This section is from the "The Subvention In The State Finances Of Pennsylvania" book, by Frederic B. Garver.
As was the case with the subsidies for charity, the subvention for common schools varied in amount according to the prosperity of the state treasury. Table I shows a marked increase in the amount of the subvention after 1836. The augmentation of the grant could not, of course, have come from the growing revenue of the school fund of 1831, since the revenue from land sales declined after 1835. The large grants to common schools during the years 1838 to 1840 were due to sudden accessions to the state treasury of incidental revenue in extraordinary amounts.
In 1836 the state chartered the Bank of the United States, providing that in addition to the other payments to the state treasury " the further sum of one hundred thousand dollars on the first day of June next, and like sums of one hundred thousand dollars, on each succeeding first Monday of June, for nineteen years thereafter, to [shall] be added to and paid over with the annual appropriation provided by the Commonwealth for school purposes and be distributed according to the several laws of the Commonwealth regulating the distribution of such appropriations. " *77 That the bank bonus, or a part of it, should thus be used for the benefit of the schools was quite in harmony with the policy of other states of providing for free education out of non-tax income.
In the following year (1837), the schools received additional aid from other incidental sources. The legislature decided that the surplus revenue, which the federal government turned over to Pennsylvania, should be deposited with banks at 6 per cent interest, and the proceeds devoted to the schools. *78 The interest on this deposit would have meant an annual accretion of more than $170,000 had it been permitted to remain invested for the benefit of education; but the legislature soon appropriated the principal and thus wiped out that source of school income. But, as it happened, the schools received a liberal share of the surplus in a different way. A most serious difficulty encountered during the first years of the school system had been the lack of schoolhouses. In some localities the districts had been able to utilize buildings previously constructed for the education of pauper children. In other instances they were able to rent or to purchase the buildings that had been used for parochial or private schools. But in a majority of cases the districts were obliged to construct buildings before they could put the schools into operation. Since the terms of the subvention did not require the districts receiving the grant to maintain schools for any specified length of time, it was possible to expend the state money, as well as the proceeds of local taxation, in the construction of buildings. But this meant that while the district was paying for buildings it would be obliged to economize severely in other directions. Hence, for the first few years the school system was a "system of taxation" and not of education. *79
77 Act 18 February, 1836, P.L. pp. 42-43. 78 Act 27 February, 1837, P.L. pp. 24-25. 79 Superintendent of Common Schools, Report (1838), p. 9.
The effect of this situation upon the acceptance of the common schools was anything but favorable, and in 1836 Governor Ritner recommended that $500,000 of the surplus revenue deposited by the federal government be appropriated to the districts for the erection of school-houses. *80 That the burden of building houses was a relatively large item in the expenses of the schools during the first few years is shown by the fact that in the districts outside of Philadelphia, from 1836 to 1842 inclusive, almost one-third as much was paid for building purposes as for instruction, fuel and other maintenance costs. *81
In order to relieve the localities of a part of the cost of construction and to hasten the time when the schools should be fully in operation, the legislature followed the recommendation of the governor and appropriated for the construction of schoolhouses $500,000 of the surplus revenue. In case any district already had a suitable building, it was permitted to utilize its share of the grant, which was distributed in the usual way, for the maintenance of schools. *82
The amount actually paid to all accepting districts83 during the year 1837 was $553,300, *84 the highwater mark of the subvention for more than thirty years. The circumstances surrounding this grant of a round half-million of dollars for the building of schoolhouses support the general principle that a treasury suddenly become prosperous by reason of unusual productiveness of the taxes or by reason of the unexpected appearance of large incidental revenues, supplies a very favorable opportunity for the establishment of new grants or the extension of old ones.
80 Pennsylvania Archives, IV Ser. VI, p. 295.
81 See table, page 65 infra.
82 Act 3 April, 1837, P.L. p. 405. How large a proportion of the money thus appropriated was actually used in building is not indicated by the table on page 65, and the inadequacy of the reports of the time make anything but a conjectural estimate impossible. It is significant, however, to note that in the year when the special grant of $500,000 was made, the average length of the school term, as given by the reports of the state superintendent, increased from four months and three days to six months, (Report (1844), p. 8) and at no time afterwards did so short an average term as five months prevail.
83 The wide variations between the amounts appropriated and the amounts actually paid over, as reported by the Auditor General, are principally due to the presence of the non-accepting districts, whose share remained in the state treasury.
84 This included, in addition to the proportion of the $500,000 for building purposes paid to accepting districts, the annual subvention for the maintenance of the schools.