The financial situation during most of this period, however, was threatening. The great increase in the cost of living which followed the Civil War was making existence difficult for the whole University. The total income was but $60,000, while the average professor's salary was only $1,500. Up to this time the State had contributed nothing to the University for its support, aside from the loan made in 1838, though it was glad enough to bask in the reputation which the great and growing institution brought to the Commonwealth. The University, in fact, had grown beyond its resources, and something had to be done. The Regents accordingly took the University's case to the Legislature, which granted, in 1867, a tax of one-twentieth of a mill on each dollar of the taxable resources of the State, yielding a prospective income of about $16,000 annually--provided, however, that a Professor of Homeopathy be appointed in the Department of Medicine and Surgery.
This actually proved worse than nothing, for it increased tenfold the difficulties of the University and precipitated a long and violent discussion which nearly disrupted the Medical Department. The Regents were not compelled to take the money; so they postponed action and sought to evade the issue by proposing to establish a Department of Homeopathy in some other place than Ann Arbor. But this was held illegal by the Supreme Court and the matter was again postponed. At the end of two years, partly at least as a result of President Haven's masterly statement of the University's plight before the Legislature, a new law was finally passed giving the University not only an annual subsidy of $15,500 for the two ensuing years, but granting also the sum that had accumulated for two years as a result of the first Act. Thus was the University saved once more. The Board was not only enabled to bring the University's facilities into correspondence with its rapid growth; but more to the point, it could now increase the salaries of the Faculty so that full Professors in the Literary Department at last received the $2,000 originally provided in 1837. This relief was of the utmost importance. Still more significant was the fact that a new policy was inaugurated by which the necessity of state support for the University was recognized; support which has never since been withheld, for the tax was successively increased to one-sixth of a mill in 1893, to one-fourth in 1899, and finally in 1907 to the present three-eighths of a mill. At last Michigan, in the fullest sense of the term, became _the_ University of the State of Michigan.