It was a good fortune for the territory that the organic law gave it no power to run in debt. It was equally unfortunate that a corporation created by it could and did run in debt. In the same February of 1851 in which Delegate Sibley secured from Congress the reservation of the two townships of land to endow a university, the Minnesota legislature created the University of Minnesota, to be located at or near St. Anthony’s Falls. The act provided for a board of twelve regents to be elected by the legislature in joint session, in classes for six-year terms. The gentlemen immediately elected, among them Sibley, Ramsey, Rice, North, and Marshall, commanded, as they deserved, the confidence of the people. The board organized on the last day of May, 1851, and resolved to open a preparatory department as soon as possible. One of their number, Franklin Steele, gave a bunch of lots in St. Anthony’s Falls near the site of the well-known Winslow Hotel, later occupied by the Northwestern Industrial Exposition building; others subscribed money; and a few books were thrown in to be the nucleus of the library. In a wooden building 30 by 50 feet, two stories and a basement, the preparatory school was opened on November 26. It continued a useful existence till the close of 1854. By this time the regents, among whom there had been changes of personnel, became desirous to open the “university proper.” In that year they had located through competent experts several thousand acres of the lands reserved by Congress on the best pine in the Stillwater district. The lands they could not sell, but they did despoil them by selling the “stumpage,” and used the money as collected for university purposes. They bought the heart of the present campus, twenty-five acres, more or less, for $6000, paying cash $1000 and giving their notes for the remainder. The stumpage receipts were too small and came in too slowly to warrant large expenditures for development. On February 28, 1856, the legislature authorized the regents to borrow $15,000 on twelve per cent. bonds secured by mortgage on the campus; $5000 to pay the balance due on the campus, $10,000 for a building. In August of the same year the board, much deteriorated by a late election, voted by a majority of one to close a contract for a building to cost $49,000, to be completed within eighteen months. When a year later, almost to a day, the panic struck, the building was nearly complete and large sums were due the contractors. The sales of pine stopped and collections for previous sales ceased. The concern was bankrupt and so remained for nearly a decade. A paragraph of the state constitution, retained against no slight opposition, confirmed the location of the university and devolved all university lands and endowments then existing or to be thereafter granted on the “University of Minnesota.”