In the Ordinance of 1787, providing for the administration of the Northwest Territory, we have only the familiar general declaration that: "Schools and the means of education shall forever be encouraged," but an ordinance adopted ten days later provided that in addition to the school lot in every township: "Not more than two complete townships are to be given perpetually for the purposes of a University, to be laid off by the purchaser or purchasers as near the center as may be, so that the same shall be of good land to be applied to the intended object by the Legislature of the State." This was the fundamental action which made possible the foundation of the University of Michigan almost at the same time that the State was admitted to the Union.
For the most part the story of the land grants under this provision is an unfortunate one of speculation, misappropriations, and sale by venal Legislatures, whose only excuse was probably their inexperience and lack of vision; and the natural desire of the people to benefit at once from the endowment these lands represented. Michigan had her troubles in common with the other new states, but she did manage to acquire enough from these lands eventually to give the University needed support in her very lean early years. Their history, therefore, is not without interest. When Indiana territory was divided by Congress in 1804 into the three districts corresponding to the present states of Indiana, Illinois, and Michigan, one township was reserved in each for a seminary of learning. This, in Michigan, was increased in 1826 to two townships, which might be located by sections in any of the districts surveyed. Even more important was a measure approved by Congress in 1836 which permitted the State to control the selection, administration, and even eventual sale of these sections with no reference to the limits of the Congressional townships, thus permitting their consolidation into one state fund. This precedent has been followed by all the states entering the Union since 1837.
The plan of making a state trust of the public lands was a good one--on paper. But with the rapidly growing population, envious eyes were soon cast on these tracts by immigrants, many of whom settled on these sections as squatters, to make endless trouble in the future with their conflicting claims. The first lands definitely set aside were selected by the Trustees of the old University of Detroit in 1827 within the limits of what is now the city of Toledo. The selection could not have been better, consisting in all of some 960 acres, but most unfortunately the best part was exchanged in 1830, on the representation of land-sharks, for poorer land and the land thus received was sold four years later for $5,000. The remainder was disposed of fifteen years later for about $19 an acre, bringing to the University a total of some $17,000 for land which eventually came to be worth, literally, millions. Meanwhile other tracts were being located in all the counties of the State then organized. Soon after Michigan became a state, the Superintendent of Public Instruction made an inventory of these which showed that at $15 an acre they would bring a fund of $691,200 and an annual income to the University of $48,384. At $20, which he thought might easily represent their value, they would bring an annual income of $64,912. The first sale justified his optimism, as the price averaged $22.85 an acre, though only one-fourth of the purchase money was paid in cash. But the people of the State soon began to murmur; they were not interested in continuing these big reservations of choice land for an object so remote as a university. The Superintendent of Public Instruction, moreover, found himself involved in all kinds of trouble with the purchasers. The matter finally came up to the Legislature under the guise of a bill for the relief of certain settlers on university and other state lands, which would have thrown these sections on the market at a nominal price and insured the squatters permanent tenure. The bill was a short-sighted and vicious one and was promptly vetoed by the young Governor, Stevens T. Mason, because he felt these lands were given to the State as a sacred trust. In this courageous action he performed one of the greatest of his many services to the University.