In 1840 the Executive Committee of the Board of Trustees, being
hard pressed for money to meet a payment on the note for $4,000 in
the Bank of the State of North Carolina, which note, as I said in a
previous paper, had been made to meet other pressing debts,
borrowed $2,000 from the Literary Fund of the State of North
As this Literary fund was to figure in the plans of the Trustees for
more than a decade to come, it may be well for me to give some
explanation of its nature. It had for its purpose the "establishment of
common schools" in the State, and was founded by the Legislature in
the year 1825. Small amounts from various sources were donated to it
by the State, and it became a respectable accumulation of more than
two million dollars on the receipt of the State's share of a surplus
deposit distributed by the Federal Government in 1837, amounting to
$1,433,757. Now for the first time North Carolina seriously undertook
to establish a common school system. Under the wise plan proposed
by the President and Directors of this Fund and approved by the
Legislature in 1839, a system of common schools was put in
operation in 1840.1
When first established this Fund was entrusted to a board consisting
of the Governor, the Chief Justice of the Supreme Court, the Speaker
of the House, the Speaker of the Senate, and the State Treasurer. But
probably because the board as thus constituted was too conservative
in making loans, in 1836 its character was changed and it was made to
consist of the Governor, who was ex offico President, and three
Directors appointed by the Governor for the term of two years. The
management of so large a fund was no little responsibility and
possibly there was a temptation to favoritism in the distribution of
loans, but
1 Charles Lee Smith, History of Education in North Carolina, p. 168 f.
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