An economics magazine used as a teaching aid by the University of Colorado-Colorado Springs is giving the school a crash course in accounting. This spring, The Margin, a nine-year-old journal owned by the university, folded. Its demise has left UCCS holding title to several thousand back issues, its subscription lists--and nearly $200,000 worth of accumulated bills.

More intriguing is that, even after nearly four years of speculation and two internal investigations, no one seems to know how The Margin went downhill so fast. Until 1990 it broke even, occasionally edging into the black. In a little more than a year, however, its bottom line plunged. By the time the numbers were added up in early 1991, The Margin was $250,000 in debt.

The university insists it has no regrets about taking financial responsibility for the economics mag, which it absorbed into the University of Colorado system eight years ago. Economics professor Timothy Tregarthen, one of The Margin's founders, points out that if the debt is averaged out over the magazine's lifetime, "$20,000 a year for a magazine that was required reading at colleges all around the country" was a worthwhile investment.

"The bottom line is that, yes, there were costs involved with The Margin, and, yes, there is a debt," adds Jay Beeton, director of public relations for UCCS. "On the other hand, it provided many opportunities for our students."

Those opportunities could give UCCS a major headache. Erasing The Margin's red ink is not going to be painless. Ed Paris, UCCS's director of financial services, says the money will have to come out of the university's general fund--taxpayer money, in other words, that could've been spent on academic programs.

The Margin was started by a husband-and-wife team out of their home in 1985. Suzanne Tregarthen had a background in writing; Timothy was--and is--an economics professor at UCCS. The following year UCCS agreed to take the publication partially under its financial wing. Suzanne and other workers became employees of the university, and The Margin's budget was handled as a self-supporting "auxiliary" program.

The affiliation helped both parties. The Margin instantly gained the reputation of the school's name. The university, in turn, was able to use the magazine as a forum in which professors and students could publish their work.

The Tregarthens continued to oversee the journal's operations. But by 1988 a newly adopted child forced them to cut back on their hours. Soon after, the magazine's managing editor decided to leave; in September 1989 a man named John Stone was hired to take her place.

Today, nobody at the university seems to know where Stone is. He is not one of the four John Stones listed in the Colorado Springs directory. And although Suzanne Tregarthen says she thought he had since moved to Penrose, the town between Canon City and Pueblo has no listing for the name.

Stone, recalls Suzanne, was obviously bright and instantly likable. He also was connected. Not only had he gone to University of California-Davis, as had Timothy Tregarthen, but Timothy also knew him from the local church they both attended. (In fact, Timothy Tregarthen wrote Stone a reference for the editor's job--which he then hired him for.)

Stone accepted the $36,000-a-year job at a critical time. UCCS and The Margin recently had signed a deal with Worth Publishing, a New York textbook company. The company agreed to include order forms for The Margin with its textbooks. When professors requested the magazine as a teaching aid to the textbook, Worth paid for the subscriptions. The deal, says Timothy, instantly cranked up the magazine's circulation from 15,000 to more than 50,000.

Stone initiated other changes himself. For instance, Timothy Tregarthen recalls the new editor reporting back to him that The Margin's five-year anniversary edition, which came out in the fall of 1990, was a big hit with advertisers because of its glossy cover and color pages. At Stone's urging, plans were made--and money spent--to maintain the new format.

Despite the big changes, the magazine continued to function smoothly--or so everyone thought. Suzanne, who continued to advise the magazine, says that through the first half of 1990 she had no reason to believe that The Margin was navigating anything other than calm financial waters. As late as June 1990, "we were under the understanding that we were bringing in enough advertising revenue to support it," she says. "We were told that we even had a surplus."

That October, however, Suzanne Tregarthen says, a UCCS accountant told her the magazine was experiencing some financial difficulties. She says she began analyzing The Margin's books. "The first thing we discovered," she says, "was that the number of subscribers Stone said we had didn't match with revenue; we had deposits for only one quarter of the subscribers he claimed."

In addition, the Tregarthens say they quickly discovered that the magazine's purported surplus was on paper only. A big reason was that even though The Margin's books showed it was due thousands of dollars in advertising money, many of the contracts were bogus.

When she began calling companies to collect money due for ad sales, for example, Suzanne says she discovered that many of the advertisers had been promised free ads by Stone. For all practical purposes, that meant the anticipated income simply didn't exist.

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