divest from the government even as the university was desperate for new funds. The two students are depicted as long haired and shabbily dressed promoters of the counter-culture who are looking for money from Johns Hopkins and his empty pockets, even as they hold a poster that cries "Government money is dirty money." It was in the midst of this period of intense financial concern that Hopkins students and administrators had been forced to capitulate to the desires of the federal government.