For all their successes, American universities "have the same problem now as in the 19th century," writes Eric Rauchway, a professor of history at the University of California at Davis. The problem, he says in a brief history of state universities, is insufficient financial support from federal and state governments.

Congress opened debate on research universities in 1857, says Mr. Rauchway, with the introduction of legislation that later became the Morrill Land-Grant Act. The act, which was not signed into law until 1862, allocated public lands to each state for the establishment of a college to teach agricultural and mechanical arts.

Almost immediately, he writes, the colleges established under the Morrill Act suffered from a dearth of public dollars. "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," says Mr. Rauchway....