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Rh there should have been established in each county of the state at least one County High School to which all common school graduates of the county should be admitted without charge. Separate institutes for white and coloured teachers are conducted annually in each county. These institutes are held for a five or ten day session and attendance is required of every teacher. The state provides for the issuance of three kinds of certificates. A state diploma issued by the State Board of Examiners is good for life. A state certificate issued by the State Board of Examiners is good for eight years with one renewal. County certificates issued by the County Board of Examiners are of three classes, valid for one, two and four years respectively.

According to a school census there was in 1908–1909 a school population of 739,352, of which 587,051 were reported from the rural districts. In the school year 1907–1908 the school population was 734,617, the actual enrolment in public schools was 441,377, the average attendance was 260,843; there were approximately 3392 male and 5257 female white teachers and 1274 negro teachers; and the total revenue for school purposes was $3,805,997, of which sum $2,437,942.56 came from the state treasury.

What was formerly the State Agricultural and Mechanical College at Lexington became the State University by legislative enactment (1908); there is no tuition fee except in the School of Law. The State University has a Department of Education. The state maintains for the whites two State Normal Schools, which were established in 1906—one, for the eastern district, at Richmond, and the other, for the western district, at Bowling Green. Under the law establishing State Normal Schools, each county is entitled to one or more appointments of scholarships, one annually for every 500 white school children listed in the last school census. A Kentucky Normal and Industrial School (1886) for negroes is maintained at Frankfort. Among the private and denominational colleges in Kentucky are Central University (Presbyterian), at Danville; Transylvania University, at Lexington; Georgetown College (Baptist) at Georgetown; Kentucky Wesleyan College (M.E. South), at Winchester; and Berea College (non-sectarian) at Berea.

Finance.—Kentucky, in common with other states in this part of the country, suffered from over-speculation in land and railways during 1830–1850. The funded debt of the state amounted to four and one-half millions of dollars in 1850, when the hew constitution limited the power of the legislature to contract further obligations or to decrease or misapply the sinking funds. From 1850 to 1880 there was a gradual reduction except during the years of the war. The system of classifying the revenue into separate funds has frequently produced annual deficits, which are, as a rule only nominal, since the total receipts exceed the total expenditures. In 1902 the net bonded debt, exclusive of about two millions of dollars held for educational purposes, was $1,171,394, but this debt was paid in full in the years immediately following. The sinking fund commission is composed of the governor, attorney-general, secretary of state, auditor and treasurer. The first banking currency in Kentucky was issued in 1802 by a co-operative insurance company established by Mississippi Valley traders. The Bank of Kentucky, established at Frankfort in 1806, had a monopoly for several years. In 1818–1819 the legislature chartered 46 banks, nearly all of which went into liquidation during the panic of 1819. The Bank of the Commonwealth was chartered in 1820 as a state institution and the charter of the Bank of Kentucky was revoked in 1822. A court decision denying the legal tender quality of the notes issued by the Bank of the Commonwealth gave rise to a bitter controversy which had considerable influence upon the political history of the state. This bank failed in 1829. In 1834 the legislature chartered the Bank of Kentucky, the Bank of Louisville and the Northern Bank of Kentucky. These institutions survived the panic of 1837 and soon came to be recognized as among the most prosperous and the most conservative banks west of the Alleghanies. The state banking laws are stringent and most of the business is still controlled by banks operating under state charters.

History.—The settlement and the development of that part of the United States west of the Alleghany Mountains has probably been the most notable feature of American history since the close of the Seven Years’ War (1763). Kentucky was the first settlement in this movement, the first state west of the Alleghany Mountains admitted into the Union. In 1763 the Kentucky country was claimed by the Cherokees as a part of their hunting grounds, by the Six Nations (Iroquois) as a part of their western conquests, and by Virginia as a part of the territory granted to her by her charter of 1609, although it was actually inhabited only by a few Chickasaws near the Mississippi river and by a small tribe of Shawnees in the north, opposite what is now Portsmouth, Ohio. The early settlers were often attacked by Indian raiders from what is now Tennessee or from the country north of the Ohio, but the work of colonization would have been far more difficult if those Indians had lived in the Kentucky region itself. Dr Thomas Walker (1715–1794), as an agent and surveyor of the Loyal Land Company, made an exploration in 1750 into the present state from the Cumberland Gap, in search of a suitable place for settlement but did not get beyond the mountain region. In the next year Christopher Gist, while on a similar mission for the Ohio Company, explored the country westward from the mouth of the Scioto river. In 1752 John Finley, an Indian trader, descended the Ohio river in a canoe to the site of Louisville. It was Finley’s descriptions that attracted Daniel Boone, and soon after Boone’s first visit, in 1767, travellers through the Kentucky region became numerous. The first permanent English settlement was established at Harrodsburg in 1774 by James Harrod, and in October of the same year the Ohio Indians, having been defeated by Virginia troops in the battle of Point Pleasant (in what is now West Virginia), signed a treaty by which they surrendered their claims south of the Ohio river. In March 1775 Richard Henderson and some North Carolina land speculators met about 1200 Cherokee Indians in council on the Watauga river and concluded a treaty with them for the purchase of all the territory south of the Ohio river and between the Kentucky and Cumberland rivers. The purchase was named Transylvania, and within less than a month after the treaty was signed, Boone, under its auspices, founded a settlement at Boonesborough which became the headquarters of the colony. The title was declared void by the Virginia government in 1778, but Henderson and his associates received 200,000 acres in compensation, and all sales made to actual settlers were confirmed. During the War of Independence the colonists were almost entirely neglected by Virginia and were compelled to defend themselves against the Indians who were often under British leadership. Boonesborough was attacked in April and in July 1777 and in August 1778. Bryant’s (or Bryan’s) Station, near Lexington, was besieged in August 1782 by about 600 Indians under the notorious Simon Girty, who after raising the siege drew the defenders, numbering fewer than 200, into an ambush and in the battle of Blue Licks which ensued the Kentuckians lost about 67 killed and 7 prisoners. Kentucky county, practically coterminous with the present state of Kentucky and embracing all the territory claimed by Virginia south of the Ohio river and west of Big Sandy Creek and the ridge of the Cumberland Mountains, was one of three counties which was formed out of Fincastle county in 1776. Four years later, this in turn was divided into three counties, Jefferson, Lincoln and Fayette, but the name Kentucky was revived in 1782 and was given to the judicial district which was then organized for these three counties. The War of Independence was followed by an extensive immigration from Virginia, Maryland and North Carolina of a population of which fully 95%, excluding negro slaves, were of pure English, Scotch or Scotch-Irish descent. The manners, customs and institutions of Virginia were transplanted beyond the mountains. There was the same political rivalry between the slave-holding farmers of the Blue Grass Region and the “poor whites” of the mountain districts that there was in Virginia between the tide-water planters and the mountaineers. Between these extremes were the small farmers of the “Barrens” in Kentucky and of the Piedmont Region in Virginia. The aristocratic influences in both states have always been on the Southern and Democratic side, but while they were strong enough in Virginia to lead the state into secession they were unable to do so in Kentucky.