With the end of summer, students return to college campuses where the winds of small scandal buffet them, while over everything wafts, like the smell of decaying autumn leaves, rumor of the Bush administration's plans to set progress benchmarks on American university students, hoping to use standardized tests to ensure universities spend more "time on task." Politicians unwilling to pay for education are nevertheless campaigning to prescribe its course. "It's only just begun," prophesies Secretary of Education Margaret Spellings, on behalf of an administration with a gift for turning misfortune into calamity. The whole package amounts to a dismal present for the American research university, which made its Congressional debut a hundred and fifty years ago this fall, and still has about the same mission, the same critics, and the same problems it did then.

Late in 1857, Representative Justin Morrill (R-VT) brought a bill to the House, allocating public lands to each state for the establishment of a college to teach, among other things, agricultural and mechanical arts. Morrill wanted to give ordinary American access to higher education, arguing that in a global marketplace, Americans needed to maximize their productivity. "We owe it to ourselves not to become a weak competitor in the most important field where we are to meet the world as rivals."

The solution, Morrill argued, was greater investment in human capital. Citing Adam Smith, Morrill noted "that national wealth is greatly increased or diminished by the more or less skill, dexterity, and judgment, with which labor is generally supplied. As legislators, we can have no subject before us of higher intrinsic importance." Congressional Republicans supported Morrill's bill, but Democrats generally opposed it, fearing an alien intrusion into the "domestic affairs of the States." Their most important domestic affair was of course the maintenance of slavery, which they feared would wilt under the application of increased education, rather as Karl Rove remarked about modern Republicanism. Throwing up slippery-slope protests--"[i]f the policy is embarked in, what shall be its limits?"--they tried to block the bill.

Nevertheless, Morrill's bill passed Congress chiefly on Republican support, with a few Democrats defecting from their party line. But states' rights won: President James Buchanan vetoed the bill, demanding that Congress quit prescribing improvement. Not until Abraham Lincoln's election and rebel secession did the Morrill colleges get back on track, and with the bill re-proposed and re-passed, the president signed it into law in 1862.

In the early years, the Morrill schools suffered from lack of funding. The original land-grant plan gave states 30,000 acres of public for each member of their delegation to Congress, with the expectation that state governments could sell it off to settlers, whose work would increase the value of the land and also the tax to state treasuries. Congress thus spared the American people any direct taxation on the principle that, to borrow a phrase, the countryside could finance its own reconstruction--that the riches of the land only needed unlocking for the wealth to flow.

The scheme failed to fulfill this grand vision: The land-grant plan gave richer endowments to populous states, which often had already adequate educational systems. The states that most needed aid--particularly the southern states, where education had long languished as a result of slavery--got less money and often invested what they had unwisely in their own bonds, which somehow failed to pay.

Yet, as one student of the colleges observed, "institution building came off better than nation building." There the colleges stood, poor but open, often providing a standard of education to communities that lacked it. The land-grant schools offered high-school educations where necessary, and as they improved, so did state secondary schools.

Morrill served in Congress long enough to repair his error. In 1890 he saw through a new bill appropriating equal sums from the federal Treasury to each of the states for the schools his earlier act had created. And in a provision that further confirmed his critics in their opinion that he wanted to impose an outside ideology, the law required a "just and equitable" split of federal funds if states insisted on maintaining separate schools for white and black pupils.

At the passage of this second law, Americans took up higher education in earnest. After remaining stagnant for years, the rate of enrollment in colleges and universities increased by over forty percent through the 1890s. As the frontier closed, Americans had to devote themselves to more intensive forms of production. And Morrill's colleges helped: No sooner had Edison opened an electrical substation, than the Morrill colleges offered electrical engineering courses. In the South they studied tobacco, in Ohio they studied rubber, and across all the prairies they studied the soil. The graduates of land-grant schools also went into business and the professions, and helped create the American corporation.

Mysterious as the engines of economic growth remain, there's a good case that improvement of human capital, as Adam Smith and Justin Morrill believed, pays. The practical bent of the land-grant law inflected the rest of American higher education, which moved away from its classical origins. Through the twentieth century, the U.S. provided more years of college than other rich nations, and reaped the rewards of increased labor productivity and income. As much as other countries resisted a variety of American institutions, they copied and coveted the U.S. research universities, which some envy even still.

For all this success, universities have the same problem now as in the nineteenth century--and though today, as they did then, critics leap to say schools suffer because they're bastions of alien ideology, the real problem once again is funding. Increasingly, the state universities aren't: the University of Colorado gets only 9 percent of its budget from Denver, Penn State gets 13 percent from Harrisburg, the University of California under 20 percent from Sacramento. Sometimes corporations make up the shortfall (creating some risks to educational quality) but increasingly students do, in rising fees. Both trends threaten the American university's job of increasing opportunity. Students shouldering debt for college don't need another source of benchmarks: they need another source of Benjamins.

By Eric Rauchway