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6.22.2010

3 A Perfect Philanthropic Storm

1862. 1863. 1865. Opportunities in perfect alignment.

One. Abraham Lincoln signs the Morrill Land Grant Act into law, nine years after it was first proposed by Illinois College professor Jonathan Baldwin Turner. The law deeds federal land in each state to be used by that state for the creation of schools or departments of agriculture and mechanical arts (engineering).

Two. Ezra Cornell wishes to employ his surplus wealth for the greater/est good. On the capitol steps in Albany he meets fellow NY State legislator and soon to be Cornell University’s first president, Andrew Dickson White, who advises him to either give the $300,000 to an institution of higher learning or to start a new one.

Done. Ezra ups the ante to $500,000 and bets the farm (actually donates the scenic family land on the East Hill in Ithaca New York) when NY State agrees to allocate the land grant proceeds to the new institution.

Three. New York State’s quirkiness comes into play. There are no federal lands available in New York. And, as New York is the largest state it gets the most acres (or scrip in lieu of land). Nearly 1,000,000. Think Rhode Island and a half.

Four. The kicker: states are prohibited from owning land in another state. The university doesn’t want to buy, assess, manage, market and sell the land. Ezra is willing to. He agrees to purchase the scrip for about 60 cents an acre (its fair market value). Half down and the balance paid from future proceeds from the sale of the land. All expenses (legal, taxes, accounting, management) also will be deducted from the proceeds.

Five. Ezra gets New York State to agree that any profits from the sale of the land up and above the management expenses and the original value of the scrip will be designated to Cornell Endowment Fund – and not solely for agricultural and engineering – Land Grant Fund. Ag and Engr will benefit from the original value of the scrip, just not the excess value.

Ezra does not, and never will, personally benefit from any of this. His motives are passionately altruistic. The stress of the Wisconsin pines management and his doomed railroad ventures hasten his death in 1874.

Founded in 1848 with an abundance of prime woodland in its northern half, the Badger State now plays a lead role in the university's financial future.

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